india policy & government

Between A Rock And A Hard Place

Indian politics has appeared confusing and frustrating to most people who have watched it. Given the stage of development the country is at, its politics has never been more important. Policy paralysis is the buzz word of the day and there is common consensus that unless India reforms policy and puts the economy back on the political agenda, the country will find it very hard to grow and achieve its potential. More...

Enemy Of The State

Reserve Bank of India Governor Duvvuri Subba Rao is headed in the direction of becoming the enemy of the Indian state.
I've written on numerous occasions that monetary policy in India is excessively tight and risks severely constraining demand and decelerating the Indian economy. India's GDP growth rate has slowed to 4.5% per year in the most recent quarter than ended in December 2012. Headline inflation as measured by the Wholesale Price Index (WPI) which is the equivalent of a Producer Price Index (PPI) has remained stubbornly high but GDP growth has slowed from a 9% per year run rate to a 4.5% run rate.More...

Government Intervention And Black Markets

India recently doubled its import customs duty on gold from 2% to 4%. At the current price of INR 31,000 per 10 grams of gold, the import duty works out to INR 1,240 per 10 grams.

Until 1992 gold imports into India were restricted by the Gold Control Act 1962. In 1992 the act was abolished and free import of gold into the country was allowed with payment of customs duty at INR 250 per 10 grams. Gold imports went up from nothing to 100 tonnes. As the price of gold started increasing, the duty remained fixed and was futher brought down to INR 100 per 10 grams in 2003. More...