Jayati Ghosh’s Blog

Everyone expected the Modi government to do something big – or at least promise something big – before the general elections. Everyone also sensed that it would be something to do with farmers, one of the economic and social concerns that has now also become a political talking point. But perhaps no one expected that the government would dare to make massive budgetary commitments for the coming year in a Vote on Account (or Interim Budget), which is constitutionally outside the mandate of an outgoing government. A Vote on Account is only supposed to include spending measures for the immediate…

Unbelievable but true: there is nothing – repeat, nothing at all – in the Budget to deal with the job crisis. This is crazy, since lack of employment (especially for the young) and the problems in agriculture have emerged as the biggest two problems in the Indian economy and society today. It is also politically tone-deaf, since the government should really have been on the back foot on this one, as its suppression of official jobs data (the NSSO Survey of 2017-18) cleared by the National Statistical Commission, had just been exposed. In the circumstances, it was only to be…

The attacks by the Modi government on many of India's institutions have been noted, but the destruction of India’s statistical system was not adequately recognised or condemned. That is, not until the latest revelations on how the Government is refusing to release the NSSO’s employment survey for 2017-18 led to the resignation of the last two remaining independent Members of the National Statistical Commission. This attack on official statistics is obviously important, because it denies citizens access to reliable data on what is going on in the economy and assess the government’s performance. It is sad, because India had managed…

The Brahmastra, or ultimate weapon, of 10% reservation in government employment for economically weaker sections (EWS) has been cynically deployed already, but even that does not seem to be delivering the desired public approval. Perhaps the general public has wised up to the fact that central government jobs have in fact declined over the past four years (by more than 75,000 since 2014) and so a small reserved portion of a shrinking pie does not seem all that attractive. However, even in the limited time available, there is much a committed government can do to tackle unemployment. And these could…

It’s that time of year again – the time when all eyes turn to those magic numbers, the actual and proposed fiscal deficits of the central government as shares of GDP. Breathless news anchors will interrogate financial investors on what the numbers mean, and why 3.5 per cent or 3.7 per cent is fatally worse than, say, 3.4 per cent or 3.2 per cent or less. Everyone will breathe a sigh of relief if the Finance Minister achieves his fiscal targets, while there will be gloom, doom and concern if the government is found to have overstepped. All this scrutiny…

India’s external account has once again emerged as a source of concern, as the current account deficit widened to reach 2.4 per cent of GDP over April-June 2018. This increase was driven entirely by the trade deficit, which grew rapidly in 2017-18. Since 2014, as Figure 1 shows, exports have been mostly stagnant (after a period of healthy increases before then) but total imports came down and then increased sharply in 2017-18. This was reflected in the total merchandise trade deficit, which declined for several years from the large deficit observed in 2013-14, and only rose sharply once again in…

New findings from the International Labor Organization show that workers across many advanced and emerging economies continued to miss out on the gains from growth in 2017. Rather than trotting out the usual suspects – trade and technology – it is time for policymakers to place the blame where it belongs. For Full article please click here    

The sheer ineptitude of economic policymaking under prime minister Narendra Modi’s government has been evident from almost the beginning of its tenure. What is also now well-established is the aggressive and rigid approach of the political leadership, which generally pushes its own (often hare-brained) policies regardless of the views of experts and the wider impact on ordinary people, both of whom it tends to treat with disdain. Surely, any of the economic advisors and others in significant positions of economic policymaking would have known all this for some time now. Any self-respecting central bank governor (or indeed anyone described as…

Everyone seems to have woken up to the fact that global debt levels are too high and portent difficulties ahead. As Figure 1 indicates, the levels of credit to GDP, which were so high as to be unsustainable and resulted in the big crisis of 2008, have increased even more since then. There was a phase of deleveraging in the advanced economies until around 2014, and in developing countries and emerging markets until 2011, but since then, credit/debt has been expanding again. So much so that the credit GDP levels in 2017 were 15 per cent higher than in 2008…

India is often mistakenly seen as a country with relatively low economic inequality. In fact, there were always very significant economic inequalities in India, which intersected with social and locational inequalities in complex ways. More significantly, the country’s inequalities widened after the internal and external economic liberalization measures from the early 1990s, which attracted global financial investors and boosted economic growth considerably. The estimates of low inequality are usually based on the fact that the Gini coefficients of consumption expenditure have not been so high in India (although they have increased over time). The National Sample Survey data on which…