Tuesday, 30 September 2014

Implications of Status-Quo in Monetary Policy by RBI

India’s central banker Reserve Bank of India today announced its monetary policy and it has decided to keep all the rates vis-à-vis repo rate, reverse repo rate, Cash Reserve Ratio and Statuary Liquidity Ratio unchanged. This move by the RBI has clear indication that RBI does not see lower inflation in near future but at the same time there is no threat on inflationary front. In last few months inflation in the economy has eased to some extent and analysts were expecting lower rates but Reserve Bank of India has decided to play safe than regret later.

Sunday, 28 September 2014

Is Upgrade by S&P Relevant for India?

This week positive news came from global rating agency S&P. S&P has upgraded India's rating from negative to stable position. This means India is slightly in better position than earlier. This was done perhaps on account of higher GDP growth during last quarter and higher expected GDP growthrate that India is expected to post this fiscal year. S&P has also cited that it has higher faith in current regime in India as government would take decisions on time.

Monday, 7 July 2014

Budget 2014-2015: Free Trade Agreements

Free Trade Agreements
Government of India has entered into free trade agreements with many countries but most of the FTAs are not in favor country and those needs to be reviewed. From the trend line of the below graph for the period of 2008 to 2013, it is clear that country’s balance of trade situation has worsen in these years. This indicates that we have imported more from the other countries and exported less and this gap is widening although free trade agreements have been entered into with aims of plugging this gap. And this increasing gap is not good for the exchange rate for Indian rupee at all.

Sunday, 6 July 2014

Budget 2014-2015: Infrastructure, Taxes and Subsidies and Social Security Programs

Infrastructure
Government needs to improve the overall infrastructures in the country from roads to training lines to ports. Also there are numerous infrastructure projects from sectors like power generation, roads and industrial zones etc that are pending at different stages because of leniency on the part of government. Also government needs to formulate a better policy that incentivizes timely execution of infrastructure projects. For this there should be efficient land acquisition and rehabilitation policy in place.

Saturday, 5 July 2014

Budget 2014-2015: Investment, Manufacturing and Agriculture

Investment by Corporate
According to the latest data available, it is clear that the investment by corporate has been falling since long and this needs to be taken care of, as without and very low of investment by corporate, government would not be able to increase growth. So the government must ensure that there are some stimuli for the corporate to encourage them to reinvest their earnings back into the economy.

Friday, 4 July 2014

Budget 2014-2015: Employment and Skill Building

Employment
At present the unemployment situation in the country is alarming, with 4.7 crore youth (between 25 and 34 years of age) unemployed. Further it is notable that there are more than 350 millions of young people who are ready to enter the job market in next few years. If not managed the so called demographic dividend may turn out to be curse for the economy. And there is only way to decrease unemployment rate and increase opportunities for jobs for young people.

Thursday, 3 July 2014

Budget 2014-2015: Growth

Growth
Growth is another aspect of Indian economy that needs to be taken care of by the Indian government. In the last two five year plans, the average GDP growth rate in Indian economy was around 8%; however, the same is revolving around 4.5% now, which is hardly sufficient in view of the challenges faced by Indian economy. We need to accelerate growth back into the bracket of 8-10% to gain from the demographic profile of India. For this it needs to bring a lot of changes in overall economy.

Wednesday, 2 July 2014

Budget 2014-2015: Inflation

Inflation                                                              
Inflation in Indian economy has been very high for long time and this is challenging for the economy as it is eroding the value of Indian rupee in national as well as international market and making life difficult for wages earners. Also considering the social and political unrest in Iraq and other West Asian nations, the problem of high inflation in Indian economy becomes more acute as oil prices would show upward trend leading to higher food and overall inflation in the economy. Government is required to take fiscal initiatives to contain as only monetarypolicy cannot help government in this regards. From the above graph it is clear that the average inflation during 2012 – 2014 has been around 10% and this is very high for any economy.

Tuesday, 1 July 2014

Budget 2014-2015: Introduction

For any country, budget is an important vision document and for newly elected government perhaps the most important tool in hand to keep its people’s hopes and expectations sustained for longer time. The present day government with the help of a promising but deliverable budget can keep its own as well as its people’s morale high. Our finance minister is expected to present budget on 10th July 2014. So to keep the morale of India at higher level he must take of few issues as inflation, food inflation, growth, fiscal deficit, employment and skill building, investment by corporate, manufacturing, agriculture, infrastructure, taxes, subsidies and social security programs and free trade agreements etc.

Tuesday, 7 February 2012

Can Measurement of Subjective Well-Being Help Us to Assess Whether Life is Getting Better?

The British government has recently taken some steps toward measurement of subjective well-being in the hope that this will provide ‘a general picture of whether life is improving’ and eventually ‘lead to government policy that is more focused not just on the bottom line, but on all those things that make life worthwhile’.
The quoted words are from David Cameron, the British prime minister. I find it interesting that he refers to ‘the bottom line’ as though the bottom line in British politics has always had a pound sign in front of it. Philip Booth, editor of the recent Institute of Economic Affairs (IEA) publication ‘… and the Pursuit of Happiness’ suggests that the prime minister was attacking a ‘straw man’; the British government has always had a multitude of objectives.