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...

Why The President Will Matter In 2014

Pranab Mukherjee was sworn in the 13th President of India today. He was most recently the Finance Minister of India and the number two minister in the Congress Party after the Prime Minister. Mukherjee's eagerness to become the President and the politicking that went into the process was unusual and might appear strange.

In India's Parliamentary system of democracy, members of parliament are all powerful and the Prime Minister elected by majority in parliament is the head of state. The President is considered a rubber stamp whose role is limited to making speeches, maintaining foregin relations, signing bills approved by parliament into law and, at the end of the general election, inviting the largest party to form the government. His or her role is not unlike that of the Queen of England. More...

Federalism, Populism And Policy Making

India like the US has a federal political structure with significant powers vested in state governments. To read more about it, please see my earlier post (from July) on Goods and Services Tax.

The Union (Federal) government run by the United Progressive Alliance (UPA) has been facing a lot of political heart-burn related to the subdivision of the southern Indian state of Andhra Pradesh into smaller states (referred to in the media as the Telangana statehood movement). Recently, Ms.Mayawati, chief minister of the India's most populous state Uttar Pradesh (and arch rival of the UPA regime), tabled a proposal in the state legislature to divide the state into four smaller ones creating a political storm in the process. More...