India Education Fact of the Day

World Bank asks 'Did you know that 98% of children in India now have a school within 1 km walking distance?

You call this education? A government school in Lucknow

Expenditure Tracking in India

The connection between release of funds by the Central Government and actual expenditures for physical inputs by the implementing agencies is
currently, very obscure

We highly recommend the Report of the Technology Advisory Group for Unique Projects, the chapter on Expenditure Information Network.

Recent Reports - Indian Government

Report of the Technology Advisory Group for Unique Projects

Public Debt Management


Report of the Working Group on Foreign Investment in India

Outcome Budget

India's Independent Evaluation Office

The Union Cabinet today approved the establishment of an Independent Evaluation Office (IEO) to undertake impartial and objective assessment of the various public programmes and improve the effectiveness of public interventions. This is in pursuance of the Presidential address to the Joint Session of both Houses of Parliament in June, 2009 to establish an Independent Evaluation Office at an arms' distance from the Government to assess the outcomes and impact of the major flagship programmes of the Government of India.

The IEO will be an independent office attached to the Planning Commission under a Governing Board chaired by the Deputy Chairman, Planning Commission. It will be funded by the Planning Commission and will have, as its head, a full-time Director General (DG) in the rank and status of Member, Planning Commission. It will have full functional autonomy to discharge its functions. The IEO will also advise the Planning Commission and the implementing agencies in developing appropriate management systems consistent with the evaluation objectives.

Quote of the Day- On the Quality of Budget Speeches

The budget speech was additionally turned into a management tool by Yashwant Sinha. Every sentence of the budget speech is put into a spreadsheet, responsibility for implementation is assigned, and quarterly reports are produced about progress of implementation. Through this, the budget speech has become the workplan of government for the year. What gets announced in the budget speech tends to get done. Few things get done in the year other than what is announced in the budget speech.

- Ajah Shah, Which type of budget speech is this?

Assorted on Privatization

Privatization- Zombie Economics (John Quiggin)

Shri Vijay Kelkar,Chairman, Finance Commission spoke on the topic ‘On Strategies for Disinvestment and Privatisation’

Another Practitioner- Rakesh Mohan's Eichengreen challenge

Monetary Policy in a Globalized Economy- A Practitioner's View

Rakesh Mohan

Ashok Mody review;

In a recent comment, Barry Eichengreen (2009) says that economists are subject to fads and trends because the penalties for departing from social norms are large. Hence, even though the tools and perspectives to question the prevailing normative view are available, the incentives to adopt them are minimal...

Rakesh Mohan sees such pragmatism as the key role of a practising economist. It is in the practice of economics that the rubber, so to speak, hits the road, the theories are tested, the validity of parameters is assessed, and the cold reality of politics is faced. He speaks of the recurring conflicts in objectives faced by policymakers. In resolving these conflicts, he questions and prods, often pushing back on views widely held by academic and other practising economists. In his practice, Mohan reports, the Eichengreen challenge was always present. But because the risk of being marginalised is high, bucking the orthodoxy requires clarity of perspective and determined persistence. Both of these are amply in view in this book, which brings the speeches Mohan delivered as deputy governor of the Reserve Bank of India (RBI) from the early years of this decade, along with an extensive introduction and an “after word” that reports on the ongoing global financial and economic crisis...

For students of the Indian economy who also seek a special understanding of India’s monetary and financial policies, this book will be an invaluable guide. It presents a careful and current account of developments with an analytical eye, placed in the context and language of ongoing international policy debates. For readers seeking to assess the pulse and rhythm of India’s ginger steps from the safety of domestic finance to the choppier waters of international finance, the book offers a calibrated prognosis.

Winners of the Indian Election!

India's massive general election

World Economic Prospects -World Bank

World Bank: Global Economic Update

View more presentations from worldbank.

South Asia (SAR) has been marked down to 3.7 percent growth for 2009 from 5.4 percent anticipated earlier—and down from 5.6 percent registered in 2008. Though terms of trade have moved in favor of the region with the falloff in oil prices, weakening demand in export markets (including burgeoning Indo-Sino trade) is being felt sharply, as is a tempering of services exports from India’s high-tech centers, as capital spending wanes globally. Remittances are anticipated to ease as conditions in host countries falter, albeit with some lag. Capital inflows have diminished, contributing to falloff in investment growth, notably in India. Fiscal support for slowing economies may face constraints in already quite high budget deficits.

External financing requirements for developing countries as a group are anticipated to increase to $1.3 trillion in 2009, comprised of current account deficits ($330 billion) and principal repayments on private debt coming due ($970 billion). With a decline in capital flows to developing countries underway, this would generate an estimated financing gap of between $270-$700 billion, depending on the size of roll-over risks and the magnitude of capital flight. Regions with the largest funding gaps are Europe and Central Asia, Latin America, and Sub-Saharan Africa. In the current projections, 84 of 109 developing countries would face financing gaps, in most cases too large to cover by drawing down reserves alone. This suggests that in the absence of sufficient international support, countries could be forced into generating a sharp reversal in current account balance, implying further decline in domestic demand and imports.

Debates regarding the possible “shape” of recovery from the current downturn continue. But there is little question that the outlook for 2010 in particular, is surrounded by extreme uncertainty across a wide array of policy- and other variables that will eventually bring about a revival in economic activity. The pronounced cycle in worldwide investment could have sufficient dynamic to carry global growth back to positive territory by 2010, as the pace of decline in investment moderates, and postponed demand for durable consumer goods begins to catch up. Together with the effects of monetary and fiscal stimulus this results in the modest global recovery in the baseline forecast presented here.

However, continued banking problems or even new waves of tension in financial markets could lead to stagnation in global GDP or even to another year of decline in 2010. In all cases, the estimated output gap1 would increase in 2010 because (in the baseline as well), growth falls well short of potential (figure 1.e). This implies that unemployment and fiscal deficits will increase further into 2010, in high-income and developing countries alike, while disinflationary conditions could persist well into the year.

World Economic Prospects 2009

Why Good Economics Works for Everyone

A View from the Outside; Why Good Economics Works for Everyone, by Minister P. Chidambaram

Back to Basics in SOE reform

Turnaround Of Indian Railways

Indian Railways is the worlds largest employer and one of the biggest and busiest rail networks in the world, carrying some 17 million people and more than one million tonnes of freight daily. It was, however, until very recently, a loss-making organisation heading for bankruptcy. Starting his term in 2004 with a budget of just $200 million with which to save the national institution, Indian Railways Minister, Lalu Prasad engineered a dramatic turnaround. In 2007, Indian Railways revenues amounted to $6 billion. This impressive success story has also been featured in the textbooks of prestigious academic institutes worldwide as a case study. Minister Lalu Prasad is a key ally of India's governing coalition led by the Congress party. He was also the former Chief Minister of the state of Bihar which his Rashtriya Janata Dal party governed for 13 years until 2005.

Imagining India

The Daily Show With Jon Stewart	M - Th 11p / 10c
Nandan Nilekani
comedycentral.com
Daily Show Full Episodes Important Things w/ Demetri Martin Political Humor

Month of birth and children's health in India

A recent working paper from World Bank-Month of birth and children's health in India

Summary: The authors use data from three waves of the India National Family Health Survey to explore the relationship between the month of birth and the health outcomes of young children in India. They find that children born during the monsoon months have lower anthropometric scores compared with children born during the fall and winter months. The authors propose and test four hypotheses that could explain such a correlation. The results emphasize the importance of seasonal variations in affecting environmental conditions at the time of birth and determining the health outcomes of young children in India. Policy interventions that affect these conditions could effectively impact the health and achievement of these children, in a manner similar to nutrition and micronutrient supplementation programs.

Book recommendation on India

Regional Growth Dynamics in India in the Post-Economic Reform Period
Biswa Swarup Misra

BISWA SWARUP MISRA heads the Department of Economic Analysis and Policy at the Patna office of the Reserve Bank of India. He was an Economist at the Union Bank of India from 2001-2002. He is a core team member in Reserve Bank's research reports and resource person for policy documents. He has published in Banca D'Italia's Conference Volume of Workshop on Public Finance, Reserve Bank's Occasional Papers, the Journal of Quantitative Economics, and the Indian Economic Journal.

The Anti-Greenspan

But there was also another factor, perhaps the most important of all. India had a bank regulator who was the anti-Greenspan. His name was Dr. V. Y. Reddy, and he was the governor of the Reserve Bank of India. Seventy percent of the banking system in India is nationalized, so a strong regulator is critical, since any banking scandal amounts to a national political scandal as well. And in the irascible Mr. Reddy, who took office in 2003 and stepped down this past September, it had exactly the right man in the right job at the right time.

“He basically believed that if bankers were given the opportunity to sin, they would sin,” said one banker who asked not to be named because, well, there’s not much percentage in getting on the wrong side of the Reserve Bank of India. For all the bankers’ talk about their higher lending standards, the truth is that Mr. Reddy made them even more stringent during the bubble.

Unlike Alan Greenspan, who didn’t believe it was his job to even point out bubbles, much less try to deflate them, Mr. Reddy saw his job as making sure Indian banks did not get too caught up in the bubble mentality. About two years ago, he started sensing that real estate, in particular, had entered bubble territory. One of the first moves he made was to ban the use of bank loans for the purchase of raw land, which was skyrocketing. Only when the developer was about to commence building could the bank get involved — and then only to make construction loans. (Guess who wound up financing the land purchases? United States private equity and hedge funds, of course!)

Then, as securitizations and derivatives gained increasing prominence in the world’s financial system, the Reserve Bank of India sharply curtailed their use in the country. When Mr. Reddy saw American banks setting up off-balance-sheet vehicles to hide debt, he essentially banned them in India. As a result, banks in India wound up holding onto the loans they made to customers. On the one hand, this meant they made fewer loans than their American counterparts because they couldn’t sell off the loans to Wall Street in securitizations. On the other hand, it meant they still had the incentive — as American banks did not — to see those loans paid back.

Seeing inflation on the horizon, Mr. Reddy pushed interest rates up to more than 20 percent, which of course dampened the housing frenzy. He increased risk weightings on commercial buildings and shopping mall construction, doubling the amount of capital banks were required to hold in reserve in case things went awry. He made banks put aside extra capital for every loan they made. In effect, Mr. Reddy was creating liquidity even before there was a global liquidity crisis.

Did India’s bankers stand up to applaud Mr. Reddy as he was making these moves? Of course not. They were naturally furious, just as American bankers would have been if Mr. Greenspan had been more active. Their regulator was holding them back, constraining their growth! Mr. Parekh told me that while he had been saying for some time that Indian real estate was in bubble territory, he was still unhappy with the rules imposed by Mr. Reddy. “We were critical of the central bank,” he said. “We thought these were harsh measures.”

-How India Avoided a Crisis

India and Africa

Mittal, Sanjiv Ahuja, Dr Mohamed Ibrahim

India book recommendation

Imagining India: Ideas for the new century, Nandan Nilekani

Sea of Poppies

Sea of Poppies: A Novel
by Amitav Ghosh

Book recommendations

Bubbles in Credit and Currency: How Hot Markets Cool Down
by Brendan Brown

The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy
by George Cooper

India's Financial Markets: An Insider's Guide to How the Markets Work (Elsevier and IIT Stuart Center for Financial Markets Press)
by Ajay Shah , Susan Thomas , Michael Gorham

Books by Indian Finance Ministers

Confessions of a Swadeshi Reformer: My Years as Finance Minister
by Yashwant Sinha


A View from the Outside: Why Good Economics Works for Everyone
P. Chidambaram
Here is a podcast of a discussion on the book at SNU

Do the readers know any books by former finance ministers from other countries?