Vanishing Green Shoots
Apr 9th 2019, C.P. Chandrasekhar and Jayati Ghosh

Governments and central banks that were upbeat about global economic recovery are turning pessimistic, making this one more episode of a green shoot that died young.

Housing Market Mayhem
Mar 12th 2019, C.P. Chandrasekhar

C.P. Chandrasekhar argues that the reduction in GST rates for the housing sector is primarily directed towards addressing the concerns of real estate developers who have generated excess inventories because of easy excess to credit and high profit expectations.

Resources for Welfare Expenditures
Feb 19th 2019, Prabhat Patnaik

Prabhat Patnaik argues that wealth tax and inheritance tax, even if levied only on dollar billionaires in India, will be sufficient to finance the creation of a welfare state in India in which every citizen will enjoy basic economic rights.

The Skewed Structure of India's Bond Market 
Feb 11th 2019, C.P. Chandrasekhar and Jayati Ghosh

In trying to deal with large volumes of bad debt, especially corporate debt owed to the banking system, measures to activate the corporate debt market are being pushed. But experience suggests that investors are unlikely to bite.

The Strange form of "Disinvestment"
Jan 30th, 2019, C.P. Chandrasekhar

Under the NDA government disinvestment is increasingly turning out to be a process in which surpluses are wrung out of PSEs or government linked institutions to support the budget, instead of the usual route of sale to private buyers. Apart from adversely affecting the modernization and expansion plans of PSEs, this change in the nature of disinvestment does not enable the government to raise its expenditure to the desired levels in a pre-election year.

A Misleading Debate
Jan 10th 2019, Prabhat Patnaik

The government's desire to use RBI’s reserve is based on the erroneous theoretical understanding. This faulty formulation results from the need to avoid upsetting global finance

Do 'Markets' talk sense?
Dec 20th 2018, C.P. Chandrasekhar

Markets never were nor can be “rational”, they cannot be sensible enough to discipline governments and central banks to do the right thing. Rather, they have in recent decades forced central banks to adopt measures that fuel speculation, and are therefore patently wrong.

Is Shadow Banking a Serious Threat in Emerging Markets? 
Dec 4th 2018, C.P. Chandrasekhar and Jayati Ghosh
Is shadow banking in emerging markets the next big trouble spot for the global financial system? Or is this problem over-hyped?
On taking Sides in the RBI-government Stand-off
Nov 27th 2018, C.P. Chandrasekhar
The government has crossed the red line in recent times, influenced in part by the mess its policies have created and substantially by the need to win voter support in the impending elections. This clearly is an area where the RBIs willingness to stand up to the government's demands needs appreciation, But these gestures should not be treated as a spat in which the RBI is free of blame and only the government is remiss. The central bank too needs to shed its biased neoliberal perspective and admit to responsibility for its past acts of commission and omission that have also contributed to the current mess in the economy.
A Heart-rending Episode 
Nov 14th 2018, Prabhat Patnaik
The Bengal famine of 1943 in which 3 million persons died was the direct result of the escalation of British war expenditure on the eastern front. Such massive loss of life could have been avoided if the manner of financing war expenditure had been different. The war expenditure on the eastern front was financed by a "profit inflation" generating "forced savings". Financing war expenditure this way imposed a heavy burden, especially on the poor people of rural Bengal who were net food purchasers. The forced reduction in consumption they had to undergo, entailed a drastic reduction in their foodgrain intake, and hence the famine.
The Modi Government’s Spat with the RBI
Nov 12th 2018, Prabhat Patnaik
The Modi government's spat with the RBI is rooted in the structural characteristic of neo-liberalism. This entire debate has arisen as a fall-out of neo-liberalism, of the contradictions that inevitably arise in a neo-liberal economy between the compulsion on the part of the government to please international finance and its need to win elections. Expenditures have to be stepped up for the latter, while international finance disapproves of such stepping up.
India's Central Bank and Finance Ministry Must Introspect Before Rushing to Battle
Nov 5th 2018, Sunanda Sen
The conflict represents the need for an honest attempt to identify lapses in financial governance and remedies that do not encroach on each other's responsibilities as well as rights.
The Tumbling Rupee
Nov 1st 2018, Prasenjit Bose and Zico Dasgupta
Unless policy measures address the structural problems underlying India's current account imbalance, piecemeal steps like tariff hikes would fail to stall the tumbling rupee. There is an urgent need to bring down the import intensity of the growth process it, besides gradually moving away from high fossil fuel dependence over the longer term. It is high time to impose some curbs on volatile capital flows, which aids and abets bubble-building only to inflict currency meltdowns in future.
The Fall of the Rupee
Sep 25th 2018, Prabhat Patnaik
Falling rupee requires immediate government action. Awaiting an equilibrium that never comes would not only keep squeezing the working people but would eventually make the government run to the IMF and other financial institutions in panic. Measures like raising interest rates, fiscal compression, and using foreign exchange reserves have their own fallouts. There have to be direct restrictions on inessential imports combined with some controls on capital outflows.
The Indian Economy in A Tailspin
Sep 24th 2018, Prabhat Patnaik
A combination of direct import controls on inessential items, reduction of petro-product prices, measures for reducing the consumption of such products, and direct taxation, especially on wealth, is the obvious way of getting out of the tailspin in which the Indian economy is currently caught. There is no alternative to these measures if we are to avoid the fate of countries that eventually run to the IMF and get caught in the vice-like grip of "austerity".
Who's Manipulating China's Exchange Rate?
Sep 11th 2018, C.P. Chandrasekhar and Jayati Ghosh
Contrary to western perceptions, the Chinese government's attempts to manage the exchange rate over the past few years have actually been directed to shoring up its value, rather than forcing depreciation.
Finance versus the People
Aug 27th 2018, Prabhat Patnaik
There is a fundamental contradiction between democracy and neo-liberal capitalism. This contradiction can be seen from the exuberance of the market with the removal of a challenge to communal authoritarianism.
Institutional Investors and Indian Markets
Aug 1st 2018, C.P. Chandrasekhar and Jayati Ghosh
In these uncertain times, equity markets in India seemed to be protected from extreme volatility. But the factors behind such resilience could also result in sudden stops.
The State of the Economy
Jul 23rd 2018, Prabhat Patnaik
The Indian Economy is facing remarkable combination of stagnation, inflation and a burgeoning trade deficit which has been erroneously attributed to the rise in oil prices alone.
Did Developing Countries Really Recover from the Global Crisis?
Jul 17th 2018, C.P. Chandrasekhar and Jayati Ghosh
A decade after the Global Financial Crisis, developing countries still bear the scars in the form of lower growth and lower investment rates.
A Legacy of Vulnerability
Jul 12th 2018, C.P. Chandrasekhar and Jayati Ghosh
Outstanding foreign bank claims that accumulated during the post-crisis period of easy and cheap credit are a source of vulnerability in the new environment.
The Indiscreet Aggression of the Bourgeoisie
Jul 4th 2018, C.P. Chandrasekhar
The financial crisis and a subsequent period of recession affecting the majority population in economies points to the fact that neoliberal economic policy might have lost its legitimacy. On the contrast, a change in mood with Brexit and Trump's victory might not be subsequent setbacks with a new aggression on part of the neoliberal elite. Today, across the world, big business is attempting to influence economic decision-making in ways that can save the neoliberal project from collapse.
The Push for Privatizing Banks
Jun 11th 2018, Prabhat Patnaik
Historically, the push for bank privatization which has gathered momentum with a rising tendencies to take to neo-liberal policies. The arguments for privatization have been put forward time and time again, depending on economic circumstances. As international finance capital demands outright privatization to control financial resources and popularizes the conception of social interest best served through free finance, the NPA crisis in India has become the justification today.
The Return of a Housing Bubble
May 8th 2018, C.P. Chandrasekhar and Jayati Ghosh
While household balance sheets are not rid of the debt accumulated in the years preceding the 2008 crisis, there are signs that purchases financed with new debt are leading to a fresh bubble in property markets.
Plurality in Teaching Macroeconomics
Apr 18th 2018, Rohit Azad
For vibrant policymaking, an open-minded academic engagement between contrasting viewpoints is needed in macroeconomic education. However, there does not even exist a textbook that contrasts these contesting ideas in a tractable manner. This pedagogical paper is an attempt to plug that gap by presenting a comparative study across different traditions in macroeconomics in a unified framework, which can be developed into a semester-long intermediate-level course.
Market Fever and its Aftermath
Mar 13th 2018, C.P. Chandrasekhar and Jayati Ghosh
As fears of a market downturn cloud sentiment, the factors that led up to the bull run and their implications need to be studied and learnt from.
When Business Turns 'Easy'
Feb 28th 2018, C.P. Chandrasekhar
The Modi/Choksi case illustrates how a neoliberal financial policy regime that is aggressively "reformist" creates conditions that make the system vulnerable to fraud and corruption on a huge scale.
Can Banking Recover?
Feb 27th 2018, Jayati Ghosh
Recovery of the banking sector will require stricter adherence to sound banking rules and more transparency from public and private players. And most of all, this applies to the regulators themselves and the government that frames all this.
The Economic Survey 2017-18
Feb 4th 2018, Prabhat Patnaik
Like the person on the proverbial tiger, the Indian economy is currently riding a precarious course. The Government of India’s Economic Survey for 2017-18 recognizes this frankly, but its panacea is to keep one’s fingers crossed and hope that the ride continues.
The 2018-19 Union Budget
Feb 3rd 2018, Prabhat Patnaik

The strategy of the current budget seems to be simple: make immense noise about “helping the victimized” but do not give an extra paisa from the budget towards that ends. With the expenditure squeeze being carried out to reduce fiscal deficit, the share of central government spending in GDP is in fact budgeted to fall.

Where’s the Money, Mr Jaitley?
Feb 2nd 2018, Jayati Ghosh
This government is especially good at optics, at managing public perceptions to persuade people that it is working for them, rather than doing so. So it is no surprise that Arun Jaitley’s pre-election Budget Speech went on about how much his government cares for the people, the poor, for farmers, for women, for people running small and micro enterprises, and so on.
Budget 2018-19: No money where the mouth is
Feb 2nd 201, C.P. Chandrasekhar
Billed as the last full budget of this second NDA government, Budget 2018 was not expected to surprise. Its primary thrust had to be a show of concern for the large mass of the deprived in India, with some focus on the agricultural sector which by all accounts has been neglected and allowed to languish over the last four years.
Did the FM Deliver for Farmers?
Feb 2nd 2018, Jayati Ghosh

For those with short memories, let’s remind ourselves that Arun Jaitley has been promising “top priority to farmers” for a while now.

Window Dressing Budgetary Figures
Jan 31st 2018, C.P. Chandrasekhar
Budget 2018-19 will feature a window dressed Revised Estimate to ensure that the fiscal deficit is on target. The government’s decision to sell its stake in HPCL to ONGC is only one more step in that direction.
Public Banks: Dressing up for the market
Jan 22nd 2018, C.P. Chandrasekhar
The government's ambitious plan to recapitalise public sector banks that have recorded losses with resources from the Budget is an attempt to dress them up before taking them to the market.
The other Face of Private Banking
Jan 16th 2018, 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.
A Year of Wilful Economic Disaster
Jan 8th 2018, Prabhat Patnaik
The uniqueness of 2017 lies in the fact that never before has the country seen a government-caused economic crisis as serious as was witnessed in this year.
The Demise of Bank Credit
Jan 2nd 2018, C.P. Chandrasekhar and Jayati Ghosh
Growing economies generally show increasing deployment of bank credit – but in India this has been decreasing for years and recently has been almost flat. What does this suggest about the growth process and the health of the Indian economy?
The Indian Economy in 2017
Jan 2nd 2018, 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.
A Dangerous Bill on Banks
Dec 22nd 2017, Prabhat Patnaik
The BJP government, it appears, cannot remain content without inflicting irreparable damage on the institutions of the Indian economy. Its latest move in this direction is the Financial Resolution and Deposit Insurance (FRDI) Bill which was introduced in parliament on the last day of the winter session and is now with a Select Committee.
Making Merry on Bitcoin
Dec 22nd 2017, C.P. Chandrasekhar
Bitcoin has left the world of finance gasping. Though the total market value of all of that cryptocurrency in circulation is only a fraction of the value of the world's financial assets, the rapid rise in the value of the currency has made it the most wanted of those assets.
The Dollar Drain
Dec 19th 2017, C.P. Chandrasekhar and Jayati Ghosh
A recent spike in the volume of foreign exchange outflows under the Liberalised Remittance Scheme suggests that India is vulnerable to large scale capital flight, if economic uncertainty increases.
Indian IT hits a Speed Bump
Nov 21st 2017, 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.
Moody’s Upgrade
Nov 20th 2017,Prabhat Patnaik
The slight upgrade of India’s credit worthiness by Moody, that equates finance with nation, is being celebrated by the media as a mark of Modi’s success, but the criteria it has used to judge are in actuality open assaults by the government on the working population. To transcend such neo-liberal capitalism, the wrongness of this criteria must be understood first.
Engineering a New Crisis
Nov16th 2017, C.P. Chandrasekhar
Central banks are deciding to scale back their policy of "quantitative easing" in the form of liquidity infusion through asset purchases, but they are unwilling to commit to a quick unwinding of balance sheets fearing market reaction to a radical change in the easy money environment.
Monitoring the Evolution of Latin American Economies using a Flow-of-funds Framework
Nov 9th 2017, Esteban Peez Caldentey and Manuel Cruz Luzuriaga
Flow-of-funds accounting permits to monitor the financial sector in terms of flows and stocks and to analyze its relationship with the real sector. Traditionally practised in developed nations, this accounting has not experienced a parallel development in developing countries. In order to fill this gap, the paper undertakes the construction of a data base of flow-of-funds account matrices for various Latin American and Asian countries, exemplifying their use for the study of financial crisis in these regions.
The Slide of an Aging Leader
Oct 26th 2017, C.P. Chandrasekhar
The recent acquisition of TTSL by Airtel indicates the deep-seated problems of mismanagement and debt-ridden books of the Tata group, which was once a frontrunner among business conglomerates but is now, only a shadow of its former glorious self.
Create a Crisis and make it Worse
Oct 12th 2017, C.P. Chandrasekhar
The government's proposal to set up an all-powerful entity to solve the NPA problem has serious implications for banks and could leave them vulnerable to, among other things, runs by depositors.
Mixed Signals from the External Sector
Sep 28th 2017, C.P. Chandrasekhar
Large capital inflows have boosted foreign exchange reserves and resulted in the rupee strengthening. Although exports have not done badly, the widening trade deficit owing to a rise in the import bill can worsen the current account position and create a vicious circle.
A Bull in a China Shop
Sep 26th 2017, Prabhat Patnaik
The BJP government, through demonetization and GST, coupled with the world economic situation, it is causing a rare co-occurrence of three phenomena: a stagnation of the countrys' economy, a revival of inflation, and a yawning current account deficit on the balance of payments. As the era of cheap money in the U.S. and elsewhere come to an end, Indian assets might pass into foreign hands.
The Emerging Crisis in Real Estate
Sep 26th 2017, C.P. Chandrasekhar and Jayati Ghosh
The slow down and partial crisis in India's real estate sector reflects the challenges facing post-reform growth in India.
Foreign Investor Appetite
Sep 14th 2017, 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.
The Truth About Demonetization
Sep 1st 2017, Prabhat Patnaik
The recent RBI report that shows that 99% of the demonetized currency notes have been returned proves false the governments’ claim that the scheme, that shook the whole economy, would cripple the black economy, an argument whose success lay in the demonetized currency not coming back to the system. Moreover, with re-monetization complete, there has been no "flushing out" of black money whatsoever.
Twenty Years after the Asian Financial Crisis
Aug 7th 2017, Prabhat Patnaik
It was the free flow of foreign capital through "financial liberalization" that led to the East Asian Crisis of 1997, from which the "tiger economies" have not yet recovered fully. Even now, the augmented foreign reserves of these third world countries remain woefully inadequate to finance debt to foreigners, as the hegemony of international finance capital builds over their own assets.
'Riskless Capitalism' in India: Bank credit and economic activity
Aug 7th 2017, Rohit Azad, Prasenjit Bose and Zico Dasgupta
The Indian growth story of the 2000s' cannot be over-simplistically explained as a result of "market-oriented" reforms. Public sector bank credit-financed investments, particularly in the infrastructure sector, played a significant role in sustaining growth, most crucially after the global economic crisis. Such a growth trajectory, however, proved to be unsustainable with the expansionary phase coming to an end in 2011–12 and bad loans piling up in the banking system.
NPAs: All talk and no action
Aug 4th 2017, C.P. Chandrasekhar
The problem of large NPAs of nationalised banks can be traced to the neoliberal reforms in the financial sector and outside, which prevent large government investments in infrastructure and capital-intensive industries that are imperative for development but too difficult a responsibility for the private sector to shoulder.
Growth in the Time of a Credit Squeeze
Aug 1st 2017, 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.
Justice in the Age of Finance
Jul 7th 2017, C.P. Chandrasekhar
The very limited Barclays prosecution comes in the wake of a half-hearted investigation effort, which has thus far completely let off all those who took the world economy to the verge of a crisis akin to the Great Depression. It is not clear if anything will finally come out of even this case, which is aimed at merely teaching a lesson to those who hurt a bunch of financial investors by violating insider rules.
Imperialism Still Alive and Kicking: An interview with Prabhat Patnaik
Jun 20th 2017, C. J. Polychroniou
Imperialism is the arrangement that the capitalist system sets up for imposing income deflation on the working population of the third world for countering the threat of inflation that would otherwise erode the value of money in the metropolis and make the system unviable. A delinking from globalization by an alternative State, based on a worker-peasant alliance, is required for improved living conditions of the third world working population.
The GDP Elephant
Jun 6th 2017, Jayati Ghosh
National income is hard to estimate in India where so much activity and employment is in the informal sector. Much of GDP calculation is not purely "technocratic" but relies on judgments and assumptions. As long as our system of national accounting does not clarify the real impact on the economy and the actual degree of deceleration of economic activity, we will remain in the dark.
The Unsustainable US Recovery
Jun 6th 2017, C.P. Chandrasekhar and Jayati Ghosh
Even the limited and unsteady recovery of growth in the US a decade after the 2008 crisis is based on an increase in debt that renders it unsustainable.
World Capitalist Crisis getting Accentuated
May 22nd 2017, Prabhat Patnaik
After a brief illusion of recovery in the U.S., the world economic crisis is getting accentuated. Trump administration would rather increase its fiscal deficit, if at all it does, through tax cuts than state expenditure under the hegemony of finance capital. This might further suppress consumption expenditure, already constricted by falling global wages. Such policies, paired with hostile protectionism, would make correcting over-production and hence overcoming world crisis, almost impossible.
The De-digitisation of India
Apr 25th 2017, C.P. Chandrasekhar and Jayati Ghosh
Despite the government's efforts to digitise the Indian economy forcibly, non-cash forms of payment appear to have declined as more currency has been made available to the public. This points to major flaws in the government's coercive approach and the underlying rationale for cashlessness.
The State in Chinese Banking
Apr 11th 2017, C.P. Chandrasekhar and Jayati Ghosh
After four decades of financial reform China's banking sector is still dominated by publicly owned institutions. But continuity in ownership does not mean that banking behaviour does not change.
Bad Bank Proposal for India
Mar 15th 2017, T Sabri Öncü
The author's bad bank proposal for India would be capitalised with zero coupon perpetual bonds the government would issue and would give the country some breathing time so that she can attack and tackle all her other problems.
Budget 2017-18: Blinded by neoliberalism
Feb 27th 2017, C.P. Chandrasekhar
All that this government has is its unfounded belief that mere reform in the form of the demonetisation, digitalisation and the GST would deliver growth rather than recession.
Is it India's Subprime?
Feb 14th 2017, Rohit Azad
By presenting a comprehensive picture of the current corporate debt crisis in India, the author cautions that the situation is very similar to the one that led to the US subprime crisis.
China's Capital Flight Syndrome
Jan 30th 2017, C.P. Chandrasekhar
The sudden collapse in reserves due to an outflow of capital in a country that was considered the favoured destination for FDI points towards the fact that China is now paying the price for the capital account liberalisation measures adopted with its entry into the WTO.
Waning Stimuli
Jan 17th 2017, C.P. Chandrasekhar and Jayati Ghosh
Banks strapped with stressed assets are holding back on lending, dampening in the process the principal stimulus to growth in recent years. And there are no alternative routes to growth in sight.
The Utter Failure of Demonetization: The RBI says so even as it says not
Dec 29th 2016. Surajit Mazumdar
From the figure of the value of fresh banknotes issued by banks by 19 December, it can be concluded that we are still very far away from the full replacement of the cash withdrawn from circulation and the severe cash shortage is going to continue well beyond 30 December.
Banks as Victims
Dec 17th 2016. C.P. Chandrasekhar
The damage to the reputation of banks and its employees, which and who have been victims of the engineered cash shortage, is likely to be aggravated by the adverse effects the demonetisation may have for the already damaged profit and loss accounts and balance sheets of the banks.
Demonetisation and Banks' Lending Rates
Dec 12th 2016 .Prabhat Patnaik
The linking of demonetisation with a fall in banks’ lending rates is illogical and just a false propaganda of the ruling party to mislead people.
Demonetization as the Basis for a Fiscal Stimulus
Dec 7th 2016. Prabhat Patnaik
What the BJP spokespersons are putting forward that the cash which gets disabled in the black economy would enable the government to spend more on infrastructure or provide cash transfers to the people is sheer deception.
Demonetization as a Means of Fighting "Black Money"
Dec 6th 2016. Prabhat Patnaik
It is very obvious by now that demonetization, far from being an attack on the black economy, has in effect turned out to be an attack on the vulnerable informal segment of the white economy.
Finance Capital and the Nature of Capitalism in India Today
Nov 25th 2016, C.P. Chandrasekhar
This article explains how the growing dependence on foreign finance capital has distorted India's growth. Due to the accumulated presence of foreign capital in the country since liberalisation, it is turning moribund and losing sovereignty.
Demonetisation: All pain for the majority
Nov 23rd 2016. C.P. Chandrasekhar
The way the political establishment, sundry pundits, the media and a large section of the untutored or sycophantic elite of the country underestimated the extent of pain that the demonetisation measure would inflict on India's poor and lower middle classes, points to their disconnect from a reality which bears little resemblance to the vision of a dynamic market economy they presume they inhabit.
Demonetisation and its Discontents
Nov 23rd 2016. Arjun Jayadev
The demonetisation decree is pure fantasy-on all fronts and absolves everyone of the need to think about the myriad ways in which the collective project of Indian society has been corroded. It has a malign edge that has not been adequately acknowledged yet.
Demonetisation was Primarily a Political Act
Nov 22nd 2016. Jayati Ghosh
It is becoming evident by the day that the primary purpose of the surprise announcement by the Prime Minister was political rather than economic, and that this political purpose was specifically directed towards ensuring the fortunes of the ruling party vis-à-vis its rivals.
Demonetisation: Illusory Gains, Enduring Damages
Nov 18th 2016. Arindam Banerjee
The depressive economic cycle that has been immediately generated by the demonetisation measure will not be mitigated within a few months as the government mistakenly assumes. It will have longer and deeper consequences for inequality and under-development in the Indian economy.
The Chimera of a 'Cashless' Economy
Nov 18th 2016. Prabhat Patnaik
In its attempt of moving towards a cashless economy, when the government is forcing people to do so through the demonetisation exercise it is an act of sheer authoritarianism that is no less reprehensible than an attack on people's civil liberties.
It's the Private Debt, Stupid!
Nov 15th 2016, T Sabri Öncü
The global debt of the non-financial sector has reached an all-time high in 2015 and two-thirds of this debt, amounting to about $100 trillion, consists of liabilities of the private sector.
The Political Economy of Demonetising High Value Notes
Nov 15th 2016, Jayati Ghosh
The November 8 announcement by the Prime Minister is an ill-conceived and even more poorly executed move that appears to be an attempt by the government to display a lot of sound and fury, but signifying very little.
Demonetization of Currency Notes
Nov 10th 2016, Prabhat Patnaik
The argument, that the demonetization of 500 and 1000 rupee notes constitutes an attack on "black money", is based on an utter lack of understanding of the nature of "black money", a conception of it that is staggering in its simple-mindedness.
The Hegemony of Finance
Oct 19th 2016, C.P. Chandrasekhar
Finance has been able to successfully stall reforms that the 2008-09 crisis had established as being urgent and imperative, and the consequences of that are bound to be damaging.
Revving Up the Bond Market
Sep 12th 2016, C.P. Chandrasekhar
The new measures announced by the RBI aim at making the conservative institutional investors more bond-savvy and the bond market an important source for long term capital but in the process household savings would be exposed to increased risk.
An Overburdened Instrument
Sep 7th 2016, C.P. Chandrasekhar
The interest rate that is seen as being the principal instrument for macroeconomic management is proving to be a blunt tool when combatting inflation or promoting growth.
Unexpected Inflation
Sep 2nd 2016, C.P. Chandrasekhar and Jayati Ghosh
The return of inflation, even if moderate, at a time when India is experiencing a normal monsoon and after a long period of inflation-targeted monetary policy is surprising.
The Business of Wilful Default
Aug 3rd 2016, C.P. Chandrasekhar
Adventurous lending followed by wilful default that has become more common in recent years, is linked to the change in banking practices and the pursuit of quick profits after liberalization.
The Return to Retail Lendinge
Aug 2nd 2016, C.P. Chandrasekhar and Jayati Ghosh
After having retreated from retail lending in the years since 2005-06, banks burdened by NPAs in areas like infrastructure seem to be returning to the retail market. How far can this go?
The Real Banking Problem
Jul 12th 2016, C.P. Chandrasekhar and Jayati Ghosh
Recognizing bad assets and writing them off may not resolve the banking problem, since the new financial order requires banks to lend to those who seem more prone to default.
Bad Loans, Lending Behaviour and Growth
Jun 7th 2016, C.P. Chandrasekhar and Jayati Ghosh
As interested observers focus on the bad loans, accumulating in the books of India’s commercial banks, the implications it has for lending behaviour and growth are less explored.
And Now, Price Deflation in India and China?
May 31st 2016, C.P. Chandrasekhar and Jayati Ghosh
While it was presumed the developing world, especially the more prominent emerging markets, were less prone to price deflation, data from China and India show trends of declining producer prices.
The Phenomenon of Negative Interest Rates
Apr 21st 2016, Prabhat Patnaik
Even the unconventional measure of charging negative interest rates, as the author says, is unlikely to end the recession because capitalism today is in a deep structural crisis.
Banks and the New Asian Tigers
Mar 30th 2016, C.P. Chandrasekhar
Substantial accumulation of bad debt in the domestic banking systems of India and China seems to be proving too heavy a burden to bear when the good times are disappearing.
Budget 2016-17: Signs of paralysis
Mar 16th 2015, C.P. Chandrasekhar
The divergence between the rhetoric and the actual allocations in the Budget 2016-17 depicts the ruling party's inability to use the fiscal lever to push for growth and welfare.
Interest Rate Conundrum
Mar 15th 2016, C.P. Chandrasekhar and Jayati Ghosh
With interest rates and bond yields turning negative in many developed countries, the efficacy of monetary policy as a countercyclical instrument is in question.
The IMF in Pakistan
Feb 18th 2016, C.P. Chandrasekhar
While presenting a positive picture of the Pakistan economy the IMF conceals the fact that Pakistan's role as an on-and-off strategic partner of the US has undermined its ability to find an independently funded growth strategy.
Is the Rupee "Weakening"?
Jan 19th 2016, C.P. Chandrasekhar and Jayati Ghosh
While much concern being expressed about the weakening rupee, it is not the past record that is the problem; rather, its likely direction in the near future is a cause for worry.
IDBI Bank: The door to denationalisation
Jan 4th 2016, C.P. Chandrasekhar
The decision to privatise IDBI Bank is the beginning of a larger process of denationalisation of banking in India that would lead to exclusionary banking structure most unsuited to India's development needs.
Stock Market: Does patience pay
Dec 28 th 2015, C.P. Chandrasekhar and Jayati Ghosh
The perception that investors looking for above average returns can turn to the stock market so long as they are willing to stay invested for extended periods doesn't hold.
Interesting Turn Around
Oct 14th 2015, C.P. Chandrasekhar
The recent rate cut by the RBI reflects a shift in its policy stance and signals that it has accepted that the biggest threat in India today is not inflation, but deflation.
The Retail Investor as Anchor
Oct 6th 2015, C.P. Chandrasekhar
A pullout by FIIs underlies the market decline is broadly agreed upon, but that the decline would have been much greater but for a contrary entry of retail investors is less commented on.
Mutual Fund Mystery
Sep 29th 2015, C.P. Chandrasekhar and Jayati Ghosh
Underlying a recent surge in assets managed by mutual funds is a revival of retail investor interest in equity at a time when foreign institutional investors are turning bearish.
Assessing a Volatile Market
Sep 11th 2015, C.P. Chandrasekhar and Jayati Ghosh
Increased volatility in the Indian stock and debt markets and its consequences, question whether these markets, as structured now, deliver positive net economic benefits.
The Devaluation of the Yuan
Sep 8th 2015, Prabhat Patnaik
With the depreciation in the Chinese yuan, the world economy in all probability is going to face a deflation and a "debt-deflation" syndrome.
The Future of Public Banking
Aug 21st 2015, C.P. Chandrasekhar
The objective underlying the revival of the recapitalisation of public sector banks is privatisation, which would seriously impact India's infrastructure development programme.
China's RenMinBi Strategys
Aug 18th 2015, C.P. Chandrasekhar and Jayati Ghosh
The sudden depreciation of Chinese currency, that has impacted global markets, may be an attempt to revive export growth and provide stimulus to growth to the flagging economy.
Black Notes in the Stock Market
Aug 17th 2015, C.P. Chandrasekhar
Even though SIT strongly recommends that PNs should be phased out if they cannot be made more transparent, they are unlikely to be banned as the government fears investor exit.
China's Troubled Stock Markets
Aug 4th 2015, C.P. Chandrasekhar and Jayati Ghosh
The boom bust cycles in China's stock markets question the government's view that there is much to be gained from deregulating them.
China's Stock Market Collapse
Jul 22nd 2015, Jayati Ghosh
The negative impacts of China's stock market collapse, falling exports and the explosion of debt are not just felt within the economy but across the globe.
Great Dream of Prosperity
Jul 21st 2015, C.P. Chandrasekhar
The emphasis on the latest GDP growth numbers, when the figures from other indicators point to the opposite, may be the government’s only option to show that all is well.
Economic Forecasts and Reality: Should we believe the World Bank?
Jun 23rd 2015, C.P. Chandrasekhar and Jayati Ghosh
The World Bank's latest projections for GDP growth are pessimistic, especially for developing countries. But given its poor track record, how far they are reliable is doubtful.
When Will the Next Financial Crisis Start?
Jun 15th 2015, T. Sabri Öncü
The global financial crisis that started in 2007 has never ended and now there are warnings of a looming market liquidity crisis, but when this will hit remains to be seen.
Is the Bull Run Over?
May 8th 2015, C.P. Chandrasekhar
Downturn in financial market is inevitable, but the fact that a host of investors driven by the herd instinct live in denial complicates matters and worsens the outcome.
Indian Exceptionalism
Apr 15th 2015, C.P. Chandrasekhar and Jayati Ghosh
Official satisfaction with the decision by Moody's to raise India's sovereign rating may be ignoring the possibility that the agency missed an important source of vulnerability.
Recapitalising India's Public Sector Banks
Mar 24th 2015, C.P. Chandrasekhar and Jayati Ghosh
The push to recapitalise public sector banks by raising capital through equity issues, on the grounds that Basel III needs make it unavoidable, may be a route to privatisation.
Statistical Jugglery, Reverse Redistribution and Corporate Absolutism
Mar 13th 2015, Amiya Kumar Bagchi
Statistical jugglery practised by the government in order to please big investors and the bid to privatise important public sector units need to be resisted at all costs.
Greece, its International Creditors and the Euro
Feb 20th 2015, Sabri Oncu
The Greece crisis resolution depends on whether the EU sees itself as a progressive project based on liberal market principles or as an imperialist project of finance capital.
Households and India's Stock Markets
Feb 17th 2015, C.P. Chandrasekhar and Jayati Ghosh
Whilst India's stock markets touch dizzying heights, households are withdrawing from the market as they are influenced more by returns registered in short periods.
Asian Banks in Trouble
Jan 2nd 2015,, C.P. Chandrasekhar
Emerging market economies in Asia are confronted with signs of bank fragility owing to overexposure to the private sector, whose mounting external debt compounds the problem.
Debt in Asian Vulnerability
Nov 25th 2014, C.P. Chandrasekhar and Jayati Ghosh
Amidst stock market euphoria, the growing international debt exposure of certain Asian countries, particularly Hong Kong, China and India, is a matter of major concern.
Wooing the NRI Depositor
Nov 7th 2014, C.P. Chandrasekhar
The significant spike in the inflows into NRI deposits in 2013-14 has been caused by different policy shifts of the central bank.
The Herd Instinct at Work?
Sep 26th 2014, C.P. Chandrasekhar
The SENSEX is driven by herd instinct of FII inflow coming with assumptions which are at best speculative; the trend may get reversed in case of a rise in the interest rate.
Passing the Buck
Sep 19th 2014, C.P. Chandrasekhar
Instead of looking at developed countries' monetary easing, the RBI should explore policy alternatives to restrict capital inflow and reduce India's external vulnerability.
The Bond Rush in Indian Markets
Sep 9th 2014, C.P. Chandrasekhar and Jayati Ghosh
The government's incentives to foreign investors have resulted in a sharp rise in FPI investments in India's debt market that does impose costs on the nation.
Banking with a Difference
Aug 12th 2014, C.P. Chandrasekhar
Democratic forces in BRICS and other countries have to ensure that the BRICS bank acts differently from existing development banks to be a true alternative as expected.
Money, Debt, and Deficit
Jul 30th 2014, Arnab K. Chowdhury
As debt is necessary to sustain the monetary system, hypothetical repayment of all debts can make the monetary system collapse and has the capacity to stall the real economy.
BRICS Gains Currency in Brazil
Jul 25th 2014, Biswajit Dhar
BRICS is poised to make a mark in the global economic governance, if the NDB and the CRA turn into credible financial institutions – as counterparts of the existing structure.
The BRICS Bank: Part of a new financial architecture (2)
Jul 25th 2014, Oscar Ugarteche
Given that the BRICS countries all have first tier development banks implies that they also have development bankers who can bring their expertise to the New Development Bank.
The BRICS Bank: Part of a new financial architecture (1)
Jul 25th 2014, Oscar Ugarteche
The BRICS Bank would be less vulnerable if it used non dollar denominated bonds similar to those established by the World Bank in the 1980's.
The Budget and BJP's Economic Policy
Jul 25th 2014, C.P. Chandrasekhar
The Union Budget for 2014-15 is a deflationary budget in the name of "fiscal consolidation," and chalks out a strategy to make India a labour-intensive manufacturing hub.
Corporate Karza Maafi at Rs. 36.5 Trillion
Jul 21st 2014, P. Sainath
Since 2005-06 a cumulative amount of Rs. 36.5 trillion has been given away to corporate sector in terms of various sops in corporate income tax, excise duty and customs duty.
The Rise and Fall of the Global South
Jul 21st 2014, Prabhat Patnaik
The south that was supposedly rising is now witnessing a fall and this can be prevented only if the domestic market is expanded through egalitarian measures of redistribution.
Locking Out Financial Regulation
Jun 25th 2014, C.P. Chandrasekhar and Jayati Ghosh
The proposed deal on trade in financial services that has just been exposed by Wikileaks has serious implications even for countries that are not involved in the negotiations.
Who is Afraid of Illicit Finance?
Jun 16th 2014, C.P. Chandrasekhar
NDA government's move to appoint an SIT to bring back illegal money from abroad brought more complex issues of finance and government's real intention to the foreground.
The Rupee's Climb
May 23rd 2014, C.P. Chandrasekhar
A surge of capital inflow appreciated the rupee while the RBI is not keen to intervene due to inflation implications. Rupee may stabilise or start depreciating again later.
Stock Market Boom amidst Economic Crisis
May 19th 2014, Prabhat Patnaik
The stock market boom, within a slowdown in the economy, serves the interest of the finance capital, and the crisis cannot be addressed because the boom has to be sustained.
Pre-election Euphoria?
Apr 15th 2014, C.P. Chandrasekhar
The recent surge in the Sensex despite sagging performance of the overall economy reflects selective speculation by international finance which makes it more volatile.
Financial Strains in the "New" China
Apr 9th 2014, C.P. Chandrasekhar
Growing corporate debt and recent reporting of default raise questions on an impending crisis as the financial liberalisation process creates greater volatility in China.
The Next Internet Bust?
Mar 18th 2014, C.P. Chandrasekhar
Excess liquidity as part of the crisis solution may well be setting up the next IT bubble with investors speculating on start-ups even without definite revenue roadmaps.
The Sources of Bank Vulnerability
Mar 5th 2014, C.P. Chandrasekhar
Higher NPAs in the public sector banks of India is a consequence of the liberalisation agenda pursued by the government rather than the failure of the bank managers.
No Method in this Confusion
Feb 21st 2014, C.P. Chandrasekhar
The new RBI Governor struggles to maintain stability in the face of the threat of a US tapering even as other countries face turmoil in the absence of control on capital flows.
Public Banks and the Burden of Private Infrastructure Investment
Feb 21st 2014, Jayati Ghosh
The pushing through of private infrastructure projects without due regard to regulatory requirements is unjust, socially disruptive and exposes the economy to financial risks.
Cleaning Up the Old Economy
Feb 12th 2014, C.P. Chandrasekhar
While RBI argues that its recent move aims at preventing counterfeit of currency notes, this can serve as an easy way of converting large volumes of black money into white.
Search for Recovery
Feb 7th 2014, C.P. Chandrasekhar
Although every significant country of the world is still in the midst of growth deceleration, forecasters confidently hold out hopes of a recovery.
The "Remaking" of Indian Banking
Nov 29th 2013, C.P. Chandrasekhar
There is little innovation in the nature of the financial reform that the present RBI governor recommends. These are all proposals that have been unveiled in the past.
The Elusive Recovery
Nov 21st 2013, Prabhat Patnaik
While monetary policies have failed to resolve the current global crisis, resistance to fiscal intervention from finance capital prevents any meaningful solution for recovery.
A New Growth Consensus?
Oct 28th 2013, C.P. Chandrasekhar
Recent measures by the RBI and the government emulate the path of fuelling growth by easy credit for specific sectors but that path is fraught with the risk of bank fragility.
Macroeconomic Vulnerability and the Rupee's Decline
Oct 28th 2013, C.P. Chandrasekhar
The measures adopted by the government to stem the rupee depreciation rather than being a success may well lead India into a crisis.
On the Economics Nobel Prize
Oct 19th 2013, Jayati Ghosh
The Global Financial Crisis notwithstanding, the Economics Nobel Prize shows that the power of finance remains undiminished.
Is the Party Over?
Oct 3rd 2013, Rohit
The article analyses the reasons behind the poor performance of the Indian economy in the recent past and suggests measures for way out of the current crisis.
Those Chinese fears
Oct 1st 2013, C.P. Chandrasekhar and Jayati Ghosh
While speculation of a looming banking crisis in China is not without basis, the fact that its big banks are publicly owned and serve the goals set by the state is ignored.
'Loans First' – Explaining Money Creation by Banks
Sep 30th 2013, Arnab Kumar Chowdhury
In fractional reserve banking, the description of banking as "accepting deposits for lending" distorts the perspective in which economics of banking is perceived and analyzed.
Microfinance and the Challenge of Financial Inclusion for Development
Sep 13th 2013, Jayati Ghosh
The author reviews the effectiveness of microfinance in developing countries by studying the experience of the state of Andhra Pradesh in India.
The Looming Banking Crisis
Sep 4th 2013, C.P. Chandrasekhar and Jayati Ghosh
The crisis engulfing the Indian economy is expected to affect the corporates and the infrastructural projects burdened with large debt, impacting the Indian banking sector.
To Pay or Not to Pay: Vodafone tax imbroglio
Aug 30th 2013, Abhijit Mukhopadhyay
The Vodafone tax case set bad precedent, created panic in the government, induced irrational policy making, and showed the extent of blatant appeasement of foreign investment.
A Speculative Attack on the Rupee?
Aug 29th 2013, C.P. Chandrasekhar
The timing of the rupee's dramatic decline seems to be caused by a spillover of speculation-driven price trends in the currency derivative markets into the rupee spot market.
None of the Experts Saw India's Debt Bubble Coming. Sound familiar?
Aug 27th 2013, Jayati Ghosh
The ongoing slide of the value of the Rupee is an inevitable outcome of the debt-driven consumption bubble based growth model that the country had been pursuing.
Banks and the F-word
Aug 8th 2013, C.P. Chandrasekhar
The rising incidence of bank frauds in India breaks the myth that better accounting standards and stringent disclosure requirements post-liberalisation would discourage fraud.
The Rupee's Decline
Jul 10th 2013, C.P. Chandrasekhar
The continual fall in the rupee indicates that it is time to correct the deterioration of India's balance of payments and reduce the country's dependence on foreign finance.
The Fall of the Rupee
Jul 5th 2013, Prabhat Patnaik
The fall of the Rupee is not due to isolated India-specific factors, but is a fallout of the general characteristic of the core-periphery relationship in capitalism.
The Falling, Falling…Rupee
Jun 28th 2013, Jayati Ghosh
The falling rupee that has an immediate inflationary impact is not the result of global forces or US monetary policy, but of domestic economic mismanagement.
How Private are Public Banks?
Jun 21st 2013, C.P. Chandrasekhar
Rapid dilution of equity ownership in the nationalised banks suggests that India's public banking system is only a short step away from coming under private control.
A Long View of the Rupee
Jun 17th 2013, C.P. Chandrasekhar
The weakness of the rupee is a result of a deterioration of India's economic performance, especially the deterioration of its balance of payments.
Banking as the New Frontier
Jun 14th 2013, C.P. Chandrasekhar and Jayati Ghosh
While liberalisation was expected to encourage Indian financial sector diversification, the actual experience has been different.
The Slow Regress in Banking
Jun 12th 2013, C.P. Chandrasekhar
By issuing new guidelines, the RBI has sought to ring-fence banking activity, to ensure regulatory control and keep the number of new entrants low and their intent clean.
The Neoliberal Trap
Jun 11th 2013, C.P. Chandrasekhar
The government of India is forced to appease international credit rating agencies and give their demands priority over national issues.
Redistributing Regulatory Power
May 21st 2013, C.P. Chandrasekhar
The FSLRC's far-reaching recommendations seek a fundamental redesign of India's historically evolved financial regulatory framework in favour of a liberalised financial sector.
Fragile Foundations: Foreign capital and growth after liberalisation
May 14th 2013, C.P. Chandrasekhar
The shift from debt-financed public expenditure to debt-financed private expenditure-led growth in India has resulted in increased dependence on foreign capital and vulnerability.
Capital Flows and External Vulnerability: Examining the recent trends in India
Apr 29th 2013, Prasenjit Bose
The measures to attract additional debt inflows into the Indian economy to finance its widening current account deficit will only enhance its external vulnerability.
Private Banks and Financial Inclusion
Apr 16th 2013, C.P. Chandrasekhar and Jayati Ghosh
The view that corporate sector's entry into banking will be an instrument to advance financial inclusion is based neither on historical evidence nor on market logic.
The Sensex and the Economy
Apr 8th 2013, C.P. Chandrasekhar
The central bank's cheap credit and easy money policies have helped the Indian stock market to remain reasonably positioned even when the economy sinks.
Bullying Cyprus to No End
Apr 4th 2013, C.P. Chandrasekhar
The highhandedness shown by the troika (EU, ECB and IMF) in the case of Cyprus once again shows how the core in Europe is pushing the costs of adjustment to the periphery.
Is Global Finance Finally Shrinking?
Mar 20th 2013, Jayati Ghosh
Even as the value of global financial assets has fallen sharply since 2007, it may be essential to shrink it further to make the financial system fulfil its basic tasks.
China's Exploding Debt
Mar 12th 2013, C.P. Chandrasekhar
Amidst the ongoing global financial crisis, a potential financial market threat is looming in China which is based on ''shadow banking'' lending to real estate sector.
Ruling out Default by Definition
Feb 22nd 2013, C.P. Chandrasekhar
The loan recovery process initiated by Kingfisher Airlines' lenders at a significant haircut may be not the last instance of large losses to be suffered by the banking system.
No Standards, Not Poor
Feb 20th 2013, C.P. Chandrasekhar
The rising tide of litigation against US credit ratings agencies could help resolve the conflict of interest involved in basing financial regulation on the ratings system.
The Persistent Power of Finance
Jan 23rd 2013, C.P. Chandrasekhar
The recent approval by the SEC of USA to a JP Morgan created ETF backed by physical supply of copper reflects the collusive power of finance capital over regulators till date.
Banking Amendment
Dec 26th 2012, C.P. Chandrasekhar
The Banking Laws (Amendment) Bill will lead to new entry, consolidation and expanded foreign presence in a sector that is the repository of household saving in the country.
FDI in Banking
Nov 19th 2012, C.P. Chandrasekhar
Given that accessing foreign equity to enhance bank's capital is possible within the existing regulatory framework, there is no case for altering the current RBI rules.
How Safe are India's Banks?
Oct 30th 2012, C.P. Chandrasekhar
The NPA figures on the books of the scheduled commercial banks seem to be gross underestimates given the recent debt restructurings involving a number of large borrowers.
Burdening Public Banks with Private Losses
Oct 30th 2012, C.P. Chandrasekhar and Jayati Ghosh
While large bank loans to private investors have been restructured to keep them 'performing', the burden of such financing has fallen disproportionately on public sector banks.
Importing Risk into Insurance
Oct 17th 2012, C.P. Chandrasekhar
The government's decision to increase foreign presence in insurance industry would import practices that would subject the savings of middle classes to increased probability of loss.
The Insensitive Sensex
Oct 15th 2012, C.P. Chandrasekhar and Jayati Ghosh
While growth slows down in India, the only index faring well is the Sensex. The short term speculators armed with central bank's cheap credit and easy money policies have helped it remain high though volatile.
The Parthasarathi Shome Committee Report
Sep 10th 2012, Prabhat Patnaik
The Shome Committee Report has recommended that the introduction of GAAR should be kept in abeyance until April 1, 2016 and that the capital gains tax be done away with altogether. These are all a reflection of the Manmohan Singh government's keenness to legitimise its efforts to start another stock market ''bubble'', which it thinks will stimulate growth by attracting more speculative finance capital into the country.
Financial Convergence in Asia
Sep 5th 2012, C.P. Chandrasekhar and Jayati Ghosh
Even as there are dissimilar financial structures, the recent Asian experience with financial convergence suggests that financial proliferation largely facilitates new lines of business in financial services and affects the real economy more from the demand side by the debt-financed household expenditure it promotes. Thus excessive exposure to retail markets is becoming a source of fragility in these countries just as it did in the developed countries.
Ill Winds from Europe
Aug 8th 2012, C.P. Chandrasekhar and Jayati Ghosh
The crisis intensifies in Europe and threatens to trigger a second global downturn in five years. This time, Asian countries, which weathered the last crisis well, seem less resilient. In fact, the evidence points to many routes to the spread of contagion to Asia.
Another Looming Food Crisis
Jul 25th 2012, C.P. Chandrasekhar and Jayati Ghosh
The possibility of another global food crisis facing the world brings with it questions about what exactly is causing these crazy fluctuations in global food prices. Arguably, it is not changes in the 'real' conditions that are behind these price fluctuations. Rather, it is the role played by rumour, and therefore by the media in altering expectations that can explain, to a large extent, the recent spike in food prices.
Banking on Debt
Jul 10th 2012, C.P. Chandrasekhar and Jayati Ghosh
The latest figures on India's external account reveal that the problem of declining foreign exchange reserves is the result principally of the widening of the current account deficit, which was far too large to be covered by an increase in capital inflows. While the government may do well to address the vulnerability caused by a rising import bill, especially on account of gold imports, it has been adding to external vulnerability by encouraging further inflows of speculative debt capital.
Markets and the Role of Law?
Jul 2nd 2012, Bikku Kuruvila
While law is presented within the dominant policy discourse as a source of transaction costs and bureaucracy, markets simply could not exist without the rigorous enforcement of rules and contracts that allow the much-celebrated moments of ''free exchange'' to proceed with any certainty. In this light, it is very important to look at the political compromises, policy resolutions and distributional consequences created by market-oriented state intervention. To this view, India in 2012 is already largely integrated into the global economy with the growth, volatility and inequality that such integration entails.
India and the Credit Rating Agencies
Jun 26th 2012, Jayati Ghosh
In the recent times, several big international credit rating agencies have downgraded India's rating outlook as a sovereign borrower. The main point however is whether we should at all bother about the "opinions" of these external credit rating agencies. Maybe we would all have been better off without the destabilising influence they have played and continue to play in India and in the rest of the world.
When the Law Takes its Course
Jun 26th 2012, C.P. Chandrasekhar
Rajat Gupta's conviction has been a great disappointment for the neo liberal elites of this country. He was seen as an icon, a living proof, that even a home grown could achieve the highest success in the globalised world. The fact that he has done all this by unscrupulous means is a hard truth to accept. Therefore, it is not surprising that the local media is trying to downplay the whole incident.
India's Growth Story Ends
Jun 6th 2012, C.P. Chandrasekhar
Even when confronted with slowing growth, the Indian government is adopting austerity measures that trap the country in a recession, because of the accumulated presence of foreign finance in the country. The latter not only increases economic instability, but also induces an element of "policy paralysis". Capital controls are a must to give policy manoeuvrability to the government.
Post-Crisis Reform: A lost opportunity?
Apr 3rd 2012, C.P. Chandrasekhar and Jayati Ghosh
In its recently released annual report, the Federal Reserve Bank of Dallas makes a case for breaking up banks considered too big to fail. But the failure to do that is only one possible way in which the opportunity provided by the crisis to reform and regulate finance has been lost.
Mutiny of the Minority Shareholder 
Mar 19th 2012, C.P. Chandrasekhar
In what would be a first for India, a minority foreign investor in a public sector company that had gone in for privatisation, in this case a hedge fund looking for capital gains, has challenged the right of the government to pursue policies it presumes is in the national interest.
The Chinese Way 
Feb 24th 2012, C.P. Chandrasekhar
Although the use of the banking system as a development instrumentality in China has been useful, there are a host of new problems that has cropped up. This would possibly encourage the government to retrace its steps and strike a new path.
We Need a New World Order at the World Bank 
Feb 18th 2012, Jayati Ghosh
For long, the IMF and the World Bank have been zealously controlled by the USA and the European Countries on flimsy grounds. It is high time such practices are changed taking into account the new world realities.
Behind the Fear of Debt
Feb 9th 2012, C.P. Chandrasekhar and Jayati Ghosh
Fears are being expressed in official policy circles that the country's dependence on foreign debt as opposed to foreign investment to finance the external deficit is increasing, leading to specific policy responses. Recently the government has announced a policy allowing direct access of a new group of foreign investors into India's equity markets. Although this measure is defended on the grounds that it would help reduce dependence on debt, its validity is indeed questionable.
Thirst for Foreign Capital
Jan27th 2012, C.P. Chandrasekhar
Concerned about the fall in FII investments and the financing of the growing current account deficit, the government has allowed a new group of foreign investors to invest directly in India's equity markets. To the extent that the measure is successful, it would mark a transition towards allowing greater presence of speculative players in the Indian markets.
The Lurking Debt Problem
Dec 19th 2011, C.P. Chandrasekhar and Jayati Ghosh
Rising interest rates in the domestic market have been encouraging large firms in the Indian corporate sector to resort to foreign borrowing to finance domestic expenditures. In particular, there has been significant rise in the shares of commercial borrowings and short-term debt in total external debt. This tendency is increasing external vulnerability.
Democracy and the Financial Markets
Dec 1st 2011, Jayati Ghosh
In the last few decades, it has become increasingly common for various developing and "emerging" markets to give greater importance to appeasing the interests of financial markets over the requirements of political democracy. Now, this is afflicting developed countries as well, where governments are sacrificing democracy in favour of the markets.
The End of Europe?
Nov 30th 2011, C.P. Chandrasekhar
The crisis in Europe has recently claimed many political victims, with the governments in Greece and Spain, two of the worst hit countries, being changed. The newer governments promise to implement stringent austerity measures that are being proposed as a solution to the crisis. However, how much of austerity can actually be implemented, and what good such measures will do to resolve the crisis is highly doubtful.
European Banks and Asia
Nov 17th 2011, C.P. Chandrasekhar and Jayati Ghosh
European banks are being forced to take a haircut to deal with the region's crisis. Given their greater role in total international funding and the significant exposure of Asian financial systems to global capital, this raises concerns about the likely impact that the European banking crisis would have on Asia.
Protest in the Age of Crises
Nov 2nd 2011, C.P. Chandrasekhar
If the Occupy Wall Street movement is to acquire strength to actually confront the might of finance capital and the state it controls, it must find greater cohesion, with an organisational structure and a programme that goes beyond anger against the capitalist system and the condition to which it has reduced the majority.
What World Leaders Need to Do Urgently (but are not)
Oct 4th 2011, Jayati Ghosh
Global leaders' efforts to control the prevailing anarchy and enable recovery in their economies end up having the opposite effect, because the direction of their macroeconomic policies is all wrong and mobile finance capital is still largely unregulated. Here are five basic steps that world leaders need to take.
Shifting Havens for Capital
Sep 30th 2011, C.P. Chandrasekhar
In parallel with the sudden strengthening of the dollar recently, the value of a whole host of alternative assets has fallen. In the process developing countries that have been the targets of financial investors and those dependent on commodity exports have become particularly vulnerable.
Is China next?
Aug 10th 2011, C.P. Chandrasekhar
While some observers expect a collapse of the property boom in China and a resultant crisis, this seems unlikely to happen because the state, still a major player in China, is responding to the danger in more ways than one.
America's Debt-ceiling Crisis
Aug 4th 2011, Prabhat Patnaik
The compromise between Obama and the Republicans to end the US debt-ceiling crisis has done great damage in terms of a sharp regression in income distribution and a remarkable shift to the Right in the US, as well as an aggravation of the recession in the world economy.
Changing Guard at the IMF?
Jul 6th 2011, Jayati Ghosh
The change of guard at the IMF would not make a difference as long as there is no significant change in the Fund's approach to economic policies. Despite the experience of continually getting it wrong in so many countries over so many decades, the Fund is still persisting in imposing the blatantly counterproductive strategy of fiscal austerity everywhere.
India's Schizophrenic Banks
Jun 29th 2011, C.P. Chandrasekhar and Jayati Ghosh
The release of the third of the Financial Stability Reports being prepared by the RBI provides new information on the state and behaviour of the Indian banking system. While banks appear well capitalised and their balance sheets robust, at the margin they seem to be embracing too much risk.
International Banks in Emerging Markets
Jun 2nd 2011, C.P. Chandrasekhar and Jayati Ghosh
The presence and growth of foreign banks in emerging markets pose important challenges, both for these countries and the international financial system. Yet the debate on banking re-regulation before and after the crisis focuses largely on the experience of the developed countries, ignoring the implications of developments in the emerging economies.
Revisiting Financial Reform
Apr 8th 2011, C.P. Chandrasekhar
India is doing away with specialised development banking institutions on the grounds that equity and bond markets would finance industrial development. This is bound to lead to a shortfall in finance for long-term investments, especially for medium and small enterprises. The experience of countries such as Brazil, which has thus far not opted for this trajectory, may be educative.
Teaser Mania
Feb 9th 2011, C.P. Chandrasekhar
The Reserve Bank of India's advice to banks to withdraw loans offered with teaser interest rates comes as a precautionary measure to avoid any crisis of the sub-prime type as India remains prone to such crises. Substantial retail lending by Indian banks using teaser rate loans, especially to the housing market, has led to this apprehension.
Going after the Little Guys
Jan 13th 2011, Jayati Ghosh
In order to control their large volume of non-performing assets (most of which are loans made to large corporate houses), several commercial banks in India are selling off their small NPA accounts to private players at a large discount. By doing so, the banks are indirectly putting great pressure on the small scale producers, the middle class families and other similar groups for repayment instead of the large defaulters.
Corruption in the Age of Liberalisation
Dec 3rd 2010, C.P. Chandrasekhar
Liberalisation does not mean that the state withdraws from intervention, but merely that there is a change in the form of state intervention that also enables the state to deliver illegitimate gains to individuals and private players. During the phase of liberalisation in India too, the state seems to be turning into an important site for primitive accumulation for the private sector.
Market Madness Again
Oct 11th 2010, C.P. Chandrasekhar
The signals emanating from the highest economic policy making quarters have helped talk up the Indian market, allowing equity prices to outrace earnings and fundamentals that has resulted in the current speculative boom that seems similar to the bubble that burst not so long ago. This signals that it is time the government regulates and limits the capital inflows.
Ignoring Asset Price Inflation
Sep 22nd 2010, C.P. Chandrasekhar and Jayati Ghosh
The spike in stock prices and the strengthening of the rupee are signals that it is time the government acted to regulate the capital flows that are generating these speculative trends. But while the government and the central bank are responding to inflation in the prices of goods, they are choosing to ignore the much sharper inflation in asset prices.
Money Illusion
Jun17th 2010, C.P. Chandrasekhar
The perception created by the spectrum auction that there is much money in government coffers to pursue a social agenda is an illusion for two reasons. First, whatever money appears to be at hand is not available in the long term. Second, the new receipts from the private sector that create this illusion could be substantially matched by reduced government receipts in other areas or reverse flows to the private sector.
National FDI Concepts: Implications for investment negotiations
Jun 4th 2010, Smitha Francis

Free trade agreements and bilateral investment treaties make privileges for and treatment of foreign direct investors legally binding. Thus, apart from the concerns of being able to capture the ''real'' financial and economic contribution of foreign direct investment inflows, FDI definitions are also about protecting the ''rights'' of the so-defined investors in the host country. Keeping this in mind, the article analyses India's current FDI policy and warns that if we define FDI within our national regulatory framework too broadly to allow instruments and flexibility that were earlier resisted, we would have already lost most of the leverage in investment negotiations at the regional and multilateral levels.

The Spectre of Public Debt
Apr 21st 2010, C.P. Chandrasekhar
The sovereign debt crisis of Greece has led to appeals for a reduction in the size of public debt in countries worldwide. Given that increasing taxes and reducing expenditures may not be considered viable options, there would soon be strident calls for disinvestment and privatisation aimed at generating the resources needed for this.
What Small Government Means
Mar 1st 2010, C.P. Chandrasekhar
Against the backdrop of the debt ‘crisis' in Greece and growing cries around fiscal "profligacy", this article argues that those demanding austerity of governments that have built up large fiscal deficits and accumulated debt, are not ideologically committed to minimal government. The so-called "backlash" against the state is a demand for governance of a particular kind, that favours the already well endowed at the expense of those who have not shared in the benefits of development.
FDI and the Balance of Payments in the 2000s
Mar 10th 2010, C.P. Chandrasekhar and Jayati Ghosh
The most quoted indicator of the success of economic reform is the noticeable rise in the inflow of foreign direct investment during the last decade and a half. However, the available Indian evidence on the performance of foreign direct investment companies suggests that their balance of payments consequences are adverse.
Financial Euphoria and Aftershock
Feb 24th 2010, Jayati Ghosh
John Kenneth Galbraith's analysis of the capitalist economy in the delightfully written tract ''A Short History of Financial Euphoria'' remains as relevant today as it was then. However, unlike what Galbraith offers, the solution to capitalism's proneness to recurrent bouts of speculation has to go beyond capitalist markets and profit motivation.
The WTO as Barrier to Financial Regulation
Feb 8th 2010, Jayati Ghosh
Many of the financial regulatory proposals now being considered by developed countries might not be feasible given the legally binding commitments these countries have made under GATS with respect to financial services liberalisation. Such WTO rules may therefore get ignored or GATS may require to be renegotiated, for the necessary financial sector reforms to take place.
Are we Heading for Another Global Primary Commodity Price Surge?
Jan 13th 2010, C.P. Chandrasekhar and Jayati Ghosh
Following the unprecedented volatility of global commodity prices in 2007-08, it was widely predicted that the global economic crisis would generate a dampening effect on such prices. But the recent revival of prices especially in some commodities suggests that this perception may be premature. Examining recent trends in global commodity prices and the reasons behind them, the article assesses the prospects for prices in the immediate future.
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