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

GDPSubscribe to GDP

Is the Economy Heading towards Stagflation?

Erratic fiscal and monetary policies tend to slow down growth and fuel inflation.

States’ Debt Burden Surges to a 15-year High

Strengthening the pandemic-devastated state finances will help boost both welfare and growth.

India’s Government Health Expenditure as the Ratio to GDP

The appropriateness of the criterion that pegs the ratio of public health expenditure to the gross domestic product—which is volatile—needs a re-examination. The targets for allocation and expenditure of financial resources for health need to be based on indicators that can be monitored.

Revisiting the GDP Estimation Debate

The National Accounts Statistics series with the base year 2011–12 raised controversy on the integrity of the gross domestic product estimates. The revised growth rates are significantly higher than the earlier figures and are out of line with macroeconomic covariates, especially for the...

COVID-19 Economic Stimulus and State-level Performance of Power Distribution Companies

As part of the COVID-19 economic stimulus package, the Government of India increased the borrowing limit of the states from 3% to 5% of the gross state domestic product. The power sector reform at the state level is one of the criteria to avail this extra borrowing. The efficiency parameters of the power sector are analysed here, and it is observed that there are statewise differentials in the financial and operational parameters. The average aggregate technical and commercial losses that should have been 15% by 2018–19, presently, on average, stand at 26.15%. The average cost of supply–average revenue realised has also widened. The operational parameters indicate widening inefficiencies across states in the power infrastructure.

Is There a Bubble in the Indian Stock Market?

The recent surge in stock prices in India sparked off a debate on a possible bubble in the Indian stock market. The attempt here is to detect and date stamp bubbles present, if any, in the Indian stock market using a recursive econometric technique. This technique can help identify bubbles as they emerge, not just after they have exploded. This study does not indicate any explosive price behaviour in the Indian stock market. Thereby, the presence of any bubbles during the study period is not detected. The sharp decline and the subsequent recovery of the stock prices during the past 15 months was most probably an overreaction to the pandemic.

Export-induced Loss in Employment and Earnings during the First Year of the COVID-19 Pandemic

The COVID-19 pandemic has been an unprecedented exogenous shock in the world economy unlike the global financial crisis in 2008, which was endogenously determined in the structure of capitalist financial market. Given the fact that Indian export sector significantly contributes to the Indian economy in general and employment in particular, it is worth examining how the Indian gross domestic product and exports changed in comparison with the world GDP and world exports respectively, in the first year of the COVID-19 pandemic in 2020–21 vis-à-vis the GFC in 2008. Which industries are affected the most, in terms of export loss, during this COVID-19 crisis? What have been the consequences of these falling export on employment and earnings in the Indian export sector? This study estimates that in the COVID-19 year 2020–21, Indian exports have fallen by `3.74 lakh crore, with a plausible loss of direct employment by 5.06 lakh and an estimated loss of earnings around `12.4 thousand crore across 85 commodities.

Managing Transition to a Low-carbon Electricity Mix in India

Demand for electricity in India is growing due to the increase in GDP and quality of life along with structural changes in the energy sector leading to the increase in the percentage share of electricity in the total final consumption of energy. Decarbonisation of the energy sector is a necessity, and it should be achieved without negatively affecting economic growth of the country. It can be best managed by having a diverse portfolio of technologies as diversity provides supply security, resilience, and hedging against price fluctuations. Therefore, all low-carbon technologies—hydro, nuclear, solar, and wind—should be exploited and provided with a level playing field.

COVID-19 Lockdown and Human Development

Maharashtra has emerged as the epicentre of the COVID-19 pandemic. In the trade-off between lockdowns to flatten the infection curve and saving an already slow economy, there is a significant human cost, thus exposing and deepening the existing structural inequalities. The article maps and analyses the impact of the first wave of the COVID-19 pandemic and the subsequent lockdown based on the three dimensions of human development—health and nutrition, education, and livelihood. Given the acute shortage of food supplies for certain groups during the period, the article examines the government response by analysing the implementation of food programmes.

Using Public Procurement Strategically

The article examines policy decisions and practices in public procurement in India during the pandemic, and finds that bureaucracy could not use public procurement strategically and relied upon archaic and centralised management of procurement to (mis)handle the pandemic. The article also offers some lessons from China’s procurement designs and calls for a major reform in this sector in India.

Lessons from Sri Lanka

Ethnocracy and concentration of power can derail even an affluent nation.

Impact of Leverage on Firms’ Investment

It has been observed that the economic growth cycle coincides with the investment cycle in India. It is found that firm-level leverage could provide early signals about the movements in the investment cycle. Furthermore, a firm’s leverage adversely affects its investment activity after a threshold. Regression results, after controlling for firm’s price to book ratio and operational variables, indicate that the adverse impact of high leverage is predominant on low-growth firms. The initiatives to clean up the balance sheets of banks and deleveraging by non-financial corporates should help in the revival of the investment cycle. The results are consistent with the agency cost of debt and trade-off theory of capital structure, wherein firms set targets for leverage by balancing costs and benefits of debt.

Pages

Back to Top