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

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India’s Green Revolution and Beyond

The widely accepted “success” of India’s green revolution in making the country self-sufficient in foodgrains has made it the model for all agrarian futures envisioned in the country. This article argues that this vision of the future is based on a selective understanding of India’s agrarian past as backward and needing redemption. There is inadequate evidence to support the claim that India was food-insecure in the 1960s. Moreover, evidence suggests that India’s food and nutritional insecurities today are the aftermath of the green revolution strategy promoted since the 1960s. This article is a small contribution towards comprehensively outlining that past so that we can begin to imagine a new vision for India’s agrarian future.

Social Sector in the 2019 Union Budget

The 2019 Union Budget has touched on all the components of the social sector in bits and pieces. However, the overall framework for the sector is not clear. Though a key initiative of the current government has been the increase in direct benefit transfers for welfare schemes, there is a need for increasing the state capacity, particularly of the poorer states, as the major social sector expenditures, mainly on health and education, are done by the states.

Growth, Employment and Labour through a Budget Lens

Despite the rhetoric in the budget speech of the finance minister, the larger picture emerging from the recent data is a slowdown in growth and a net decline in employment. Not only is this a case of jobless growth, but also one of job-displacing growth. Men have gained and women have lost. The rural economy has suffered the most. In the meantime, there is a process of downgrading the rights of labour. There is very little to cheer about the economy.

Vision for Industrial Growth in Budget 2019–20

The budget articulates a vision for the growth of the manufacturing sector which is built on three pillars: (i) increase in investments, private investments in particular, (ii) enabling of conditions for small firms to grow and move into the next strata, and (iii) enhancement of the rate of growth of exports. However, as it turns out the vision has been clouded by some illusions. The challenge of growth acceleration of the industrial sector is confounded by the fact that factor augmentation is at a slow pace despite an increase.

Putting the Cart before the Horse

The 2019 union budget has neither proposed any bold policy moves, nor any big allocations for investments in the agri-food sector. What it has is massive welfare programmes, predominantly the remnants of its predecessor government’s welfare policies. It appears that India has already become a welfare state before generating enough wealth. Has the budget for the agricultural sector actually put the cart before the horse?

Much Ado About Nothing

The announcements for the financial sector in the 2019–20 budget are either too little or too grandiose relative to the actual requirements of the sector. Given this, the author questions the razzmatazz about the budget as the “auspicious” occasion for which government policy initiatives need to wait to be announced.

Betting on Animal Spirits

Budget 2019–20 is more concerned with getting private finance for investment, especially in infrastructure, rather than with finding ways to finance much needed state action to address slowing growth and welfare shortfalls. However, even that stance does not free it from the neo-liberal fiscal bind it finds itself in.

Road Map for Structural Reforms in Budget 2019

There were great expectations of fast-tracking reforms in the budget. However, it disappoints in setting a road map for creating a virtuous cycle of investment and growth. On the fiscal front, the overambitious revenue projections raise questions of credibility and feasibility of containing the deficits at the budgeted level. The wait for banking and financial sector reforms continues. The selective increases in import duties are retrograde, and increase in the taxes on the super-rich complicates the tax system without much gain in revenues. The centralisation through the levy of surcharges does not match the lip service given to cooperative federalism .

Financial Literacy and Financial Inclusion

Using district-level data, the effect of financial literacy centres on financial inclusion in India is investigated. There is evidence of an improvement in the use of bank accounts over time. Robustness tests suggest that banks with a strong capital position and asset quality are more inclusive through their financial literacy centres, and the traditional bank agents continue playing an important role in this process despite non-traditional channels like mobile telephony. Yet, the findings show that the overall impact of financial literacy on bank account ownership is still limited. The analysis raises useful policy pointers to address those impediments that plague the process.

Monetary Policy Transmission in Financial Markets

In the Indian context, a key question is addressed: What has been the influence of monetary policy on different segments of the financial markets? Constructing a structural vector autoregressive model with the monetary policy rate, the pattern of monetary transmission to financial markets is examined over three distinct periods of regime changes in the Indian monetary policy and liquidity management framework. The empirical evidence indicates that there is sufficient period-specific transmission of monetary policy across the different segments of the financial markets. While the transmission of monetary policy to the money and bond markets is found to be fast and efficient, the impact of the policy rates on the forex and stock markets is limited.

Understanding Systemic Symptoms of Non-banking Financial Companies

The riskiness of banks (public and private) and non-banking financial companies listed on the stock exchange is examined by measuring their extent of interconnectedness at the lowest tail (1%) quantile. Using the macro risk and balance sheet variables under the directional connectedness framework, this study finds the underperforming periods of Indian banks and NBFCs. The findings are consistent with the systemic risk rankings of the Reserve Bank of India for the domestic banks and systemically important NBFCs.

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