Indian Economy

The reason for the increase in the current account deficit during first quarter of fiscal year 2022–23 is analysed. One reason for the widening of CAD has to do with India’s growing dependence on fossil fuels. There is also an element of lack of price competitiveness that is hurting exports. India is exporting low-valued technology-intensive goods whereas importing high-valued technology-advanced goods. The Government of India and the Reserve Bank of India are taking adequate measures to control the widening trade deficit. While some of these measures are yielding results in reducing CAD, external factors such as geopolitical tensions and the United States Federal Reserve System’s move of quantitative tightening are making CAD difficult to control.

Price of the Modi Years by Aakar Patel, Chennai: Westland, 2021; pp vii + 488, `699.

Parts of this paper were presented at SSS-AIU, Study Group and EGROW Foundation webinars, O P Jindal Finance Global Finance Conclave and Rajagiri Conference on Economics and Finance. Enthusiastic feedback helped improve it. In particular, the author thanks Charan Singh for the invitation to develop one of her op-eds, Arvind Virmani, Amartya Lahiri and an EPW referee for comments. The author would also like to thank Krishnandu Ghosh and Sandipan Saha for research assistance and Shreeja Joy Velu for secretarial assistance. This paper is an updated and abbreviated version of IGIDR WP-2021–025.
 

Using both rounds of the India Human Development Survey, vulnerability is measured as an ex ante measure of poverty for the Indian households. This article highlights the importance of measuring vulnerability in the overall poverty calculation and found it to be a significant predictor of the future poverty.

India announced a fiscal package worth `1.7 trillion to fight the COVID-19 pandemic, but there were arguments for more spending. Using data from a cross-section of countries, this paper estimates the relationship between fiscal spending and the spread of COVID-19, economic stringency, and macroeconomic factors. It argues that subsidy rationalisation is the way to fund the increased expenditure on health and direct transfers while maintaining fiscal discipline.