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Wanted: a new social contract between business and politics

GDP growth in the January-March quarter slumped to 5.3%, the lowest for nine years. The quarterly debacle dragged down annual GDP growth to 6.5% in 2011-12, lower even than the 6.9% achieved in the great recession year of 2008-09. Sundry businessmen have urged the government to come out with a revival package. Sorry, but the More >

Tax exemptions: it’s not just the fat cats who benefit

While discussing higher petrol prices, TV anchor Arnab Goswami asked why the middle class shouldn’t get a big petrol subsidy when corporations got tax breaks of Rs 529,000 crore. He got this huge figure from an annual budget document calculating “revenue foregone” through various tax exemptions and exceptions. The left has long decried this “revenue More >

Both democracy and capitalism give the freedom to choose between alternatives

In March, I accepted a daunting assignment: to lecture college students in Pune on The Morality of Capitalism. Predictably, this produced many sniggers. Capitalists are crooks, I was told. They milk you for all they can get. They cheat you in a thousand ways. Banias are notorious for using ‘fixed’ weighing scales and adulterating goods More >

Falling rupee: a kick in the pants for Congress

Will the crash of the rupee to a record low of Rs 54.68 per dollar be a “kick in the pants”, to quote economist Arvind Subramanian, that finally forces the government to slash unwarranted subsidies and deepen reforms? Hopefully yes. But Rohini Malkani of Citibank says, after a US visit, that foreign investors view the More >

European voter revolt bodes ill for India

The future of the Eurozone (comprising 17 European countries using the euro as their currency) is in doubt after voters in Greece and France threw out incumbents struggling to save the euro through supposed austerity measures. Socialist leader Francois Hollande won in France by promising economic growth, not austerity. In Greece, the top two parties More >

Indians haven’t learnt to think strategically in terms of foreign policy

The late K Subrahmanyam, celebrated defence analyst, said the Indian government seemed incapable of strategic thinking. Perhaps intellectuals outside the government are no better. This has to be the verdict on an ambitious attempt by some of India’s finest thinkers, backed by the National Defence College and Centre for Policy Research , to enunciate a More >

Brain drain or not, the right to emigrate is fundamental

Socialists like health minister Ghulam Nabi Azad won’t admit it, but they rather liked the Berlin Wall. They think it’s morally right to keep citizens captive at home, unable to migrate for better prospects. Azad has proposed not a brick wall but a financial one: he wants all doctors going to the US for higher More >

June is the right time for tough reforms

Policy paralysis has costs. Standard and Poor’s has cut India’s credit outlook to negative and warned of a one-in-three chance of a downgrade to junk status within the next 24 months. S&P cites the slowing economy, deteriorating balance of payments and out-of-control fiscal deficits. India’s problems are eminently solvable. But the government is so lacking More >

Right to Education Act threatens education

In analysing the Supreme Court judgment upholding the Right to Education (RTE) Act, television channels have focused too much on the 25% reservation of seats in private schools – including famous elite schools – for low-income children. This minor social engineering has produced some ridiculous protests from the elite. Yet, equally ridiculous is the claim More >

Should India stop paying attention to the BRICS group, a sinking ship?

India has just a 50% chance of becoming a breakout nation (exceeding expectations of 7% GDP growth) in coming years. So says Morgan Stanley honcho Ruchir Sharma in a fascinating new book, Breakout Nations. There is no better book for country-by-country accounts of emerging markets (and riskier ones called frontier markets). Its strong point is More >

Making a breakout nation

India has just a 50% chance of becoming a breakout nation (exceeding expectations of 7% GDP growth) in coming years. So says Morgan Stanley honcho Ruchir Sharma in a fascinating new book, Breakout Nations. There is no better book for country-by-country accounts of emerging markets (and riskier ones called frontier markets). Its strong point is More >

Why India will beat China

Extractive political institutions (autocracy and empire) lead to extractive economies benefiting elites, and cannot create general prosperity save for limited periods. Inclusive political institutions (democracy, rule of law and rights for all) create inclusive economic regimes with opportunity for all, leading ultimately to prosperity. Inclusive institutions lead to creative destruction, which is essential for sustained More >

Supreme court says auction natural resources. Water too?

Most political parties and media have passionately supported the Supreme Court ruling in the 2G spectrum case, that the government should auction natural resources and not allot them or allow unregulated extraction (as in iron ore mining). The Comptroller and Auditor General has fuelled this public passion by estimating huge losses to the exchequer through More >

Coalgate: what about losses caused by Left Front?

The comptroller and auditor general has estimated that the government lost Rs 10.7 lakh crore by allotting coal blocks in 2004-09 instead of auctioning them. The government has contested the estimate as well as methodology of the CAG, and says allocations were normal practice for decades. The CAG has admitted that its estimate is very More >

Rapid GDP growth- best antidote for poverty

Rapid GDP growth is the best antidote for poverty. That is the big message that comes blaring out of the poverty data for 2009-10. Record GDP growth of 8.5% per year between 2004-05 and 2009-10 has reduced poverty at a record rate of 1.5 percentage points per year, double the 0.7 percentage points per year More >