Vivek's Commentary

On 20th March, Indian government in their "HISTORICAL DECISION" granted the autonomy to 60 educational institution (5 Central Universities, 21 State Universities, 24 Deemed Universities, 2 Private Universities and 8 Colleges). Source - Public information bureau of India Human Resource Minister Shri Prakash Javadekar said that UGC will have control over the given institutions but these institutions will have freedom to start the new courses, off campus centers, skill-related courses, research parks and other new academic programs. They are free to hire the foreign faculty and enter into academic collaborations. This looks like India will witness the high quality education, India will witness the research based education etc etc. But I don't think so. Anyway we already have 74 autonomous institutions (This doesn't include the institutions and colleges which are grated the partial autonomy or autonomy for specific department.). But still we haven't seen any majo...

There is tremendous reduction in the power of BJP in Gujarat. One can easily say that by just observing the seats won by BJP. But I am going to use some concentration index to show that. In market, Herfindahl-Hirschman Index (HHI) is used to measure the monopoly power. The range of HHI is between 0 and 1. If HHI is 1 then there is monopoly i.e. one firm has absolute power in given market and if HHI is zero then it means no one has control over the market. HHI is calculated by adding the square of market shares of firms. Now I am going to use this HHI index in political economy to measure the concentration of power. After that I will use Effective Number of Political Parties which is proposed by Laakso, M., & Taagepera, R. (1979) to measure the degree of coalition. (Data source – Election Commission of India)  Now let’s see the HHI and ENP.  (Index has been calculated) Let me explain the trends. Here HHI is reduced from 0.48 to 0.29 in last 15 years. ...

Rather go to bed without dinner than to rise in debt. - Benjamin Franklin   We are going to bed without dinner but still debt is rising. Our outstanding liability is around 67% of total GDP. Fiscal deficit at the end of August was around 96% of the budget estimate for 2017-18. Then one important question arises – ‘Are we moving towards 1991?’ Let’s see..  (Source - Data from Reserve Bank of India is used for calculation) Fiscal deficit is obviously very high. For this time, I am taking absolute figure (not in percentage). Both states and central fiscal deficit is very higher than 1990s Fiscal deficit. Total outstanding liability is rapidly increasing and very high compare to 1991. Revenue deficit is also higher than 1991 in absolute terms.  (Source - Data from Reserve Bank of India is used for calculation)  So does it mean we are very close to crisis? Let’s see another side of picture.. Foreign reserves are increasing and ...

Our system - of debt-fueled economic growth, of ineffective democracy, of overloading planet Earth - is eating itself alive - Paul Gilding. Forget about debt-fueled ECONOMIC GROWTH, few Indian states have only growth in their OUTSTANDING LIABILITIES. We talk too much about outstanding liabilities and Fiscal Deficit of Central government. But we can’t ignore the financial health of Indian states. Andhra Pradesh is continuously borrowing from markets. West Bengal is new competitor for Andhra Pradesh. One might say that revenue deficit or fiscal deficit is under control or government is taking serious steps to control their deficits. But these deficit can't be financed by borrowing. If it is a case then we should start thinking about outstanding liabilities of Indian states. (Source -  Reserve Bank of India - Handbook of Statistics on Indian States.  To make it simple, data selection is restricted to 2013 as Telangana state is created in 2014 and Andhra Pradesh is ve...

Maratha community is protesting since last few years. One thing we should appreciate that the protests were peaceful. But I disagree with the concept of this protest. My relatives and friends who are part of this silent protest march might not like this opinion but this is what I think.  In democracy everyone has right to protest. I am not against any protest march. Everyone should express his/her disagreements. People from Maratha community are also suffering from problems like poverty, unemployment etc. These problems come regardless your caste. (But what about social discrimination? In Maharashtra, (so called progressive state) we have seen honor killings. Right now I don’t want to get into this and I won’t talk about caste discrimination). But certain things are difficult to understand. One thing which I observe is that the name of Chhatrapati Shivaji Maharaj has been used intensively. Protestors were saying that Chhatrapati Shivaji Maharaj was their ancestral. It shows t...

Last year, we had a good discussion over agriculture and its future. I always thought that the credit flow in Indian agricultural market is not enough. Agricultural sector in India is continuously facing insufficient credit delivery (Godara, R. L., Singh, P., & Singla, S. (2014).). Authors also point out that the Indian banking system is not willing to give any king of credit to farmers especially small and marginal. Therefore government must encourage the credit delivery as credit is very important. In India, proper agricultural credit supply is badly required for agricultural production (Das, A., Senapati, M., & John, J. (2009)). By using Panel Data Analysis, authors show that there is an immediate, significant and positive impact of direct agricultural credit on agricultural output. Indirect agricultural credit has also positive and significant impact on agricultural output but the effect is not immediate. Credit has also positive impact on use of inputs in agriculture (Na...

Long-term unemployment can make any worker progressively less employable even after the economy strengthens - Janet Yellen.  Economy is growing rapidly, FDI is surging but where is Capital? Where are jobs and how can we create jobs without capital?? With business friendly policies, government is doing everything to have large FDI. Okay, let’s discuss some papers related to FDI and Economic growth.  As far as capital is concerned, FDI is very important which is connected with job creation (Chowdhury, A., & Mavrotas, G. (2005). FDI and growth: a causal relationship (No. 2005/25). Research Paper, UNU-WIDER, United Nations University (UNU)). With two way link between FDI and GDP, India is becoming a favored destination for FDI. FDI is increasing with increasing GDP. GDP is not increased by FDI but this causality runs more from GDP to FDI (Chakraborty, C., & Basu, P. (2002). Foreign direct investment and growth in India: A cointegration approach. Applied economics...