BOTTOM OR MIRAGE?
Why in news? Official estimates of gross domestic product for the fiscal third quarter have pegged growth in the festival demand-filled October-November month period at 4.7%, a distinct slowdown from the revised year-earlier and preceding quarters’ 5.6% and 5.1% paces respectively. Growth of different sectors: Manufacturing, which contributes just under a fifth to gross value added (GVA), was […]
ECONOMIC LIBERALISATION AND ITS FAULTS
Privatisation and Liberalisation The 1991-92 Budget speech marked the beginning of the end of the ‘Licence Raj’ in India. The 1991-92 Budget also announced the reduction of import duties and paved the way for foreign-manufactured goods to flow into India. Following this, most of the manufacturing sector was opened up to foreign direct investment. India’s […]
EXPLAINED: HOW A DOLLAR SWAP LINE WITH US FED CAN HELP
Why in news? India is working with the United States to secure a dollar swap line that would help in better management of its external account and provide extra cushion in the event of an abrupt outflow of funds, according to banking industry and government sources. India already has a $75 billion bilateral currency swap […]
WTO EXPECTS GLOBAL GOODS TRADE VOLUME TO SLUMP BY AS MUCH AS 32%
Why in news? The WTO released its outlook for global trade last week – Projecting merchandise trade to plummet by anywhere between 13% and 32% in 2020. Details Economists at the WTO appear certain that the disruption and resultant blow to trade will in all likelihood be far worse than the slump brought on by […]
EXPLAINED: DIRECT FARM-TO-KITCHEN DELIVERY PROVIDES RELIEF
Why in news? The disruption in supply chains as a result of the lockdown has spotlighted the relevance of a nearly two-decade-old initiative to reach fresh produce directly to consumers in Maharashtra, bypassing the mandis. The essential features of this alternative market channel — decentralisation and direct-to-home delivery — will remain valuable even after the […]
CENTRE MUST SPEND MORE, FOREGO TAX REVENUES
The Current Scenario As India nears the end of the lockdown period, the serious damage to the economy and livelihoods is beginning to make itself apparent. There is tremendous pressure from industry bodies to opt for a nuanced policy that will help economic activity to restart as they fear a collapse if activity is stopped […]
A TIME FOR EXTRAORDINARY ACTION: STATE INVESTMENT
Why is it a grave necessity? Even before the full impact of COVID-19 on the health of Indians is clear, the economic impact of the measures required to deal with the pandemic are already posing grave problems. The Indian economy was in dire straits even before COVID-19 reached our shores. Specifically, the lockdown and other […]
A DOUBLE WHAMMY FOR INDIA-GULF ECONOMIC TIES
Why in news? The Gulf region is at the epicentre of a perfect storm: apart from the COVID-19 pandemic, it also has an oil price meltdown. The situation’s impact on bilateral economic ties needs to be anticipated and managed. Oil prices in a tailspin- What happened? The region, especially Iran, has been mauled by COVID-19, […]
WILL COVID-19 AFFECT THE COURSE OF GLOBALISATION?
With several countries and regions locked down, will there be a redrawing of geographical boundaries? Much of what we saw in terms of global integration of trade and finance would suffer in the short run. When the world was hit by economic recession in 2008, trade dipped by almost 10% in 2009 when there was […]
FINANCING THE PANDEMIC RESCUE PACKAGE
The Current Predicament The priority for India is to ensure that it overcomes the COVID-19 pandemic and kick-starts GDP growth rather than fix the weaknesses in the macroeconomy: a high fiscal deficit of 7.49% and government indebtedness that was 69% of GDP in 2019. The Government’s financing strategy should be to raise long-term funds at […]