Macroeconomic Policy
 
Monkeying with the rupee
Debraj Ray
Posted on: 04 Sep 2013

In this article, Debraj Ray discusses the sharp depreciation of the rupee and the ongoing outflow of foreign capital from India. Further, he refutes claims that the costs associated with the Food Security Bill are having a negative impact on the Indian currency.
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What saved the rupee?
Arvind Subramanian
Posted on: 06 Nov 2013

This article analyses the dramatic fall of the rupee between May and August this year, and its recovery thereafter. It asserts that it was primarily external factors and an unconventional intervention by the Reserve Bank of India that influenced the evolution of the rupee during the period.
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The Reserve Bank´s mission impossible?
Arvind Subramanian
Posted on: 29 Nov 2013

India’s current inflation is unprecedentedly high – not in absolute terms but relative to the rest of the world. This article discusses the role of inflation in the recent currency crisis, and argues that taming inflation may prove difficult because the social consensus in favour of moderate inflation appears to have eroded.
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Taxation´s fatal neglect?
Devesh Kapur , Arvind Subramanian
Posted on: 14 Feb 2014

Today, the public discourse on government finances in India is largely focused on spending. This article emphasises the importance of taxes, particularly income tax, in ensuring citizen participation in holding the government accountable. It shows that while economic growth in the past decade was faster than in preceding years, expansion of the direct tax net slowed down.
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Why taxing property is essential for local government accountability
Devesh Kapur , Arvind Subramanian
Posted on: 03 Mar 2014

With rapid decentralisation and urbanisation, wealth is increasingly vested and locked up in land and property in India. In their previous article, Kapur and Subramanian emphasised the importance of direct taxes in ensuring citizen participation in holding the government accountable. In this part, they recommend that the 14th Finance Commission should promote tax decentralisation by incentivising state and local government to increase the property tax net.
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India's unique crisis – a short term fix
Devesh Kapur , Arvind Subramanian
Posted on: 20 Dec 2013

While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In their previous article, Kapur and Subramanian discussed the misdiagnosis of India’s crisis, and consequent errors in policy remedies. In this part, they outline short-term actions for reversing the growth slowdown, reducing current account deficit and preventing inflation.
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The Goods and Services Tax: Light at the end of the tunnel?
Nirvikar Singh
Posted on: 18 Jun 2014

As the Goods and Services Tax is inching towards implementation, a major overhaul of the Indian tax system has also been in progress. This article discusses three key strengths of the ongoing process, and highlights the merits of introducing GST as early as possible.
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The Jaitley Budget: Planning for crisis
Arvind Subramanian
Posted on: 23 Jun 2014

El Nino can potentially derail the best-laid plans of the new government in India. The article contends that the finance minister would do well to plan his first Budget by attaching a reasonable probability to a food crisis this year. The Budget will need to be as much about creating a basis for successful crisis action later in the year as about launching epochal reforms now.
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Keys to successful reform in India
Eswar Prasad
Posted on: 09 Jul 2014

The new Indian government’s first budget - due to be unveiled this week – will be an important indicator of how forcefully the new PM intends to translate his mandate of putting India’s economy back on track into effective actions. This article contends that both strategy and specifics will be crucial for this budget to effectively kick-start economic reforms.
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Modi’s first Budget for India: Disappointing but retrievable
Arvind Subramanian
Posted on: 15 Jul 2014

In this article, Arvind Subramanian contends that while Modi’s first Budget was good on vision, it fell short in terms of fiscal adjustment, budgetary transparency and credibility, and specificity and timelines on important policy actions. In his view, these shortcomings are remediable over time as the government forges the required political deals and improves administrative capacity to implement difficult policy actions.
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