Do Purchasing Power Parity exchange rates mislead on incomes? The case of China C.P. Chandrasekhar and Jayati Ghosh

Ever since Larry Summers and Alan Heston produced what become known as the “Penn World Tables” comparing prices and thereby the purchasing power of currencies across countries, the urge to use some deflator of market exchange rates to compare incomes across countries has been strong. The economic theory behind this is that exchange rate comparisons of less-developed economies consistently undervalue the non-traded goods sector, especially labour-intensive and relatively cheap services, and therefore underestimate real incomes in these developing economies. In some cases, this can be quite significant. In larger emerging markets like China and India, the conversion factors have been…

Shopping Frenzy in the New China C. P. Chandrasekhar

In an otherwise gloomy world economic environment, a new kind of record given the media bizarre cause to cheer: the value of online sales notched up by Chinese e-commerce giant Alibaba on a single discount sales day. Global business headlines screamed that in its annual sale on Singles’ Day, 11 November 2017, Alibaba had registered a record sales value of 168.2 billion yuan or $25.3 billion.  Singles’ Day, or 11 November, was, because of its 11/11 aspect, reportedly chosen around 25 years ago by students of Nanjing University to celebrate the fact of being single. Using what has evolved to…

Neo-liberalism has been a Disaster for Nepal An Interview with Prof. C.P. Chandrasekhar

Why is neoliberalism bad for India and Nepal? What are its major flaws? Mahabir Paudyal and Prashant Lamichhane from myRepublica caught up with Professor C.P. Chandrasekhar when he was in Kathmandu last week to discuss the impact of neo-liberal economic order in the two countries, and the prospects of a socialist-oriented economy in Nepal. Nepal and India adopted liberalization almost at the same time during the 1990s. Thirty years on, what kind of impact has it had in the two countries? You need to look at liberalization at two levels. Cross-country liberalization, which is a set or package of policies implemented…

Indian IT hits a Speed Dump C. P. Chandrasekhar and Jayati Ghosh

A sharp deceleration in growth and restricted employment expansion in the IT sector, India’s post-liberalisation showpiece, has implications beyond the industry’s boundaries. Indian_IT_Speedbump (Download the full text in PDF format) (This article was originally posted in the Business Line on November 20, 2017.)

The Slide of an Aging Leader C. P. Chandrasekhar

After 15 years, the Tata group has exited the mobile telephony business. Its assets in the area located in Tate Tele Services Ltd (TTSL) have been taken over by Bharti Airtel. The Tata name has featured in the mobile telephony market ever since it acquired Hughes Telecom (India), incorporated in 1995, and renamed it Tata Teleservice Maharashtra in 2002. Since Tata Tele’s other enterprise, retail fixed line, and broadband businesses are being merged with Tata Communications and Tata Sky, TTSL is in essence being dismembered. Few of the firm’s current employees would be absorbed by Airtel or the Tatas themselves.…

The Crisis in Agriculture C. P. Chandrasekhar and Jayati Ghosh

The dilution of government intervention in the form of minimum support prices, procurement and public distribution is undermining the medium-term viability of agricultural production in India. crisis_in_agriculture (Download the full text in PDF format) (This article was originally published in the Business Line on October 23, 2017.)

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…