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

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Economic Policy Uncertainty and Growth in India

A measure of economic policy uncertainty or EPU for India is constructed to study its impact on the economy. It is found that gross domestic product growth and fixed investment are negatively related to EPU in India. For instance, if the economic uncertainty were to decrease to the level observed in 2005, India's GDP growth would increase by 0.56%, and fixed investment growth would increase by 1.36%. Additionally, a negative correlation between the Bombay Stock Exchange index and EPU in India is observed, suggesting that increases in EPU lower expectations of future growth or increase perceived risk of listed stocks. Lastly, it is found that firm-level capital expenditure rates are lowered when EPU increases.

The Economy: A Post-Budget Perspective

The focus of this article is not so much the quantitative or specific aspects of the budget as some qualitative issues regarding the economy. It touches on some developing trends and, since the budget is the peg on which it hangs, refers to one or two specific proposals.

India and the Global Economy

The roots of India's prolonged economic stagnation and the glimmer of hope that one notices on the horizon today cannot be fully understood if one ignores the variables that conventional analysis has taught us to ignore - the social norms, culture, beliefs, and the fabric of social interaction.
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