Jayati Ghosh’s Blog

So maybe the demonetisation never really happened. Maybe it was all a bad dream: the late evening announcement, the subsequent cash crunch, the regulatory chaos, the deaths because people could not get medical treatment with old notes. Maybe the reporters who described all the job losses and migrant workers forced to go back home and farmers unable to get their sowing done in time and so on were all affected by a mirage. Maybe those who conducted surveys and found massive drops in sales, in consumer spending, in livelihoods of informal workers and self-employed people were similarly deluded. And of…

Although divorce rates are low in India, separation is the dominant form of marital dissolution, and this is especially problematic for women because of the uncertain legal status and lack of rights. Marital_Breakdown_India  (Download the full text in PDF format) (This article was originally published in the Business Line on February 27, 2017)  

The Modi government over the past three years has not been noted for its generosity towards the social sector and spending to meet goals of improving human development. Indeed, if the past were any guide, there would be little reason to expect much increase in social sector budgetary outlays on the part of the central government. However, this year, for various reasons, analysts were led to expect that there would be at least some change from the fiscal disdain the government has shown in the past to this area. After all, the failed demonetisation has severely dented living standards of…

Post-Trump expectations of a shift back from an easy monetary policy with low interest rates to reliance on a fiscal stimulus for growth are reversing trends in global bond markets. Bond_Market_Reversal  (Download the full text in PDF format) * This article was originally published in the Business Line on February 13, 2017

There is a lot of buzz globally around the idea of a Universal Basic Income (or UBI). It is perceived as one way of coping with technology-induced unemployment that is projected to grow significantly in the near future, as well as reducing inequalities and increasing consumption demand in stagnant economies. Certainly there is much to be said for the idea, especially if it is to be achieved by taxing the rich and particularly those activities that are either socially less desirable or are generating larger surpluses because of technological changes. Indeed, that is precisely the proposal of the French Socialist…

The most striking thing about Arun Jaitley’s budget presentation for 2017-18 is just how unstriking it is. A lot of was expected from this Budget, and it is largely the Government’s own fault that the expectations were so many and so contradictory. In the event, the Finance Minister has presented a very “ordinary” Budget, which is unlikely to satisfy most people who recognise that these are definitely not “ordinary” economic times. First, this Budget comes directly in the wake of demonetisation followed by painfully slow and inadequate remonetisation, which has dealt a body blow to the informal sector as well…

How to mitigate and reverse the adverse impact of the demonetisation ought to be at the top of the Finance Minister’s agenda for the coming Budget. The effects of the ill-considered and even more poorly implemented scheme are still being felt across the country, in the form of reduced economic activity, job losses and reductions in income and consumption. Since remonetisation is still incomplete – and the government has already threatened not to replace the full value of the demonetised currency in a coercive push to digitisation – the impact on economic activity from that one source alone will continue…

This year’s Budget would never have been easy to present, with the economic uncertainty swirling around the globe and the demonetisation-induced domestic downturn still ongoing in the Indian economy. But the Modi government seems to be determined to make its own task harder. It has managed to generate expectations that will almost inevitably be unfulfilled, through a weird combination of denial of the manifold ill-effects of demonetisation, encouragement of all sorts of ideas around the universal basic income, and simultaneous acceptance of relatively rigid fiscal targets. But consider first the very timing of the Budget announcement, in the context of…

The government's claim that it has ensured electricity for all does not seem to be warranted by the evidence. Spreading_Light  (Download the full text in PDF format) (This article was originally published in the Business Line on January 30, 2017.)