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

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Finance and Monetary Policy beyond Neo-liberalism

Against the backdrop of the North Atlantic financial crisis that erupted in 2007–08, this article looks into the changing role of central banks and the monetary and financial sector policies and the challenges of managing the tensions of this impossible trinity, especially from the standpoint of the emerging market economies. Lessons derived from the crises observed in the past three to four decades, whether in the emerging markets or the advanced economies, suggest that financial markets are inherently unstable. Hence, the article concludes that the emerging economies need to practice enhanced and active surveillance of their financial sector in their quest for maintaining of high growth along with financial stability.

Union Budget and the Trade Sector

The Union Budget for 2020–21 emphasised the need to restrict imports. A number of measures were proposed to realise this objective. These include the use of tariffs and non-tariff measures, making Rules of Origin agreed upon in the free trade agreements work efficiently, and effective monitoring of imports and exports. The finance minister spoke of modifying import tariffs for creating a level playing field for micro, small and medium enterprises in several product sectors and using import tariffs to promote the domestic production of electric vehicles and mobile phones.

Financial Sector in the Budget

The 2020 Union Budget has announced several small steps that could give some fillip to the financial sector in the short run, but the lack of a long-term vision for reviving an economy in downswing remains most conspicuous.

Goal Setting for Indian Agriculture

Though the 16-point action plan for agriculture laid down in the 2020 Union Budget continues prioritising subsidies and safety nets over agricultural investments, it does not make any fundamental improvements in the allocations towards these heads.

Fiscal Consolidation Ex Post the ‘Escape Clause’

Launching an “excessive deficit procedure” in India is inevitable for growth revival. This is crucial, especially when there is considerable ambiguity about why the “escape clause” was invoked in the Union Budget 2020: whether to meet the shortfall in tax revenue emanating from the unanticipated fiscal outcomes of structural reforms, or to boost the capital formation in the economy.

A Low Growth, No Employment and No Hope Budget for ‘Aspirational India’

The Union Budget of 2020 is conspicuous by its non-recognition of the ongoing and widely discussed slowdown of the economy, let alone its impact on the different sections of the people. Given the negative growth in employment and consumption in the rural economy, the budget seems like a cruel joke on the plight of the poor, in general, and women, in particular. Instead of measures for boosting the aggregate demand, especially in the rural economy, the government has exhibited a track record of aiding the process of wealth creation for corporate capital and throwing a few crumbs to the middle class. What comes out crudely and sharply is the ideological predilections of the regime in power.

Tax System Changes in the Budget

There were high expectations from the budget on the changes in the tax system to provide stimulus to the beleaguered economy. However, fiscal conservatism has prevailed. The attempt to broaden the base by eliminating tax exemptions and preferences could have been done without complicating the tax structure. On the macro side, there are questions about the unrealism of the revenue estimates. Unduly optimistic estimates result in “tax terrorism,” lead to inefficient budget management and have adverse impacts on state finances.

Fiscal Restraint Trumps Fiscal Stimulus

The 2020 Union Budget has failed to provide any fiscal stimulus based upon the assumption that there is no fiscal space for providing growth stimulus. In doing so, it missed out on the opportunity of leveraging an additional fiscal space of around 10% of the gross domestic product that could have been tapped through revenue and expenditure rationalisation measures.

Household Assets and Wealth Quintiles, India 2006–16

The potential of National Family Health Survey wealth index to contribute to the discourse on poverty and inequality in India is presented. Between 2005–06 and 2015–16, there have been improvements in ownership and access to fairly basic household assets and amenities, yet, much needs to be accomplished in the provisioning of pucca houses, clean cooking fuel, improved toilet facilities as well as access to the digital world through computers and the internet. Inter-household inequalities in asset ownership have declined, but there are large intergroup inequalities with particularly disadvantaged asset ownership profiles for Scheduled Caste, Scheduled Tribe and Muslim households. Interstate inequalities in asset ownership, however, have increased. The increased concentration of asset poor is found in Bihar, whereas Punjab and Haryana experience increased share of richest households. Overall, based on robustness checks, the NFHS wealth index is an important proxy of socio-economic status and offers considerable scope for timely and systematic analysis of economic inequalities.

Intimate Partner Violence

Unless India acts on all important causes, including intimate partner violence, that are hindering improvements in reproductive, maternal, and child health outcomes, the sustainable development goals related to health will remain difficult to achieve. Using the National Family Health Survey 2015–16, it is found that intimate partner violence has adverse impacts on the pregnancy outcomes, maternal and newborns’ health, and related healthcare access.

Stagnancy in the Unmet Need for Family Planning in India

Though addressing the unmet need for contraception was one of the immediate objectives of India’s National Population Policy 2000, the available evidence shows that there has been stagnancy in the level of the unmet need for family planning for quite some time. Data from the fourth round of the National Family Health Survey carried out during 2015–16 show that about 13% of couples of reproductive ages wanted to stop childbearing or delay the next birth but did not get the contraceptive services they desired to have. Trends in the level and nature of the unmet need for contraception, whether for spacing or limiting, are examined here on the basis of the data from the series of NFHS rounds. Further, socio-economic and regional differentials in the unmet need have been assessed. It is seen that while socio-economic differentials in the unmet need exist but are not large, there are notable interstate differences, and some states have a high unmet need. Besides, the unmet need has risen in a few states in the recent years. The paper also provides estimates of implications of the unmet need in terms of unwanted births and fertility.

Frequently Asked Questions on Child Anthropometric Failures in India

The National Family Health Survey is analysed to develop critical insights on child anthropometric failure in India. The analysis finds non-response of economic growth on nutritional well-being and greater burden among the poor as two fundamental concerns. This calls for strengthening developmental finance for socio-economic upliftment as well as enhanced programmatic support for nutritional interventions. The gaps in analytical inputs for programmatic purposes also deserves attention to unravel intricacies that otherwise remain obscured through customary enquiries. On the one hand, this may serve well to improve policy targeting, and on the other, this can help comprehend the nature and reasons of heterogeneities and inequities in nutritional outcomes across subgroups. Strengthening the analytical capacities of programme managers and health functionaries is recommended.

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