An autonomous research institute under the Ministry of Finance


Demand, supply and growth slowdowns


For India to complete its development transformation, a switch to a broad-based and more inclusive composition of domestic demand is of the first importance
There is an ongoing debate about whether the current slowdown reflects a demand- or supply-constrained economy. Analytically, this question is pertinent when a slowdown is ...

Minimum Wage Macroeconomics


The government has taken several policy initiatives to address the current economic slowdown. These important and necessary measures to ameliorate the slowdown have addressed 1) sentiment, 2) the credit pipeline, 3) policy misinterpretations and 4) sector specific issues.  However, if, as I have been arguing, the roots of the ...

Fiscal policy and the growth slowdown


The question then is: On what should government spend this extra borrowing?
Several economists have recently argued for increasing public expenditure, through deficit financing, to address the current growth slowdown. This argument rests on the premise that increased government spending would enhance purchasing power in the hands of consumers ...

Coherent set of immediate actions


The government must announce a calendar for implementation of Friday's measures
I have been concerned about some macro-solutions proposed to address the slowdown. Calls for fiscal stimulus are misplaced and would, without much sustained benefit, jeopardise the hard-earned macroeconomic stability attained since 2014. Monetary and credit policy transmission needs ...

Paying Attention to Tax Buoyancy


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(Coauthored with Lekha Chakraborty) 
Often, fiscal stimulus is launched through the tax side than expenditure side, assuming that the buoyancy of the former will ensure minimum fiscal slippage, while shoving the economy out of a glut. The general idea is that a reduction in rates will increase the ...