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

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Global Slowdown and the Indian Economy

While there may have been some effect of the current global slowdown on economic activity in India, poor performance of agriculture has perhaps been more responsible for the Indian economic slowdown in recent years. Thus domestic factors such as agricultural growth can be neglected only at our own peril. With the information technology industry set to be a major vehicle for productivity growth, India must be prepared to withstand the increased possibility of output volatility through upswings and recessions. And as it increasingly meshes with the globalised trading and financial system, India's own financial system must be strengthened to withstand asset price shocks with policies geared to take quick remedial measures.

A Life in Political Economy

Glimpses of Indian Economic Policy: An Insider’s View by I G Patel; Oxford University Press, New Delhi, 2002; pp 205, Rs 395.

Economy : Wrong Prescriptions

Wrong Prescriptions A correspondent writes: Even a 4 per cent rate of economic growth need not be scoffed at, though it does mean that the economy has underperformed in terms of the target of 6 per cent. It does speak however of the need not to set growth targets unrealistically high. Then the impression goes round that the economy is underperforming. Cynics may suggest that there is a deliberate attempt to show underperformance with a view to push forward the reform programme to which the government is committed.

Balanced Growth and Foreign Trade

This paper attempts to establish a link between the maximum attainable rate of growth and the foreign trade sector for the Indian economy in the framework of the balanced growth model. Using six input-output tables, the paper finds that the exports and the imports of the economy would have to rise manifold, for the economy to achieve the technologically given maximum rate of growth. The paper also identifies the 'exportable' and the 'importable' sectors for the Indian economy.

Impact of Increase in Oil Prices on Inflation and Output in India

This paper attempts to study the transmission mechanism of an increase in petroleum prices on the prices of other commodities and output in India. The paper also examines the nature and the extent of 'feedback' in such a transmission mechanism and obtains evidence of bidirectional causality between oil and non-oil inflation in India.

Economic Reforms:A Decadal Stocktaking

A recent conference held in Australia to mark 10 years of India's economic reforms saw papers presented on various topics, covering the gamut of trade, investment and economic growth. The meet also helped to highlight the important work being done on the Indian economy in Australia and other neighbouring countries.

An Analysis of India's Exports during the 1990s

This paper has two broad objectives: First, identify a set of factors that appear to be responsible for a significant decline in India's export growth during the post-reform era, and second, an examination of the possible impediments for high export growth in a sustained manner. The decline in Indian exports during 1996-97 was due mainly to a fall in the growth rate of export volumes. This analysis brings out the nature of demand-side factors, as against supply-side bottlenecks, that have constricted the growth of exports. However, easing of supplyside constraints too would have aided the revival of export growth.

Imparting Dynamism to Credit Delivery

When the economy is in dire straits the Reserve Bank cannot sit back and say it has done enough by reducing interest rates and supplying liquidity to the market. It needs to operate on many fronts - interest rate, general refinance, sector-specific refinance, directed credit norms and moral suasion - to introduce dynamism into the banks' credit delivery system.

Slowdown of the Economy:Which Way Out?

In the panic that has gripped Indian business and government policy circles, it is easy to recommend measures which can be best described as quick fixes. But it is important that quick fixes be avoided if long-term development is not to be compromised. The main reasons for the current slowdown are structural and must be addressed as such. This calls for boosting not any kind of government expenditures, but expenditures that will raise productivity. Alongside must be tackled the institutional impediments that continue to obstruct private investment. Ten years after the initiation of economic reforms it is urgently necessary now that we recognise the important role that the institutional environment plays in development.

Reviving the Economy

Since the beginning of the 1990s contractionary features inherent in public policies have resulted in a massive squeeze on investment in physical infrastructure in particular, and a sharp deterioration in the share of development in the government's total expenditure. All hopes have been pinned on the revival of industrial demand through possible improvement in agricultural growth in the current year following copious rainfall so far. However, because this beneficial impact, if it occurs, follows two years of falling incomes in the sector, it is not likely to be either significant or immediate. This note explores the possibilities of deploying the surfeit of liquidity in the financial system in a 'supply-leading' strategy for the development of railways and other physical infrastructures in order to kick start the economy.


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