For all those who swear by current macro-economic theory and the rules generated from there in policy making should read Buiter..

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High fiscal deficit woes

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Elections have been announced and it is almost a ritual to take stock of the performance of the out going government. I also thought of performing this ritual through this blog site. I will not comment so much on the fiscal imprudence that has been exhibited by the government in the last one year even before it could hold out an alibi of the global financial crisis. Talking to some experts who may be a bit on the right side of economic ideology spectrum one is inclined to believe that the government was lucky when it came in and piggybacked on an average growth rate of 8 percent. However, it did not carry out substantial reforms to put India at a different level of growth. Till last year it was flush with funds and all the fiscal indicators looked good but not so now and many of the flagship schemes of the UPA like the NREGA and loan melas (oops! waivers) have squeezed the fiscal purse with not much deliverance though. This may spell big trouble in the years to come given that it will be some while before the crisis relents. Here I discuss the performance of the UPA in the area of bijli with sadak and communications to follow. (more…)

There is a difference between the branded and unbranded segments and their potential during growth slowdown (more…)

The growth story continues albeit at a lower level.  (more…)