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

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Privatisation and the Indian State

With a strong impetus towards privatisation, the current government has been pushing to reduce state ownership across most sectors. The last two years have specifically witnessed the dilution of ownership approach being replaced by a firm resolve to transfer control. This article closely examines the privatisation policy discussed in the previous two economic surveys (2019–20 and 2020–21) that point to the privatisation of all state-owned enterprises operating in non-strategic sectors. Reducing state ownership to the extent of transferring control to private hands for better performing state-owned enterprises is not a well-suited policy decision. It reflects a closer alignment of the government's objective with generating funds for bridging the fiscal deficit/debt gap, by sacrificing future profits for short-term capital gains. In contrast, the Indian CPSE performance revival plan must incorporate a more structured approach that involves segmenting firms into various categories according to past performance, future profitability, industry characteristics, and revival chances. The government should customise the choice of restructuring plan according to these categories and segments.

Green, but Not So Green

The pandemic, the climate crisis, and crisis in agriculture call for sustainable solutions, which are acknowledged by NITI Aayog, but did not find a thrust in the budget. A positive growth in agriculture during the pandemic shows its resilience, but it is intriguing that food inflation remained high and its possible link with the three farm produce laws should not be overlooked. It is worrying that crop loans for input-intensive production are non-serviceable.

Virtuous Cycle and Economic Growth in India

A critique is offered after examining the claims in the Economic Survey that the concept of virtuous cycle is of recent origin and that during the planning period, the planners were unaware of such a way of imagining economic progress. The evidences provided to support the presence of the virtuous cycle in China and the East Asian countries are also questioned.

How to Make Budgets with a Dearth of Data

Given that the reliability of official data has come into question, there is no way to understand the full extent of the issues that various sectors are facing without accurate data.

Economic Revival or Dead Cat Bounce?

Although growing at rates that are globally enviable, the Indian economy has been unstable over the last several years. False dawns, shifting time series, and the selective use of data has provided fodder for scoring political brownie points. Citing near-term data, the Economic Survey 2017–18 argues that the Indian economy is on the path of recovery even as it raises some red flags. What does a comprehensive appraisal of the data show? Is this “recovery” sustainable or is this yet another case of a dead cat bounce?

Lost in Its World

There is a refreshing candour in the Economic Survey 2015-16, but there is also an extreme unrealism.

On Fiscal Deficits and Real Interest Rates

The proposition that the size of the fiscal deficit affects the level of interest rates is theoretically completely erroneous, which in turn makes the budgetary strategy fundamentally flawed.
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