Economy Plunging Headlong into Recession

VOLUME II of the Economic Survey which was brought out by the ministry of finance a few days ago paints an extremely grim picture of the Indian economy. The growth rate of real Gross Value Added (GVA which is the appropriate thing to look at, since the GDP measure includes net indirect taxes and hence does not truly reflect output trends), was 6.6 per cent for 2016-17 as a whole, compared to 7.9 per cent for 2015-16.

On Economic Implications of Restrictions on Cow Slaughter

INDIA’S livestock economy is among the biggest in the world. A ban on cow slaughter would either result in more and more unproductive animals being killed in most unscientific and cruel ways or would entail such a high cost for maintaining unproductive animals that cattle rearing would cease to be a profitable enterprise for farm households. Restrictions being imposed on cow slaughter and the actions of the cow vigilantes would deal a serious blow to the agrarian economy and in particular to the livelihoods of the poor and middle peasants in rural India.

The ‘Magic’ of GST

MUCH hype has surrounded the transition to the Goods and Service Tax (GST regime) which has tended to be elevated to the status of being the magical solution to all of India’s economic problems. Nothing, however, could be further from the truth. Quite independent of the intrinsic merits or demerits of GST compared with the structure of taxes it has replaced, the changeover does not address the fundamental challenges of the Indian economy even in the sphere of taxation.

A Dangerous Analogy

NARENDRA Modi’s attempt to imitate Jawaharlal Nehru by giving a mid-night speech on July 1 at the Central Hall of parliament, while inaugurating the Goods and Services Tax, could perhaps be passed off as a merely laughable idiosyncracy. His equating, or even putting on a parallel footing, a mere tax-reform with the grand historic event of India’s attaining independence, could perhaps be shrugged off as just harmless self-promotion by one who prides himself as the author of the tax-reform.

The Question of Farm-Loan Waiver

THE question of farm-loan waiver that is being demanded by the peasantry is much misunderstood. Such a waiver, it is argued by critics, would vitiate the credit-culture in the country: people would stop repaying loans henceforth in expectation of waivers on them. Since the UPA government had waived farm-loans a few years ago and now again there is a demand for a farm-loan waiver, peasants, they contend, are getting into a habit of not paying loans and demanding periodic waivers instead.

The Slowdown in GDP Growth

WHEN the CSO had released advance estimates of GDP for the October-December quarter of 2016-17, within which demonetisation had occurred, the fact that the economy had still shown a 7 per cent growth rate, had been an occasion for much celebration in government circles. It had been used by the government to argue that, contrary to the claims of the critics, demonetisation had not hurt the economy.