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Showing posts with the label Economy

Of Free Televisions and Outcomes - How We Miss the Woods for the Trees

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Erstwhile Chief Minister of Tamil Nadu, K. Karunanidhi, launching the free colour TV scheme in 2006 (source: Rediff ) Recently, a storm unleashed itself on Twitter, as a famous YouTuber came on a popular podcast and made a bizarre claim. Free television distribution, it seems, led to improvement in the outcomes of women. And that is good economics. While I don't watch things all the time, what caught my fancy was the defence of the absurdity since. One journal paper was quoted by the YouTuber in question, and was touted as proof of good economics also being associated with freebies. Again, I usually don't comment on freebies, because I think all freebies as a rule are bad. Freebies raise the cost of service across the economy, create greater entry barriers for the poor that they are supposed to serve, and eventually distract from actual welfare spending on such issues as healthcare and education. However, the absurdity on this was so high that I wanted to write for a change. On

Rajasthan’s Power Crisis is Of its State Government’s Own Making - An Analysis

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While India and the whole World face an Energy Crisis that doesn't seem to be diminishing anytime soon, things have gone from bad to worse in Rajasthan's Power Sector with record-high bills and unannounced power cuts throughout the State. The matter has generated considerable political heat in the state, with the Leader of Opposition in the Vidhan Sabha Gulab Chand Katariya cornering the government on the exceedingly high power bills and former Chief Minister Vasundhara Raje slamming the government on the issue of power cuts, blaming it for mismanagement. Politics apart, there are several layers to the problem that need to be unraveled to truly understand the origins of the so-called Desert State's power woes that have led them into this storm. The reasons are manifold, with some being systemic while uncontrollable factors also coming into the picture now. However, as one will see, the state government has left much room for desire on the issue, and carries much of the bur

The Need for an Economic Recovery for India during and post-pandemic

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With the ongoing pandemic a few things are now becoming obvious on the economic front.  The much touted economic recovery plan Aatmanirbhar Bharat has been partly successful; however, with judicial interference now and anticipated in the future, one can see the reform roll out promised under the program failing to materialize before end of 2023. The Loan sanction vs disbursal ratio under the emergency credit loan guarantee scheme clearly did not pan out on desired lines for some crucial reasons I had highlighted earlier. Agricultural reforms remain in the cold storage for now.  Part success of course has been used because PLI schemes of certain sectors have received great response . Particular focus for applause should go on mining, pharmaceuticals and electronics, as well as medical devices which also hold great promise and can be indeed transformative along with textiles. However, in the other sectors it remains an expression of noble intentions like solar PV modules and electric bat

Budget 2021 Has Dared to Mute Populism

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  It has been a very long time since a budget actually cut short on frills and embellishments and took head on some of India’s bigger challenges. Political messaging in India for long has been couched in the poverty driven, gareeb kalyan , redistributive mindset which while seemingly right has made politicians forsake growth as a political strategy. To that end, the Narendra Modi government’s Budget 2021 with Finance Minister Nirmala Sitharaman have displayed a rare step - a break from the voter driven politics of India and actually pushing for growth. For the longest time, India’s political class has been deriving the wrong messages from electoral politics. This misplaced belief that free goodies, subsidies and coverage for all will somehow be able to buy the voter’s support has caused much damage to the economy. What has often been forgotten is that you can only distribute what you earn, and distributing wealth instead of poverty is what the voters would rather prefer. It is rema

Economic Realism of Pandit Deendayal Upadhyaya - Some Thoughts on Agriculture

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While Pandit Deendayal Upadhyaya agreed with some form of mixed economy, one sees practicality in his economic thought and vision. There are two particular instances that seem to clearly indicate what he thought of different kinds of measures. Minimal government intervention in the private space of entrepreneurship beyond a certain regulatory approach was clearly seen as a plus by him, judging by his critique of the five year plans over centralization. As noted by Mahesh Chand Sharma, Panditji saw major problems with the second plan vis-à-vis the first five year plan, especially on the mission statement of creating a socialist society:  Socialism as a confused principle only ends up in the emergence of autocratic governments, and remains fundamentally incompatible with democracy. The second plan, being a plan that aimed to alter a fundamental system in its entirety, would certainly be a problem as it shifted focus from functionality. The obsession with big industry was ‘indecent’ and ‘

The Vedantic-Advaitic Moorings of Swadeshi

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A Swadeshi Poster (Courtesy: Republic of Less ) Swadeshi is a thought, an ideal that arose across several countries and not just India. However, the roots in India arose from the 1905 movement whereby the extremist division of the Congress, led by the famous Lal-Bal-Pal trio (Lala Lajpat Rai, Bal Gangadhar Tilak and Bipin Chandra Pal) pushed for an aggressive movement towards home rule, furthered in 1916 by the Home Rule and later in the form of Gandhi’s spiritual form of disobedience. Across the three was a common thread running - creating an economic alternative to demonstrate that India was, just like many other Commonwealth nations or even the crown state of Britain, more than capable of being self-reliant, be it machinery, trade, textile, education or any other aspect. The act was not just political, but was driven by the sentiments related to Bharat Mata that was already whipping up – this was around the same time that the fiery intellectual revolutionary Aurobindo Ghosh through

The Lost Story of Bihar's Industrialization

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Today, this tweet came up to my knowledge, as I was walking through on the top trends on Twitter for a brief glance. What caught my eye was the image that was inserted in the tweet. Contrary to perceptions about Bihar being some agricultural rustic land, one saw some big plants having been named in the list. The tweet had an angry tone, and was asking that people are wanting to re-develop Bihar's industries so that the migrant labourers do not have to ever leave their state again. Ironically, while this topic rages on among the tweeters of Bihari origin, the topic seems to have hit a stonewall of silence, as if no one wants to talk about the story behind these pictures. https://twitter.com/25kumaranup/status/1263031899993198593 Migrants are not able to get work within Bihar has always been a major driver of the migrant exodus from the state. In 2015, when there were state elections, there was a detailed discussion after perhaps several decades in the news media about ind

COVID Relief Package - What Other Countries Have Done

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Courtesy: The Hindu COVID-19 has impacted economies across the world, forcing people to seek government assistance in times of desperation. India already announced the PM Garib Kalyan Package and there are talks of a package to help the besieged Micro, Small and Medium Enterprises (MSME) sector. Reserved Bank of India (RBI) too has announced a host of measures along with Ministry of Finance to ease compliance issues and infuse liquidity in the hands of the people to tide over the crisis.  Interestingly in India, a debate has also started on the very need of a stimulus package given its potential impact on fiscal credit, led by Ila Patnaik and Haseeb Drabu. This section is advocating that instead of fiscal package, states should rather be allowed to raise funds on their own, an ability they lost with the implementation of the GST. While the Indian government is working towards resolving the economic and human crisis in the most appropriate manner, we take a look at other

Make in India Needs to Account for Make in MSMEs Too

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Pic Courtesy: Times of India News came in today  of the government going all out to woo industries willing to move out of China. While I like the effort going on and find out timely, there are a few things that people really need to ponder over as we move forward. A step back is also needed to understand just where we stand and what we need, especially with respect to potential wave of industrial expansion that we are aiming for. Market Size and Currency Valuation People in government machinery cotinue to overestimate the ability of Indian market to absorb things is overstated. Some of our best industries were really earning from exports. Textiles, auto, ceramics, pharma - you name it, the export earning is big.  Also, analysts like Sajid Chenoy and several others have regularly pointed out also that India has really seen growth in the past two decades when two factors converged: 1. Export oriented units, especially MSME sector boomed and got big orders 2. Rupee's real

Government of India Announces Major Relief on Deadlines and Compliance

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Nirmala Sitharaman and Anurag Thakur at Yesterday's Press Conference (source: PIB) In yesterday’s press conference via video conferencing, Finance Minister Nirmala Sitharaman in English and her deputy Anurag Thakur addressed the media and clearly stated that the aim of these announcements was to help companies and individuals to ease out worries sitting in the mind of the people with respect to various kinds of regulatory requirements. Ms. Sitharaman noted that as efforts of the lockdown to flatten the curve for the Covid-19 spread are being undertaken, she also assured everyone of an upcoming economic package. The first step however, as Mr. Thakur stated, was to ensure that the first step is taken in the direction of addressing statutory and regulatory compliance related issues. Relief on Income Tax Compliance and Regulation Deadline for filing IT returns for FY18-19 have been extended to 30 June 2020. Moreover, a reduced interest rate of 9% shall now be levied till 30 June 2

Understanding the AAP Phenomenon in Indian Politics

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There is too much deliberation and discussion on what to make of the Aam Aadmi Party in the Indian political scenario. The problem with this discussion for me lies at several loose ends, none of which are tight enough to enable the curious onlooker any sense of the party and its moorings. My own two bits of 'wisdom' stem from distant viewing of the phenomenon. I may certainly be wrong; I may be right. But it is my submission that when seen from these perspectives, AAP and what it stands for can be perhaps better understood. AAP behaves not so much as a political party as it does like a Non Governmental Organization (NGO). This stems from the fact that most people who lead it have been associated with think tanks, NGOs and academia, and a major part of the base comprises of volunteers who have spared time for several causes close to their hearts. Even the campaign for Delhi's assembly elections ran more in the mode of a social enterprise networking with a large ma