Demonetisation was Primarily a Political Act Jayati Ghosh
Two weeks into the surprise announcement of by Prime Minister Modi of the demonetisation of “high value” notes, it is becoming more evident by the day that the primary purpose was political rather than economic, and that this political purpose was specifically directed towards ensuring the fortunes of the ruling party vis-à-vis its rivals. Nothing else can explain the abrupt nature of the announcement or the subsequent manner of its implementation, which has been so apparently insensitive to the specific needs of so much of India’s working population. While a lot of the criticism of this scheme has focussed on…
The Political Economy of Demonetising High Value Notes Jayati Ghosh
The Modi government is extremely adept at optics, at policy measures presented in a blaze of publicity that dazzles the public, rather than with the required attention to detail that might ensure their success. The latest announcement of the demonetisation of high value bank notes is of the “shock and awe” variety of measures. While presented as evidence of the government’s supposedly firm resolve to root out black money, in reality it will barely touch the problem of generation of black money, even as it is being implemented in a way that causes immense economic harm to ordinary people and…
Colombia: The search for elusive peace Jayati Ghosh
They march in tens of thousands, every Wednesday, through the streets of central Bogota: young and old; students and teachers; well-paid professionals, trade unionists and informal workers; healthy and disabled; urban and rural residents; family members and friends of the countless numbers who have been killed or maimed or have simply disappeared during this apparently endless war. They march for peace, and for a renewed attempt to find an agreement to settle the decades-old war between named and unnamed protagonists. Ever since the peace agreement painfully negotiated between FARC (the Revolutionary Armed Forces of Colombia) and the government was rejected…
How successful is China’s Economic Rebalancing? C.P. Chandrasekhar and Jayati Ghosh
China's rapid economic growth has slowed recently - but does this reflect the desired rebalancing of the economy away from investment to consumption and wage-led growth? China_Economic_Rebalancing (Download the full text in PDF format) (This article was originally published in the Business Line on November 8, 2016.)
Understanding the American Right Jayati Ghosh
A visit to the USA at the height of the Presidential election season, in a nation obsessed with polls that are just a few weeks away, creates simultaneous sensations of fascination, dismay and even horror. Even from a distance, the entire world has been watching this hugely significant election turn into an ever more sordid and distressing spectacle, with vitriolic lows in the campaign discussion that are perhaps unparalleled in any other election through time and across countries. The personal failings of both candidates are now only too well known, and are effectively blocking out all serious consideration of the…
Who’s Afraid of the Fiscal Deficit? Jayati Ghosh
The ongoing review of the Fiscal Responsibility and Budget Management Act 2003, by a Committee set up by the central government, has once again brought to the fore the vexed question of whether limits should be set by law to the government’s fiscal practices. More particularly, the issue being considered is whether the rigid fiscal deficit and current deficit targets set by the FRBMA are either meaningful or desirable in the contemporary economic environment. There are many reasons to be willing to reconsider the FRBMA. While strict rules for limits on public debt and the fiscal deficit (either in absolute…
Housing Market Frenzy in China C. P. Chandrasekhar and Jayati Ghosh
The urban housing market in China is experiencing a bubble that is driving property prices to unbelievable levels in some of the major cities. But the divergence in recent trends in house prices suggests that this bubble may soon burst. housing_market_china (Download the full text in PDF format) (This article was originally published in the Business Line on October 11, 2016-11-03)
The Pulses Conundrum C.P. Chandrasekhar and Jayati Ghosh
As inflation in the prices of pulses gives way to a price decline, a misplaced argument that the government should not regulate the private trade to curb speculation and stabilise prices is being expressed. Pulses_Conundrum (Download the full text in PDF format) (This article was originally published in the Business Line on September 26, 2016.)
Recognising Different Skills and their Uses Jayati Ghosh
Skill development and training are two terms that are greatly beloved of policy makers – and indeed of analysts in general – as they seem to present easy solutions to so many labour market concerns. It is commonplace in India, for example, to hear that our economic growth is constrained by the lack of skills among the bulk of our workers, and that skill development is therefore not only a policy priority but also a relatively easy, inexpensive and painless way to ensure employment growth, especially in formal activities. It is seen as the proverbial low-hanging fruit for governments to…
Recent growth in the Indian economy Jayati Ghosh
What does one make of the Indian economy? It is now declared to be the fastest growing in the world, “the one bright spot in an otherwise gloomy world economy” according to IMF Chief Christine Lagarde, apparently on course to “become a key engine of global growth”. There is no doubt that the economic potential of India is huge: now with more than 1.2 billion people, with hundreds of millions of people with middle class aspirations who will constitute a huge and growing market. Over the decades the economy has diversified to some extent, even if the share of manufacturing…
