The other face of Private Banking C.P. Chandrasekhar and Jayati Ghosh

Private banks, especially foreign ones have relied on off-balance sheet liabilities to earn revenues and profits, courting risk and leaving the business of banking proper largely to the public sector banks. Other_Face_Private_Banking  (Download the full text in PDF format) (This article was originally published in the Business Line on January 15, 2018)      

The Indian Economy in 2017 Jayati Ghosh

This was the year that the economy tanked. Not necessarily in terms of official growth figures: according to the CSO, GDP growth decelerated, but not by that much. And Finance Minister Arun Jaitley was quick to proclaim that, with GDP growing by an estimated 7.1 per cent for the current financial year, India still remains among the world’s fastest growing economies. Financial investors seem to agree: over the calendar year the stock market has boomed, with the BSE Sensex rising by around 25 per cent and the Nifty50 Index by 28 per cent. But these estimates sit uneasily with the…

The Gujarat Model’s Failure explains why the Economy has become such a significant Factor in the coming State Elections Jayati Ghosh

By now, almost everyone in the country knows that – whatever else they may or may not be able to do – one thing Narendra Modi and the team around him excel in is the art of public relations and media management. This is the reason that “the Gujarat model” of handling a state’s economy became such a major talking point in the run-up to the 2014 general elections. This model was widely projected across major media as a huge success in delivering both growth and development, even though Gujarat’s performance was at best middling among all states and in…

Poverty Cut by Growth Despite Policy Failure Jomo Kwame Sundaram

At the UN Millennium Summit in September 2000, world leaders committed to halve the share of people living on less than a dollar a day by 2015. The World Bank’s poverty line, set at $1/day in 1985, was adjusted to $1.25/day in 2005, an increase of 25% after two decades. This was then re-adjusted to $1.90/day in 2011/2012, an increase by half over 7 years! As these upward adjustments are supposed to reflect changes in the cost of living, but do not seem to parallel inflation or other related measures, they have raised more doubts about poverty line adjustments. The…

Growth versus Redistribution Prabhat Patnaik

A curious debate has arisen in the country of late which has gained importance in the context of the proposed food security legislation, though this legislation itself is not being explicitly debated. Two Columbia University economists, Jagdish Bhagwati and Arvind Panagariya, have argued that attempts at redistribution must come only after a  period of sustained high growth, for otherwise there will be too little to distribute; hence all efforts must be concentrated now on achieving growth. Though their case has been spoilt somewhat by one of them making personal broadsides against Amartya Sen, who is alleged to hold a contrary…

Paraguay: Political chaos amidst economic crisis Ranja Sengupta

Political confusion and violent protests have recently rocked the small nation of Paraguay. The situation has been steadily growing out of control, rendering increasingly vulnerable the position of the current president, Gonzalez Machhi. Protestors have been demanding his resignation and reversal of the free market policies that the government has been trying to push through. The intensity of the protests in July brought on a declaration of internal emergency. President Machhi has alienated members of his own Colorado Party as well as those of the opposition parties with whom he had formed an alliance of 'National Unity' in 1999. If…

South African Finance Minister Admits he was Wrong

Finance minister Trevor Manuel advocated spending cuts, the dismantling of trade barriers and fighting inflation during the past six years, all under the guidance of World Bank economists. He is still waiting for the payoff. South Africa's economic growth has topped 4 percent only once since the mid-1990s. A third of the workforce is jobless. The government has faced a wave of strikes driven by anger at the slow gains in living standards since apartheid ended in 1994. Now, Manuel and even some World Bank officials say Africa's largest economy has not gained as expected from the lender's advice. Their…

East Timor after Independence -Which way will it go? Sabyasachi Mitra

While East Timor will celebrate its first independence day on May 20, 2002, the soon to be independent nation is already plagued with problems. Centuries of Portuguese colonial rule and 24 years of brutal, illegal Indonesian military occupation have made East Timor one of the poorest places on the planet. East Timor has a 60% illiteracy rate, a per capita gross national product of $340, and a life expectancy of only 48 years. The infant mortality rate is 135 per 1000 live births, and the maternal mortality rate is twice that of other countries in Southeast Asia and the Western…