Jayati Ghosh’s Blog

In India, we tend to obsess a lot about the growth rate of national income, worrying if it drops even a tenth of a percentage point below market expectations, and checking fiscal and monetary indicators with respect to the value of the national product. By contrast, we worry much less about the quality of that growth, or even its sectoral distribution. But surely the latter is more important, both for the conditions of people and the overall health of the economy now and in the future. Consider how the different productive sectors have grown in terms of real value added…

The bank frauds involving Punjab National Bank (PNB) and the companies associated with businessmen Nirav Modi and Mehul Choksi as well as the Rotomac case couldn’t have come at a worse time. The Indian banking system is already reeling under the pressure of growing NPAs, or non-performing assets (less politely known as loans that are not going to be repaid), which will touch nearly ₹10 lakh crore by March this year. This does not include the ₹6 lakh crore already written-off. This has already caused a slowdown in disbursal of bank credit, in turn affecting productive investment. Failure at many…

Forget the massive and overblown promises to farmers and on health insurance, which were not covered by any budgetary provisions.  Ignore the supposed increases in rural development spending, which are all to be met through “extra-budgetary and non-budgetary sources”. Disregard the declared concern for rural areas, the poor and women, which has translated into next to nothing in terms of actual allocations. The real story of this Union Budget is not to be found in the verbose rhetoric of the Finance Minister’s speech or in the supposedly “big ticket” items, which amount more to a manifesto of the ruling party…

Has the Union Ministry of Finance really turned gender-sensitive at last? At least according to its own lights, it has. Indeed, the creators of the Economic Survey are so excited by this new perspective that they have been moved to colour the cover of their document pink. (Presumably, no one has yet told them about how such colour stereotyping is no longer fashionable.) And – instead of the usual practice of clubbing together matters relating to women with children, social sectors and other supposedly “soft” stuff – there is an entire chapter in volume I of the Survey devoted to gender and specifically…

This government is especially good at optics, at managing public perceptions to persuade people that it is working for them, rather than doing so. So it is no surprise that Arun Jaitley’s pre-election Budget Speech went on about how much his government cares for the people, the poor, for farmers, for women, for people running small and micro enterprises, and so on. Many major claims were made: not just about the recent past, but about the coming fiscal year, with supposedly massive increases in public spending that would be directed towards these hitherto-ignored categories of people. But the actual increases…

For those with short memories, let’s remind ourselves that Arun Jaitley has been promising “top priority to farmers” for a while now. Indeed, this government came to power in 2014 promising to double farmers’ incomes in five years. Four years later, that goal post has been shifted, with all official documents now declaring that farmers’ incomes will be doubled by 2022, as per a “clarion call” given by Prime Minister Modi supposedly in 2017.  In fact, in Budget 2016-17, the Finance Minister had already announced a slew of measures that were supposed to double farmers’ incomes in five years, to…

This Debate contribution describes the promotion of digital rather than cash payments as a form of the financialization of finance, in its role as a payments system, with reference to recent Indian experience. The obsession with digital transactions as a marker of social and material progress is misplaced; it may become yet another means by which finance extracts rentier incomes out of relatively poor populations. Financialisation_Finance (Download the full text in PDF format) (This article was originally posted in the Wiley Online Library)

The use of exchange rates based on Purchasing Power Parities to compare income across countries and over time has become standard practise. But there are reasons to believe this could lead to excessively inflated incomes for poor countries and in some cases also inflate the extent of real changes over time. Estimates of gross domestic product growth in Chinese and Indian economies in recent years provide examples of this. ELRR_PPP_Exchange_Rates (Download the full text in PDF format) (This article was originally posted in the Economic and Labour Relations Review on January 30, 2018.)

It is widely expected that this Budget is going to be oriented towards farmers, at least in declared intent. The Finance Minister has already declared this – and even if he had not, the political pressures for it are now obvious. Persistent agricultural distress has been intensified by demonetisation; farmers have been openly protesting in various parts of the country; and the number of farm suicides has started climbing once again. But for this government, all that was not seen as much of a problem when elections were not around the corner. Now that there is a real chance that…

It seems that everyone loves to talk about inequality, and how much they dislike it. From Christine Lagarde in the International Monetary Fund to the Indian Prime Minister speaking at the World Economic Forum in Davos, Switzerland, everyone is united in condemning inequality globally and in their own countries. But ironically, the ones – especially those in the public gaze – who are most vociferous about this also seem to be those who ultimately refuse to take any measures to deal with it, even when such measures are obvious and available. It is almost as if allowing people to vent…