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Good-bye Chindia, Hello Chimerica

Some years ago, Jairam Ramesh coined the word Chindia, hyphenating China and India, to denote a great new geopolitical development. The earlier BRIC report had identified China and India as potentially the two fastest growing states that could one day rival the US in GDP. China had by 1990 emerged as the world’s manufacturing champion. More >

Nuclear deal: India is becoming sanctions-proof

The manifestos of the BJP and Communist Party (Marxist) accuse the Congress Party of bartering away India’s security in the nuclear deal with the US. They worry that India will be dragooned into signing other treaties that limit its nuclear options, and open it to nuclear sanctions if it ever tests a bomb again. This More >

Can SDRs replace dollars as the world reserve currency?

World leaders at the G -20 meeting agreed to create new international money worth $ 250 billion. The IMF will oversee the new money called SDRs (Special Drawing Rights). Some people believe–and China fervently hopes—that SDRs will in due course replace the dollar as the main world reserve currency. I, however, am a sceptic. I More >

Honest Abe and Sharif Manmohan

2009 marks the 200th birth anniversary of Abraham Lincoln, and also the end of Manmohan Singh’s term as Prime Minister. Both ended office with awesome reputations as honest men in highly corrupt eras. Lincoln was nicknamed Honest Abe. Singh has been called sharif Manmohan. Yet critics have accused both Lincoln and Singh of being hypocrites More >

What’s wrong with 6% GDP growth?

Five years (2003-08) of near-9% growth suddenly seems a distant memory. The CSO estimated GDP growth in October-December 2008 at just 5.3%. Indeed, the IMF estimates that India will average just 5.1% growth in the calendar year 2009. There is much gloom and doom in the stock market, which has now fallen below its October-November More >

US system lousy, rivals lousier

As the world sinks into the worst recession since the 1930s, leaders of the top 20 countries are meeting in Britain to discuss major reforms of the world economic system. There is a consensus that the existing system has failed massively, especially in the US. The five biggest investment banks in the world (Lehman Brothers More >

India slumps, Bharat rises, Congress smiles

For decades, voters have thrown out virtually every incumbent government in New Delhi. Going by history, the current incumbent—the UPA coalition headed by the Congress Party—should be heading for a thrashing, the more so because of the economic slowdown. GDP growth decelerated sharply to 5.3% in the October-December quarter, down from 8.9% in the same More >

Learn to live with recession

Indian politicians and citizens are mostly in denial about the impact of the global meltdown on India. Politicians make brave statements laughing away the slowdown, saying India will be least hit and first out of the slump. Three stimulus packages in three months have been announced with fanfare. But the slowdown continues. Impatient citizens and More >

Obama Plan: recreating a rotten system

India cannot grow fast again till the US economy recovers. And US recovery depends on reviving the housing sector, whence the downswing began. Alas, the Obama Plan for housing is a crutch, not a cure. Putting all the blame on insufficient regulation and overpaid, greedy lenders cannot rectify the structural flaws of US housing. Equally More >

Pakistan needs a Beant Singh

Islamabad’s surrender to the Taliban in Swat is terrible news. A moribund Islamabad cannot stop Islamic terrorists from attacking India even if it wants to. It is another matter that Pakistan has long nurtured groups like the Lashkar-e-Toiba to target Kashmir. Pakistan is now learning what India learned in the 1980s–you can be devoured by More >

Kelkar’s $ 500 billion revolution

We are on the verge of a revolution worth half a trillion dollars. After almost a decade of effort, India is about to move to a unified Goods and Services Tax (GST) to replace the current plethora of central and state indirect taxes. The Empowered Committee of State Finance Ministers is giving finishing touches to More >

High forex reserves can worsen recession

High foreign exchange reserves have, in the current global recession, saved Asian countries (including India) from the travails they suffered in the Asian financial crisis of 1997-2000. So, they must aim for rising forex reserves in future too, right? Wrong. In truth, high Asian forex reserves are an important reason for the current recession. High More >

Beware: Recession May Be Hayekian

Governments across the globe are using Keynesian stimuli to revive drooping economies. Even George Bush has presided over the greatest stimuli in US history, with a projected fiscal deficit of $ 1.2 trillion and monetary injection of almost $ 2 trillion by the Fed. But is the recession Keynesian? Trillions of dollars of stimuli have More >

Is Uttar Pradesh about to take off?

India may have become a miracle economy since 2003, but its largest state, Uttar Pradesh, remains mired in poverty and slow growth. Many people despair of progress in this slough of despond. Yet let me stick my neck out and say that UP is on the verge of economic take-off. I base this prediction on More >

Gloomy news from Neemrana

Government spokesmen claim that, after dipping in 2008-09, the economy will accelerate again next year. But some of the world’s top economists opined at last week’s Neemrana seminar that the global economy might get worse rather than better in 2009, affecting India too. Analysts thought initially that the global recession would end by mid-2009. After More >