Bruce Riedel has a great story in the National Interest about the 1962 India-China war and its aftermath.Nitin Pai in the Business Standard on how to better manage immigration into India.The adventures faced in running household surveys in India.I have written earlier about the new world of intense competition for the top two Indian financial products: Nifty and rupee. A big step up in competition against the NSE Nifty options has begun, against a serious and heavyweight rival.Palak Shah, in the Business Standard, describes...
Tuesday, 31 July 2012
Tuesday, 24 July 2012
Egregious Indian protectionism against trade in services
Posted on 12:03 by Unknown
For many decades, India was one of the most protectionist countries in the world. This did great damage to growth and knowledge in India. Tariffs dropped from ridiculous levels to ridiculous levels in the early 1990s and then got stuck there. Yashwant Sinha, as Finance Minister, initiated a remarkable program of cutting the peak rate by five percentage points every year. This worked very well: It steadily got rates down and also gave a roadmap to...
Monday, 23 July 2012
The disaster at Maruti
Posted on 10:28 by Unknown

The news from Maruti is disgusting. I have been curiously watching how the stock market takes it in:That Maruti has serious labour problems has been known for a long time. But the brutality that unfolded in recent days was out of the world. It was news. When I read about it on Thursday, it seemed to me that Maruti was facing a Tata Motors style situation: of suffering the fixed cost of closing down the existing plant and relocating...
Posted in GDP growth, geography, inflation, labour market, legal system, public goods, socialism, the firm
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Saturday, 21 July 2012
The two escape routes away from domestic formal-sector finance
Posted on 11:46 by Unknown
Three problems afflict formal-sector finance in India today: capital controls, taxation, and financial policy. The most important financial products traded in the formal sector in India -- the stock market index (Nifty) and the exchange rate (the rupee) -- are under enormous pressure as a consequence.One dimension, that has been emphasised in the existing discussions, is the flight to offshore markets. There is another: the trade goes off into underground markets. These come in two kinds. In the field of commodity futures, it appears...
Friday, 13 July 2012
Attitudes and beliefs in India
Posted on 09:56 by Unknown

We generally know remarkably little about what the people of India feel and think. Politicians have an interest in emphasising ideological biases. Systematic surveys about attitudes and beliefs are generally not taking place. Under these conditions, I find it useful to take whatever scraps of evidence one can get from efforts rooted outside India which are measuring attitudes and beliefs in India.One important institution working on these things...
Thursday, 12 July 2012
Important step backwards for pension reforms in India
Posted on 19:53 by Unknown
In the best of times, consumers do badly in personal financial decisions. Here is a stark example of what goes wrong. Mark Hulbert wrote in the New York Times, about research by Choi, Laibson and Madrian, 2010:MANY index funds track the Standard & Poor's 500, but they differ from one another in one major respect: their fees. You'd think that it would be obvious to investors to pick the fund that charges the least. But you'd be wrong.In fact, this truth was anything but obvious to a group of elite students. In an elaborate simulation created...
Saturday, 7 July 2012
The glacial pace of change: QFI edition
Posted on 23:27 by Unknown
In the Percy Mistry report, there are some striking examples of the inability of the Indian policy process to deliver change at a reasonable pace. See: Box 9.2, page 127 (index futures); Box 9.3, page 128 (CDO); Box 9.4, page 128 (Gold ETF), Box 9.5, page 129 (interest rate futures in the US). See a similar chronology for currency futures.Here is another example:First government committe report which talks about QFI: Ministry of Finance Working Group on Financial Flows, chaired by U. K. Sinha, 30 August 2010. First QFI signs up: this month,...
Thursday, 5 July 2012
RBI vision document on payments: An evaluation
Posted on 09:34 by Unknown
by Madhavi Pundit and Suyash Rai.On June 27, RBI published its Payment System Vision Document (2012-15). The document shows RBI's vision and mission for the payment system, and specifies the objectives, approaches and courses of action emanating from the same. It is a laudable step taken by RBI to discuss its plans for payments in India. All regulatory activities, such as banking and capital account liberalisation should have vision documents to similarly show the road map. They bring clarity to market participants, and helps everyone plan better....
Tuesday, 3 July 2012
New moves in regulation of debit card payments
Posted on 12:42 by Unknown
by Viral Shah.The Reserve Bank of India has stepped in to regulate the pricing for debit card transactions. The rationale behind this regulatory change seems to be that lower transaction processing fees paid by merchants will lead to an increase in the adoption of retail electronic payments overall. Issuing banks will have to give up interchange revenue in the short run, but increased transactions will make up for lower fees in the long run....
Sunday, 1 July 2012
Transparency in the LPG subsidy
Posted on 11:45 by Unknown
by ahref="http://ajayshahblog.blogspot.in/2012/01/author-viral-shah.html">ViralShah./aRecently, the Petroleum Minister launched the LPG transparency portals for all three Oil Marketing Companies (OMCs):The Oil Marketing Companies have been constantly leveraging technology to launch various initiatives for offering convenience to their consumers For example, some of them are offering the facility for booking refill cylinders 24x7online through their websites as well as through SMS and IVRS. In continuation of their endeavor to leverage technology...
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