C. P. Chandrasekhar’s Blog

As January 20th, the day Donald Trump assumes his Presidency nears, the fear that he would turn US trade policy in a protectionist direction appears to increase. Protection against import competition and an attack on global relocation and outsourcing by American firms that are seen as destroying jobs in the US and immigration that is viewed as depriving the American working class of available livelihoods were central elements of the populist rhetoric that swung the white working class in Trump’s favour. Key items in Trump’s election campaign promise list were policies to recapture American jobs by clamping down on the…

Banks strapped with stressed assets are holding back on lending, dampening in the process the principal stimulus to growth in recent years. And there are no alternative routes to growth in sight. Waning_Stimuli   (Download the full text in PDF format) (This article was originally published in the Business Line on January 16, 2017.)

In the context of the failed demonetisation and continued shortage of currency, the government continues to push cashless digital payments. What are the implications for Indians? Digital_Payments    (Download the full text in PDF format) (This article was originally published in the Business Line on January 2, 2017.)

With the US Federal Reserve deciding to exit the era of low interest rates even when growth in the rest of the world economy falters or remains sluggish, economic uncertainty intensifies. Age_Uncertainty (Download the full text in PDF format) (This article was originally published in the Business Line on December 19, 2016)

Having announced that it is advancing the date for presentation of annual budgets by a month from end-February, the Finance Ministry is in the midst of preparations for next year’s exercise. But with the attention of economic analysts diverted to the unfolding crisis created by the government’s demonetisation decision, little attention has been paid to what would be the first budget to be presented in the post-planning era. It was to be expected that the implicit and explicit rules adopted by the government to make allocations under different heads of capital and current expenditure would have attracted much attention. But…

In the outcry against the disastrous demonetisation experiment of the Modi government one aspect that has not been given adequate attention is the damage it has done to the reputation and the balance sheets of the banks. Customers queueing before bank doors and ATMs seem on occasion more forgiving of the government than of the harassed bank employees, who are forced to ration out currency and offer those customers they can accommodate, less than even the maximum withdrawal permitted by the government and the RBI. When new notes are discovered in inexplicable sums in the hands of rogue operators, it…

Capital flight from Asia points to investor concerns about both political processes in the big Asian developing economies and medium-term economic prospects. developing_asia_hold_ground (Download the full text in PDF format) (This article was originally published in the Business Line on December 5, 2016)

A peculiar combination of factors, besides the global recession, explains India's poor export performance in recent times. India_Export_Collapse (Download the full text in PDF format) (This article was originally published in the Business Line on November 21, 2016.)

A distinctive feature of the current phase of capitalism is the growing role of finance capital as an instrument to establish capitalist hegemony and facilitate the appropriation of surplus. In the developed countries this transition towards financial hegemony was the result of the inflationary crisis and stagnation that affected the OECD countries after the late 1960s. The contractionary fiscal and monetary policy response to inflation intensified the deceleration in real growth. This together with the low real interest rates on bank deposits adversely affected banking business and profits. These developments triggered a process of deregulation and liberalisation in the financial…

At the time of writing, chaos continues to prevail at bank branches and ATMs across India, reflecting the larger truth that the government has for no sensible reason frozen a major part of India’s payments and settlements system. The government did this by declaring, for reasons wrong and indefensible, that currency notes of Rs. 500 and Rs. 1000 denomination which accounted for more than 85 per cent of the value of notes in circulation (and around 25 per cent in terms of sheer numbers) would not be legal tender within four hours of a dramatic speech by the Prime Minister…