ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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External Account

There are dark clouds on the external sector front. The current account defi cit touched its widest ever level in 2011-12, foreign exchange reserves are increasingly providing import cover for a shorter and shorter period and the ratio of volatile capital to reserves is rising.

Dealing with a Deteriorating Statistical Base

India's offi cial statistical collection machinery has been in decline for more than two decades. The National Statistical Commission was supposed to reverse the decline, but the NSC has had to suffer the government's indifference. It is time the users of information, the academic community in particular, wake up to the fall in quality of Indian data. As a fi rst step, academics and public intellectuals should come together to form an India Database Forum which could discuss and highlight what ails the statistical system and then pressure the government to fi x what was once the envy of the world but is now among the weakest.

More Tax Concessions for More Inequality

The concessions in personal income tax that have been provided in the union budget for 2010-11 will only contribute to a further worsening of inequality. India already has one of the lowest marginal tax rates among the large economies.

Need for a New Medium-Term Fiscal Strategy

Policymakers must see that there is an inconsistency between the new emphasis on inclusive growth and the rigid fiscal strategy they want to follow. Fiscal prudence should not be discarded but the conentional focus on a narrow interpretation of fiscal and revenue deficits harms the cause of balanced growth. There is also a need to reorient government expenditure and to mobilise resources by ending and even rolling back the increasing regressivity in direct taxation. We need, in other words, a new fiscal strategy for the medium term.

Status Paper on Database Issues of the Services Sector

The sustained and rapid growth of the services sector in the Indian economy has raised questions about how to accurately estimate the contribution of the sector to GDP. There are problems relating to the methodology employed on the contribution of the private sector, especially the unorganised part of the private sector. This paper outlines these problems, which were considered at the March 2006 seminar.

Revision of National Accounts Statistics

The Central Statistical Organisation's revision of the National Accounts Statistics series, by shifting the base year from 1993-94 to 1999-2000 is a welcome step. What is missing in this so-called comprehensive revision is any reference to the serious decline in the quality and reliability of the statistics that form the building blocks for the NAS, as revealed by the National Statistical Commission. There have been attempts though to improve the existing database sources and all changes, except for two, namely, the introduction of a new category of "valuables" in the estimation of gross capital formation and the alignment of industry-wise estimate of GCF with estimation by asset or institution, are to be welcomed.

A Dangerous Measure

Letters A Dangerous Measure W e, the undersigned membersof the economics profession,are shocked by the government’s eagerness to introducefull capital account convertibility. Thismove would imply that the inflow andoutflow of capital by residents andnon-residents would no longer besubject to any...

Saving and Investment Estimates

The CSO's latest estimates of savings and investment in 2003-04 suggest that India no longer faces a constraint on domestic savings. However, there is a need to be careful before coming to such conclusions. A close examination of the estimates suggests that they project an exaggerated scenario of high domestic savings and investment. The numbers are the result of a faulty system of estimation which was to be discarded long ago. The estimates for 2003-04 thus reopen the many misgivings estimation procedures have raised in the past.

Distributional Issues in Bank Credit

Intensive and enduring programmes at strengthening the institutional credit structure in rural areas and instituting better credit delivery mechanisms are urgently needed. This note addresses issues that impinge on such a project, against the backdrop of a review of the trends in credit distribution by scheduled commercial banks over the past three decades.

Growth of SDP and Structural Changes in State Economies

This study attempts to compare economic performance across states over the period 1980-81 to 2000-01 using state domestic product (SDP), per capita SDP and sectoral composition of SDP as measures of interstate disparities for the period 1980-81 to 2000-01.

Report of National Statistical Commission

The National Statistical Commission's report focuses on continuing with the generation of statistics, even if with greater efficiency, for what may be called administrative requirements and not requirements with broader developmental objectives. This approach runs through the report, whether in dealing with industrial statistics or national accounts or external sector statistics.

Reviving the Economy

Since the beginning of the 1990s contractionary features inherent in public policies have resulted in a massive squeeze on investment in physical infrastructure in particular, and a sharp deterioration in the share of development in the government's total expenditure. All hopes have been pinned on the revival of industrial demand through possible improvement in agricultural growth in the current year following copious rainfall so far. However, because this beneficial impact, if it occurs, follows two years of falling incomes in the sector, it is not likely to be either significant or immediate. This note explores the possibilities of deploying the surfeit of liquidity in the financial system in a 'supply-leading' strategy for the development of railways and other physical infrastructures in order to kick start the economy.

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