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Ashok Kotwal
GST Explainer: Introduction
Posted on: 16 Oct 2017
Seventeen years after its framework was formed, India’s biggest tax reform – the goods and ... read on »
Introducing a new feature: ‘Explainers’
Posted on: 16 Oct 2017
Our day-to-day lives are tossed around due to economic changes, resulting sometimes from g ... read on »
On demonetisation
Posted on: 23 Dec 2016
On the evening of 8 November, the Prime Minister announced on national television that Rs. ... read on »
Introduction to e-Symposium: The GDP conundrum
Posted on: 16 Nov 2016
Ever since India’s Central Statistical Organisation came out with the new GDP series with ... read on »

Tag: monetary policy

The lad(y) doth protest too much, methinks
Pronab Sen
Posted on: 13 Oct 2017

Former Finance Minister Yashwant Sinha has trashed the present government’s track record on economic management. In a recent article, economist Surjit Bhalla refuted Mr. Sinha’s claims with a point-by-point take-down. In this article, Dr. Pronab Sen responds to Dr. Bhalla’s critique.
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Inflation targeting: Should RBI revisit its inflation anchor?
Renu Kohli
Posted on: 09 Oct 2017

Ever since the RBI switched to flexible inflation targeting with headline Consumer Price Index as the inflation anchor, inflation has witnessed a dramatic collapse. In this article, Renu Kohli contends that volatile food prices have exposed the risks inherent in targeting headline CPI inflation.
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Should India hold US$400 billion of foreign exchange reserves?
Gurbachan Singh
Posted on: 03 Oct 2017

RBI’s foreign exchange reserves have now crossed the US$400 billion mark. In this article, Dr Gurbachan Singh discusses why India’s Central Bank should not hold such large reserves.
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Should emerging markets worry about US monetary policy announcements?
Poonam Gupta , Oliver Masetti , David Rosenblatt
Posted on: 03 Aug 2017

Emerging economies are routinely affected by monetary policy announcements in the US. This column finds that US monetary policy surprises have a significant impact on emerging economies’ exchange rates, equity prices, and bond yields. The impact is larger for surprise tightening of policy than for surprise easing, and disproportionately larger for large surprises. The spillover effects of policy announcements of other advanced economies are much weaker than those of the US.
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How India can reduce the size of its black economy
Parag Waknis
Posted on: 20 Mar 2017

In this article, Parag Waknis contends that if the Indian government is serious about addressing the black economy, fundamental changes in the structure and organisation of the economy and politics are required.
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Reviving the informal sector from the throes of demonetisation
Kaushik Bhattacharya , Siddhartha Mitra , Sarmistha Pal , Bibhas Saha
Posted on: 13 Feb 2017

While recent measures announced by the government indicate some awareness of the hardships inflicted on the informal sector by the note ban, more needs to be done. In this article, Bhattacharya, Mitra, Pal and Saha summarise the emerging evidence on the significant adverse impact of demonetisation on the informal sector, and suggest policy measures to ensure a steady recovery.
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Union Budget 2017-18: No amends for the sins of demonetisation
Siddharth Varadarajan
Posted on: 06 Feb 2017

Commenting on India’s Union Budget 2017-18, Siddharth Varadarajan, a Founding Editor of The Wire, contends that dealing with the aftereffects of demonetisation requires a fiscal and monetary boost, but the government appears to be in no mood to deliver it. In his view, this is because the fiscal cushion that demonetisation was supposed to provide never materialised.
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Aadhaar, demonetisation, and the poor
Silvia Masiero
Posted on: 09 Jan 2017

There is a view that an Aadhaar-centred apparatus of digital inclusion can shield the poor from the problematic effects of demonetisation. In this article, Silvia Masiero argues that constraints of technology ownership, access to informational networks, and infrastructural readiness prove the argument wrong. Other means are needed to reduce the severe humanitarian consequences of sudden cashlessness.
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Assessing the impact of demonetisation through the gender lens
Mitali Nikore
Posted on: 04 Jan 2017

In this article, Mitali Nikore, Senior Consultant at PwC India, highlights how demonetisation is impacting women differentially, and offers policy suggestions on how the negative effects can be mitigated.
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Currency shock: Does the gain justify the strain?
Parikshit Ghosh
Posted on: 11 Nov 2016

On the evening of 8 November, PM Modi announced that 1,000 and 500 rupee notes will cease to be legal tender post-midnight. In this article, Parikshit Ghosh, Associate Professor of Economics at the Delhi School of Economics, contends that there are bigger, juicier and relatively low-hanging fruit the government is not reaching for, in the fight against black money.
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Are grain procurement shocks inflationary?
Chetan Ghate , Sargam Gupta , Debdulal Mallick
Posted on: 17 Oct 2016

Central banks in emerging markets grapple with understanding the inflationary impact of grain procurement shocks because the precise link between the agriculture sector and the rest of the economy may not be well understood. This column presents a framework to understand how the government’s grain procurement policy in India can be inflationary, and what the appropriate monetary policy response should be.
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Inflation targeting: A long way to go
Rajeswari Sengupta
Posted on: 18 Jul 2016

The Finance Bill, 2016, amended the Reserve Bank of India (RBI) Act, 1934, to define inflation targeting as the primary objective of the central bank. In this article, Rajeswari Sengupta, Assistant Professor at IGIDR, contends that to actually become an inflation-targeting central bank, RBI will need to undertake a series of reforms to build institutional capabilities and improve the monetary policy transmission mechanism.
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Fiscal deficit and growth slowdown
Gurbachan Singh
Posted on: 17 Feb 2016

Ahead of the Union Budget, several policymakers and economists in India have advocated increasing public spending to spur economic growth. In this article, Gurbachan Singh argues that even if India is facing a slowdown, a larger fiscal deficit is not the solution – more so now that RBI and the government have adopted inflation targeting. The prospect of a fiscal crisis may be farfetched but India may be incurring costs differently.
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Monetary dimensions of the recent Indian inflationary experience
Pronab Sen
Posted on: 12 Oct 2015

Inflation in India remained at or near double-digit levels between 2009-10 and 2014-15. In this article, Pronab Sen, Country Director, IGC India Central, argues that while the initiation of the inflationary process may have been rooted in structural factors, there is a monetary story to be told about its propagation across commodities and perpetuation over time. This understanding explains RBI’s helplessness and may help in designing appropriate policy interventions for similar inflationary episodes in the future.
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Charting a course for the Indian economy
Karthik Muralidharan , Arvind Subramanian
Posted on: 05 Aug 2015

Karthik Muralidharan (Associate Professor of Economics, University of California, San Diego) speaks with Arvind Subramanian (Chief Economic Adviser, Government of India) on a broad set of issues ranging from the uniqueness of the Indian development model, the political economy of reforms, reducing factor misallocation in the economy, enhancing State capacity, financing India´s infrastructure needs, to the implications of the Fourteenth Finance Commission, improving the design of social welfare programmes, and climate change.

This is the third in the series of I4I Conversations.

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Where is India’s growth story headed?
Ila Patnaik , Madhavi Pundit
Posted on: 25 May 2015

The global financial crisis and domestic policy paralysis led to a decline in firms’ investment activities and investors’ business confidence in India. Could this have affected the economy’s long-term growth? This column contends that institutional capacity for reform and the right policy action can render the negative investment shock temporary, and ensure that the trend growth of output remains strong.
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Evaluating the risks of inflation targeting in India
Renu Kohli
Posted on: 03 Mar 2015

The adoption of flexible inflation targeting by the Indian government and RBI is a landmark change in the country’s monetary policy. In this article, Renu Kohli - a macroeconomic policy specialist - discusses the risks associated with the move. She reasons that the national and global macroeconomic environment and the timing of transition to the new regime are crucial to its success.
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Revisiting Indian inflation
Kirti Gupta , Fahad Siddiqui
Posted on: 10 Oct 2014

Persistently high inflation is a key challenge facing India today. This column analyses long-term trends in Indian inflation and causal factors. It also discusses the current thinking of the RBI on revising and strengthening India’s monetary policy framework.
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Inflation targeting in India: Right and wrong
Gurbachan Singh
Posted on: 31 Jan 2014

An RBI-appointed Expert Committee has recommended targeting a 4% inflation rate, but allowing it to vary between 2% and 6%. This column takes a different position on the target and leeway. It argues that achieving truly low and stable inflation alongside macroeconomic stability is not as difficult as is usually made out to be, if the right policies are in place.
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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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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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