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    Resident Senior Fellow Vivek Dehejia's latest column in Mint on implementing politically difficult economic reforms in India: What, after all, is either left or right in making government function better and better serve its people? What is left or right in ensuring that all Indians, including the poorest, have bank accounts and that every business firm must be regist...
    Mudit Kapoor, Visiting Fellow at IDFC Institute, writes on the large behavioural consquences of demonitisation and how they could create a positive welfare impact. Excerpts below: There is no doubt that such a drastic move is pushing people, primarily those in the informal economy, to open bank accounts and actively use them. This might seem trivial and ...
    India Spend's Abhishek Waghmare interviews Praveen Chakravarty, Visiting Senior Fellow at IDFC Insitute, on demonitisation and it's prospects and perils. Exceprts below: The chaos was inevitable… There were 15 billion notes of 500 rupees and 6 billion notes of 1000 rupees on the 8th of November. On the 9th of November, this became invalid; useless paper. N...
    Shankkar Aiyar, Visiting Fellow at IDFC Institute, asserts that the demonitisation of large currency notes is an opportunity for financial inclusion. Read the full article in The Indian Express  here. Excerpts below: India’s transformation and many revolutions have arrived in the wake of crises. This is one crisis that must not be wasted. The biggest ...

    25 November 2016

    Demystifying Demonetisation

    Montek S. Ahluwalia, in this Livemint article, explains why demonetisation is only a piece of the puzzle to tackle corruption and black money, and is likely to have an adverse effect on GDP and low-end employment. Moreover, Ahluwalia advises several steps to significantly improve the process and impact of outcomes.  What effect has demonetisation had so...
    Niranjan Rajadhyaksha, in this Livemint article, discusses some broad issues that deserve immediate attention in the wake of the currency reform. Shedding light on the economic processes that result from this exogenous shock, Rajadhyaksha cautions against jumping to quick conclusions, but to observe how this decision plays out over a longer period of time. E...
    Praveen Chakravarty, Visiting Senior Fellow, warns of the potential ramifications of simultaneous elections on federalism and voter behaviour. Read the full article in Swarajya here. Excerpts below:  The typical arguments in favour of simultaneous elections are three-fold – it will be more cost efficient, it will reduce ‘policy paraly...

    23 November 2016

    The Forgotten Hero

    Visiting Senior Fellow, Praveen Chakravarty, moderated a panel at the Tata Literature Live, 2016 at the Prithvi Theater in Mumbai on November 20, between authors Sanjaya Baru and Vinay Sitapati, and Former Union Minister of Finance Mr. P. Chidambaram on the legacy of India's 9th Prime Minister Mr. P.V. Narasimha Rao.  Baru and Sitapati laid out a strong case f...
    Shakkar Aiyar, Visiting Fellow at IDFC Institute, advises the government to explore external sources for immediate solutions to mitigate the distress.  To appreciate the anatomy of the cash crisis, consider this. In 2015-16 private consumption expenditure accounted for over half the GDP—for over `80 lakh crore out of `135 lakh crore. Sure. Not all of ...
    Meenaz Munshi, Senior Associate at IDFC Institute, and Sanjay Pulipaka, analyse why this decisive move of demonetisation may force the BJP and regional parties to recalibrate their political strategies.  India’s political discourse was until recently dominated by identity issues such as cow protection, the uniform civil code, and debates on freedom of expr...

    21 November 2016

    The Case for Sound Money

    Vivek Dehejia, Resident Senior Fellow at IDFC Institute, examines whether demonetisation threatens the trust that people have in the legal tender.  ...over the course of history, trust in fiat currency has most often been weakened by erratic and high inflation, and shattered after episodes of hyperinflation. This is a much bigger problem than the one-time we...
    Shankkar Aiyar, Visiting Fellow at IDFC Institute argues that a holistic action plan is required, along with the demonetisation drive to curb black money.  What is black money? It is both the cause and consequence of fault lines in the political economy. It is estimated that black money constitutes over a fifth of the national output. Not all that ...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute writes with James Dean on how Justin Trudeau and Donald Trump may find more common ground and build a productive partnership between Canada and the US, contrary to the popular expectation based on the common narrative. ...Trump has signalled a willingness to pursue the Keystone XL pipelin...

    16 November 2016

    A Return to Reaganomics?

    Vivek Dehejia, Resident Senior Fellow at IDFC Institute writes about likelihood of the US returning to a version of Mundell-Laffer policy mix under Donald Trump.  Early signs suggest that the mere fact of a Trump victory, even before policies are unveiled after his inauguration or even Cabinet choices are confirmed, has increased the market’s sen...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute deconstructs the debate on government's demonetisation move by separating facts from fiction.  First, given that the old 500 and 1,000 rupee notes are being replaced with new 500 and 2,000 rupee notes, what is involved is, in effect, a one time wealth tax on black money...Black money will take a hit, at...
    Vivek Dehejia is quoted in a BBC News article on the macroeconomic impact of scrapping Rs 500 and Rs 1,000 notes by the Indian Government. Dehejia says: India now operates under a monetary policy regime known as inflation targeting. If a portion of the stock of currency in circulation, consisting of currency and demand deposits gets 'burned', metaphorically ...
    Praveen Chakravarty, Visiting Senior Fellow at IDFC Institute explains why introduction of Rs 2,000 rupee note goes against the very grain of demonetisation of high value currency to prevent black money.  "Perhaps the situation of counterfeits and illicit cash was so grave that it needed this ‘shock and awe’ cleansing action which other punitive mea...
    Forbes India features Rajiv Lall, MD and CEO of IDFC Bank. It traces the genesis of IDFC Bank, its growth in the last one year, and its strategy for future expansion.  "In its first year, IDFC Bank has taken more than baby steps. Its moves have been firm and well-calculated, which, if executed well, can bear results in the coming years. But as it expands, the ...
    Association for Democratic Reforms (ADR) on 26 October organised a discussion to explore the possibilities and challenges presented by simultaneous elections. Eminent speakers, including Shri Bhupender Yadav (Member of Parliament, Rajya Sabha), Dr S. Y. Quraishi, former CEC, Prof Sanjay Kumar, Director of Centre for Study of Developing So...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute, argues that free trade need not come with conditions for deeper integration but this is increasingly becoming the case in his latest article in Mint.  Dehejia states that there are important lessons to be learnt from the episode where residents of Wallonia in Belgium made an unsuccessful attemp...
    IDFC Institute Conversation hosted a private discussion with Justice Gautam S. Patel, sitting judge of the High Court of Bombay, and Dr. Harish Narasappa, founding partner of the law firm Samvad Partners and co-founder of DAKSH, for a discussion on "Understanding the State of the Indian Judiciary." The discussion explored issues that...

    1 November 2016

    The $2 Trillion Survey

    The RBI surveys more than 5,000 households every quarter across 18 cities and towns about their short and long-term inflation expectations. Praveen Chakravarty, Visiting Senior Fellow at IDFC Institute investigates to what extent the inflation expectations of the aam aadmi  affect the monetary policy decisions of the RBI. But during the recent...

    1 November 2016

    Ways out of the GST maze

    The Centre has proposed that there be an extra cess on ‘luxury’ goods equivalent to the difference in the current tax rate and the maximum GST rate of 26 per cent. If this is implemented, this would mean six different cess rates on nearly 40 different goods, ultimately leaving us with 10-12 different tax rates in the country. Praveen Chakravarty emphasises why ...
    Shankkar Aiyar, Visiting Fellow at IDFC Institute, deconstructs India's poor performance on World Bank's Ease of Doing Business ranking. Often rankings are dragged down by one or two sectors. The converse seems to be true for India. Ranking in seven of ten parameters are worse than the overall story. Critically, this year, India’s rankings have slid in five of ten s...
    Shankkar Aiyar’s  ‘Accidental India: A History of the Nations Passage Through Crisis and Change’, presents a thought-provoking perspective on the economic and political history of post-independence India. Combining academic rigor with journalistic flair, the book introduces its readers to the history and politics behind the seemingly mysterious process...
    Visiting Fellow,  Shankkar Aiyer, writes in this Firstpost article on the politics and perils of succession plans, in the context of the ongoing crisis in Samajwadi Party and Tata Sons Ltd. Observing astutely as both the situations unfold, Shankkar opines "India's political and corporate world is yet to come to terms with the need for and t...
    Visiting Fellow at IDFC Institute Shankkar Aiyer ,  writes in this New Indian Express article about the floundering approach of Congress party in making itself relevant for the voters. Shankkar writes, "It is scarcely a mystery that the vice-president needs help and advice. The question is: does he seek advice and if so, how does he access it? O...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute, in this Livemint articlespeaks about the recent trend were central banks adopt unconventional monetary policies (UMPs) like the negative nominal interest rate.  Vivek argues that "Negative nominal interest rates not only put enormous strain on the banking and financial system, they penalize ord...
    In this op-ed, IDFC Institute Visiting Fellow Shankkar Aiyar asks important questions on the eye-watering amounts spent by government. "Between them, the Centre and the state governments raise roughly Rs 28.4 lakh in revenue and spend around Rs 37.8 lakh crore every year – that is, Rs 10,370 crore per day or Rs 432 crore per hour. The moot question being asked by ta...
    IDFC Institute Conversations hosted a roundtable with Dr. Milan Vaishnav, Senior Associate in the South Asia Program at the Carnegie Endowment for International Peace, for a discussion on "The Indian Administrative Service Meets Big Data."  Watch Vaishnav's video interview with IDFC Institute's Senior Analyst Ishita Trivedi, below: &...
    Resident Senior Fellow Dr. Vivek Dehejia presented a lecture "Where is India Going?" at the Center of Financial and Monetary Studies at LUISS Guido Carli in Rome, on October 18, 2016. LUISS is one of Italy's leading private universities. The talk focussed on the challenges of improving the doing business climate in India and the new monetary policy regime. The lecture was ...
    The GST Council discusses a four-tier rate structure and agrees on compensation to the loss-incuring states for the first five years of the tax regime. With a peak rate of 26 percent plus cess on ultra-luxury and demerit goods, lower slabs are set at 6, 12 and 18 percent. Read more on Business Standard. ...
    Manish Sabharwal and Ashok Reddy on why India needs a reimagining of the higher education system, and why we need to reflect on the deep connections between education, employment and employability. ...
    IDFC Institute Visting Fellow Shankkar Aiyar writes in the New Indian Express this week about why Whatsapp messages calling for a boycott of Chinese goods are an exercise in fulility. Moolah power is a reality. China’s geopolitical status stems from its economic might. India must strive to match it—align economic security with national security—if...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute, along with economist Pravin Krishna of US' Johns Hopkins University, advocates against India revoking Pakistan's most favoured nation (MFN) status.  India can legitimately claim the moral high ground in fulfilling our WTO obligations while Pakistan does not. Revoking Pakistan’s MFN status would shred this...
    Richard Florida writes about the new Brookings study, Redefining Global Cities. He speaks of a new typology of global cities drivinig the world economy. Globalization might make us feel small in a growing world, but the lessons of urbanization should remind us how much more powerful we can be when we get connected. Together, these 123 global cities power global c...
    This Livemint article talks about the World Bank's Doing Business Report, and how India will need to go beyond rankings to make a tangible difference.  The Indian government has taken great interest in addressing the problems of doing business in the country and improving India’s rank in the World Bank’s “Doing Business” report. One parameter evaluat...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute, writes on the political economy of trade policy in this Livemint article. Dehejia speaks of this issue through his participation in a conference held at Columbia University in New York, organised by economist Jagdish Bhagwati.  They (Krishna, Panagariya and Bhagwati) have focused at...
    Shankkar Aiyar, Visiting Fellow at IDFC Institute writes on the ways in which India deals with national security issues. In reference to the recent surgical strikes across the LoC, Aiyar seeks to explain the surgical strike on sanity by the motor-mouth brigade.  The provocation ostensibly came from propaganda fire from across the LoC. The propaganda mac...
    Renuka Sane, Visiting Fellow at IDFC Institute, highlights why data on reported crime is insufficient to gauge the law and order situation. Crime Victimisation Surveys can step in to fill the gaps by estimating the true law and order experience of people. Do people feel safe in their homes and in public spaces? Do they feel that the police is responsive to their ...
    IDFC Institute Conversations hosted a private roundtable with Mr. Leslie Maasdorp, Vice-President and Chief Financial Officer, New Development Bank, for a discussion on "Are Multilateral Banks Still Fit for Purpose in their Present Form?" The discussion focused on the design principles of the BRICS New Development Bank and probed the areas of the b...
    Vivek Dehejia, Resident Senior Fellow, highlights in this Livemint article how Central Banks are today vested with many more objectives than before. The Tinbergen principle states that a policymaker generally needs at least as many instruments as she has objectives to be successful. The immediate implication for our problem at hand is that to achieve the multiple obje...
    With the Labour Bureau releasing unemployment numbers for 2015-16, Manish Sabharwal, Advisory Board Member at IDFC Institute and Chairman of Teamlease Services, reflects on the debate about India's job growth Interestingly, Sabharwal said underemployment, instead of unemployment, was the right place to look to introduce positive change in employment trends i...
    Levels of income disparity across the big states of India are at an all-time peak. India is currently experiencing a 3-3-3 paradox – the richest three are three times richer than the poorest three large states. The corresponding ratio is two for China, and 1.5 for the US and European Union member states Praveen Chakravarty, Senior Fellow at IDFC Institute, outline...
    Shankkar Aiyar, Visiting Fellow at IDFC Institute, underlines that surgical strikes across the LoC are a break-away from an era of India's default response of strategic restraint in geopolitical challenges. He also examines India's record in strategic advancement in this realm vis-a-vis China's responses. What has been India’s record? The liberation o...
    Reuben Abraham, CEO and Senior Fellow at IDFC Institute, outlines why India drew the wrong lessons for Special Economic Zones from the China story. India’s experiments with special economic zones (SEZs) were mostly a failure because they drew the wrong lessons from Chinese SEZs, and focused more on giveaways (taxes, real estate, etc.) than a fundamental reset of bad...
    Vivek Dehejia, Resident Senior Fellow at IDFC Institute, examines the academic responses to the Rajan hypothesis. In a nutshell, Rajan’s argument is that excessive monetary loosening in advanced economies via UMPs functions as a contemporary form of “beggar thy neighbour” competitive devaluation, inducing capital in search of yields to flow into emerging economi...
    In this Livemint article, Vivek Dehejia, Senior Fellow at IDFC Insitute, discusses the difficulties and consequences central banks of many advanced countries are facing after undertaking Unconventional Monetary Policies (UMPs). Discussing some of the consequences of UMPs, Dehejia notes,  "...advanced economy bond markets are potentially ...
    In this Bloomberg Quint article, Shankkar Aiyar, Visting Fellow at IDFC Institute, argues that agitations among powerful communities in various states for getting reservation quotas can be attributed to the collapse in agriculture in India.  He points to the falling share of agriculture in total GDP, widening gaps between urban and rural per capita incomes, lo...
    In this Mint article, Vivek Dehejia, Resident Senior Fellow at IDFC Institute, writes about the exemplary reforms proposed by a committee chaired by Arvind Panagariya to overhaul medical education in India.  [...] The most arresting and important governance-related element of the proposed reform is the scrapping of the MCI, and its replac...

    21 September 2016

    Day of the Specialist

    In this The Indian Express Article, Manish Sabharwal, Board Member, IDFC Institute, argues that public policy requirements of the 21st century demand a bureaucracy less generalist. Excerpts below: [...]Civil service reform is not a demand for a smaller state; it is needed to improve state capacity and effectiveness. Of course, technocratic intervention al...
    In this The New Indian Express Article, Shankkar Aiyar, Visiting Fellow at IDFC Institute, argues that India's health objectives are compromised due to the chaotic multi-layering of authority and accountability at the centre and in the states. Excerpts below: Structurally the administration of healthcare is trapped in a nightmarish maze. Health is on the Union li...
    In this Idea's for India column, Visiting Fellow Mudit Kapoor, Senior Associate Vaidehi Tandel and Consulting Senior Associate Komal Hiranandani, argue that alternative definitions of 'urban' are better suited than the administrative definition used by the government to determine policies like eligibility for Mahatma Gandhi National Rural Employment Guarante...

    14 September 2016

    India’s Interstate Disparity

    This Livemint article talks about how Vivek Dehejia and Praveen Chakravarty, Senior Fellows at IDFC Institute, have thrown India’s inter-state income disparity into 'sharp relief'. It highlights certain exemplary points from Dehejia and Chakravarty's recent briefing paper on the topic.  The per capita incomes of the 12 largest states of India, th...

    13 September 2016

    Globalization Paradoxes, Redux

    In this Mint article, Vivek Dehejia, Senior Resident Fellow at IDFC Insitute, argues that only a concerted intellectual effort to resuscitate the conception of globalism is likely to tip the balance in favour of globalization itself. "That there has been a degradation of the public discourse in the advanced economies is not in question. Part of the reason is the ...

    9 September 2016

    The War on Cash

    In this Business Standard article, Manish Sabharwal, Board Member, IDFC Institute, talks about the positive implications of efforts to curb black money and physical cash on jobs in India. [...]anecdotal evidence suggests that the government’s war on black and paper money via five tools is having a wonderful side effect: Negative interest rates offered by t...
    In this The Hindu article, Praveen Chakravarty and Vivek Dehejia, Senior Fellows at IDFC Institute, write about the growing economic divergence among Indian states.  [...]Our research of per capita net domestic product from 1960 to 2014 of India’s 12 largest States, that accounted for 85 per cent of the total population, shows that economic disparity withi...
    In this Mint article, Vivek Dehejia, Senior Resident Fellow at IDFC Institute, analyzes the roots of inflation in India, relevant to the inflation targeting regime now in place. Controversies around whether inflation targeting makes sense as a policy choice, for India in particular, are not new...Briefly, proponents argue that as inflation targeting is the gold standa...
    In this New Indian Express article, Shankkar Aiyar, Visiting Fellow at IDFC Institute, writes that India’s many failures are located in the lack of administrative accountability. [...] The Standing Committee of Defence led by Maj. Gen. B C Khanduri, it would seem, finds a lot yet wrong with the system—it has been particularly scathing in its comments on the r...
    India's huge housing deficit, especailly in the lower income bracket, calls for a serious relook at the rental housing regime. This article in Swarjya by Vivek Kaul, talks of the critical need for rental housing reform if India's housing for all by 2022 target is to be fulfilled. Speaking on the rental housing market in Mumbai, the article quotes fro...



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