C. P. Chandrasekhar’s Blog

The sense in business circles, that demand is weak and growth is slowing down, was confirmed when GDP figures for the second quarter (July-September) of financial year 2024-25 showed growth at 5.4 per cent. This was well below forecasts of annual GDP growth in the 7 per cent range, and the 8.1 per cent recorded in the corresponding period of the previous year. Following that, several international and domestic institutions have revised downwards their projections for the full financial year. Manufacturing in particular has performed poorly, with annualised growth of 2.2 per cent in the second quarter of 2024-25, as…

When Azerbaijan as the Presidency of this year’s Conference of Parties (COP29) held at Baku, in Azerbaijan, informed delegates working on extended time that participating countries had arrived at an agreement, there were many who disagreed. India, using an odd metaphor, declared that the document was nothing more than an optical illusion. Others had been less diplomatic and called it out as a joke. And the most affected and vulnerable set of small island states and less developed countries had a couple of days earlier symbolically walked out of a meeting stating that their voice had been completely ignored. The…

In a surprise first-day declaration from the Azerbaijani Presidency of this year’s 29th Conference of Parties, a “deal” on the institution of carbon markets with clear rules with regard to ensuring assessment of claims and integrity of data relating to carbon emissions reduction, under the United Nations auspices, was announced. If implemented, this would help create credible carbon markets and allow carbon prices to ensure the realisation of the promises of decarbonisation implicit in the nationally determined contributions of different countries. But closer scrutiny suggests that neither is the deal an adequate and complete agreement nor is it likely to…

Extended by a day in a show of symbolism, this year’s climate summit, the 29th Conference of Parties (COP29), ended in collapse. The widespread consensus that this was the case concealed, however, differences as to what reflected the collapse. Developed country governments have attempted to identify the collapse as being the result of a conscious effort by the oil-dependent Azerbaijani Presidency to facilitate an oil-exporter walk back on past commitments to phasing out fossil fuels. But this year’s Summit was slated to be a Finance COP. It was to decide on the magnitude and form of the pretentiously titled New…

In global climate negotiations, that continued at the twenty ninth edition of the Conference of Parties (COP29) in Baku, Azerbaijan, there is agreement on one issue. If the international community has to take forward a multilateral agenda to keep global warming below the 2°C, and even better 1.5°C, ceiling, finance to the tune of trillions of dollars would be needed in the years to 2030 and onwards to 2050. Those resources must be urgently mobilised, since the world is off-track in the effort to stay within the warming targets. And it is completely off the rails when it comes to…

For some time now, global economic news reporting has been dominated by the growth slowdown in China. The tone of that reporting is conflicted. On the one hand, there is a barely suppressed sense of satisfaction or “schadenfreude” (pleasure derived from another’s misfortune). The myth of a ‘rising China’ capable of sustaining high growth for decades is seen to be busted. On the other hand, there is a sense of fear about the consequences for the rest of the world. This is not restricted to the less developed countries exporting primary commodities to China and receiving large investments from it.…

The Sveriges Riksbank Prize, the Nobel for “Economic Sciences”, has always been controversial. This is true of the 2024 award to Daron Acemoglu, Simon Johnson, and James Robinson as well. Typically, the economics Nobel is awarded to mainstream economists for work that directly or indirectly privileges the market in capitalist economies and makes a case for limited intervention by the state. It also tends to be awarded to academics from a few institutions that control the “academic” discourse and serve as gatekeepers to the higher echelons of the profession, at least in the US. But claims are that this time…

In early October, in a show of pique, a European Commission proposal to impose additional tariffs of up to 35.3 per cent (on top of the pre-existing 10 per cent) on electrical vehicles (EVs) imported from China, was passed by a majority vote in the European parliament. With that vote, Europe joined the US in the effort to use high tariffs to block imports from China. The US has, typically, responded to China’s success in EV manufacture by raising tariffs to as high as 100 per cent despite lower imports of Chinese vehicles. It has also used national security as…

The financial media in India and abroad are flagging the likelihood of a meltdown in India’s financial sector, resulting from large scale defaults on personal loans. Even the Financial Times of London has chosen to devote considerable column space to an article focusing on a potential problem in a country that ranks among the globe’s fastest growing. Three developments have triggered this concern. First, a statement from the Governor of the Reserve Bank of India that “excessive” retail lending by Indian banks, “mostly for consumption purposes”, needed to be closely scrutinized from a “macro-prudential point of view”, or simply put,…

Europe is clearly battling to stall its decline in the global economy. Most recently, the Mario Draghi report on “The future of European competitiveness” commissioned by the European Union reflected that sentiment. At the centre of Europe’s economic decline is the descent of former leader Germany to the status of the “sick nation” of Europe. Inflation, rising unemployment, falling competitiveness, and slow growth have been plaguing the nation for the last few years. This European disease, while leading to much handwringing on the future of Europe vis-à-vis the rest of the world, is in practice triggering economic conflict within Europe…