Create a crisis and make it worse C. P. Chandrasekhar

On August 10, the government tabled a new bill in Parliament, with the aim of using its majority to push through a desperate policy initiative in the form of the Financial Resolution and Deposit Insurance (FRDI) Act. The Act seeks to create an ostensibly ‘independent’ FRDI Corporation, which would take over the task of resolution of failing financial firms from the Reserve Bank of India and other regulators. To that end, it is to be armed with special and near draconian powers to implement its mandate, and given control of the deposit insurance framework currently managed by the Deposit Insurance…

Foreign Investor Appetite C. P. Chandrasekhar and Jayati Ghosh

A brief decline in portfolio inflows into equity markets has raised the question whether foreign investment flows into India have peaked. The evidence of investments in debt markets suggest otherwise. That, however, need not be all good news. Foreign_Investor_Appetite (Download the full text in PDF format) (This article was originally posted in the Business Line on September 11 2015)

The Economy: 70 years after Independence C. P. Chandrasekhar

The defining feature of the economic programme of independent India’s first government was to accelerate the transition to a modern economy dominated by industry. Agriculture and related activities at that time accounted for around half of GDP and modern industry in the form of factory establishments for just above 6 per cent. Thus, colonial rule had made India the victim of the barriers to productivity increase typical of predominantly agrarian economies. These circumstances influenced the Nehruvian vision that made rapid diversification in favour of manufacturing the principal economic objective. The ‘big planners’ of that time did recognize that this will…

The Triple Talaq verdict: Victory in one battle in a much longer war C.P. Chandrasekhar and Jayati Ghosh

The Supreme Court’s welcome verdict in the Triple Talaq case should bring public attention to the problems and needs of separated and divorced women across all religious communities in India. Triple_Talaq (Download the full text in PDF format) (This article was originally published in the Business Line on August 28, 2017.)

What is really happening in Indian Manufacturing? C.P. Chandrasekhar & Jayati Ghosh

Data on organised manufacturing production do not really capture the impact of demonetisation and its effects on demand, but looking at some sub-sectors of consumer non-durable goods provides more insight. Indian_Manufacturing (Download the full text in PDF format) (This article was originally published in the Business Line on August 14, 2017.)

NPAs: All talk and no action C. P. Chandrasekhar

The media are full of it. Viral Acharya, a recently inducted Deputy Governor of the Reserve Bank of India (RBI), has declared publicly that resolving the problem of bank stress resulting from large non-performing assets (NPAs) on their balance sheets is the RBI’s priority, taking precedence over measures such as interest rate reduction to spur growth. The issue here is not just one of preventing bank insolvency, but of keeping the credit pipe open. Banks burdened with NPAs are likely to be less willing to expand their loan books, and if interest rates are too low, banks may be unwilling…

Growth in the Time of a Credit Squeeze C.P. Chandrasekhar and Jayati Ghosh

GDP growth figures for the last few years have camouflaged a deceleration in credit growth that has affected all but the retail loans segment quite adversely. Credit_Squeeze (Download the full text in PDF format) (This article was originally published in the Business Line on July 31, 2017.)

Demography and care in Europe: The impact of social relations C.P. Chandrashekhar and Jayati Ghosh

Trends in social relations are both affected by and impact upon economic changes. These in turn have an important bearing on desirable patterns of spending in the care economy, as suggested by an examination of recent marital trends in Europe. Demography_Europe (Download the full text in PDF format) ( This article was originally published in the Business Line on July 17, 2017.)