Sparrow Advisory’s Post

What should be the economic policies of the new Indian Union government? Some people think I don't have much interest in this as I write often about the roles and powers of India's Chief Ministers. No - I have a deep interest in what the Union government should do. In my 2021 book on India 2047, I wrote that the Union government must do at least the 5 things I listed. I will discuss them here one by one. *************** 1.     Strengthening meta-economic drivers such as reducing external threats, maintaining internal harmony, delivering good governance, ensuring a free press, maintaining an independent judiciary, and professionally run economic institutions. ************** Here, "meta-economic" refers to a factor that is non-economic but has a significant economic effect. Any country’s economic progress is driven by some non-economic factors. In this book, these non-economic elements are called meta-economic drivers of the economy. I have listed six major meta-economic factors that the Union government should further strengthen. By "professionally run economic institutions," I mean agencies such as RBI, Sebi, ED, and regulatory agencies. etc. I am not discussing any government's past record. My focus is on the future. What I will say is that there is not enough focus on and discussion of these meta-economic factors in terms of their effect on economic progress. It is time to begin this.

Nine years before the independence of India, in 1938, Netaji Subhash Chandra Bose, the then President of the Indian National Congress, formed the National Planning Committee. The mission of the 15-member panel headed by Jawaharlal Nehru was to emphasize the economic reconstruction of the nation and goal-setting to ensure a sufficient standard of living for the masses. Surprisingly, despite his socialist ideals, industrialisation was at the heart of this economic planning. There was some strong opposition from other Congress leaders keen to focus on cottage industries and the farm economy. Historian and Researcher Dr Arpita Mitra recounts, "Netaji was as much a mastermind behind the Economic Planning that was adopted in post-independent India as Jawaharlal Nehru is credited to be." Noted statistician, P C Mahalonobis's book 'Talks on Planning' records: "On the initiative of the Congress President (Subhash Chandra Bose), a Conference of Ministers of Industries was convened in Delhi in October 1938, which was of the opinion that ‘the problems of the poverty and unemployment, of national defence and the economic regeneration in general cannot be solved without industrialization.’ And on its recommendation, the National Planning Committee, with Jawaharlal Nehru as Chairman, was set up by the Congress President in October 1938. This gave a decisive turn to thinking on economic problems in India.”  The panel in 1939 submitted its report on topics like India's Economic Policy, Central Planning (Union govt expenditures for states), Industrialisation, Automobiles, Labour laws, Rural Development, Cottage industries, Public Finance among others. Just one more fact to perhaps remember the worth of India's greatest freedom fighter today, on his 127th birth anniversary. For those interested, sharing two links about Netaji's contribution in shaping modern India's economic outlook: https://lnkd.in/dJBajVge https://lnkd.in/dW_TZEp4 (in Bengali)

#singlepoliticalpartydominance #economicgrowth Recently, started thinking about the relationship between concentration of political power and economic development, especially given the context in Southeast Asian countries (E.g.: India, Indonesia). The region is witnessing strong economic growth, yet at the same time, single-party rule coupled with rising authoritarianism and an institutional emasculation of political opposition.    On the one hand, dominance by a single party over national / state governments has certain potential advantages- 1. National & state governments work in lockstep, sharing similar values, leading to improved partnership and governance outcomes 2. Decision-making is potentially bolder and quicker as it is less plagued by consensus building amongst various disparate political constituents 3. On the surface, a nation appears united and strong, which adds to its external influence in important economic and geopolitical world matters    On the other hand, single-party dominance, over long periods can have adverse effects- 1. These parties start to consolidate power and resources, undermining democratic institutions that stand in their way. This leads to the perception of an unfair and unequal society, leading to long-term resentment in certain sections of people 2. Once democratic checks and balances have been eliminated, the nation is dependent on the vagaries of its political leadership, rather than a more predictable set of systems, institutions & principles to support sustained economic growth 3. Over-reliance on a single political leader, leading to potential disarray and a war of succession, when that leader dies/ relinquishes power 4. Greater concentration of economic power, sometimes through favorable govt. policies/ regulations can lead to rising economic inequality (As this article illustrates)   It will be interesting to see how economic growth unfolds in countries with high concentration of political power, and whether the pros outweigh the cons in the coming future.  https://lnkd.in/ecgxsmWS

https://lnkd.in/g-dEpYr9 "The wealthy south is where you will find the slick new India, with its startups, it campuses and gleaming iPhone-assembly plants. Yet Mr Modi’s party gets a low share of its votes from there and relies on the poorer, more populous, rural, Hindi-speaking north. This north-south divide will be a defining issue in the election in April and May, in which Mr Modi is expected to win a third term. How the split is managed in the long run is of critical importance to India’s prospects. In one alarming scenario, it could create a constitutional crisis and fracture India’s single market. In a more benign future, resolving this divide could moderate India’s harsh identity politics."

The International Monetary Fund forecasts GDP growth of 6.8 per cent in 2024-25. #India is enjoying international goodwill because the world is seeking both a democratic counterweight and a commercial alternative to Xi Jinping’s authoritarian #China. At the same time, another narrative about India has gained currency over Modi’s decade in power: according to international observers, its #democracy is in steep decline. Much of this is captured in a series of new books that seek to shed light on the country since Modi first took office in 2014. 😉 Three in particular take a critical perspective: * Christophe Jaffrelot’s Gujarat Under Modi, * Alpa Shah’s The Incarcerations, * Kunal Purohit’s H-Pop. But it is also worth absorbing the government’s own views on itself. 😎 In Why Bharat Matters (“Bharat” is the Modi-favoured Hindi word for India, and he uses it throughout), Jaishankar makes a compelling case that the world needs an economically growing, diplomatically nimble, digitally connected India.  #economy #economics #markets #investing #strategy #management #future #money #culture #book #books #globaltrade #geopolitics #india #china

India is at a critical juncture in its economic history & will have to rise to several global & domestic challenges. Political expediency will NOT trump economic logic & priorities or change the basic policy direction of the new govt. I write in #TheIndianExpress today. https://lnkd.in/ddxd3B7g #India #reforms #growth #fiscalpolicy #monetarypolicy

The growing economic ties between the U.S. and India are highlighted by impressive investment and trade figures. A recent The Wall Street Journal article titled "American Investors Embrace a Less-Democratic India," which utilizes data from CEIC Data reveals that U.S. foreign direct investment into India has seen a substantial increase since 2014, coinciding with Prime Minister Modi's tenure. This trend is anticipated to maintain its upward trajectory, underscoring a robust partnership. Read the original article here: https://lnkd.in/ddbDa3hj Are you interested in leading data to generate analytical insights? Request a CEIC demo: https://hubs.la/Q02sf95P0 #fdi #indiaelections

The growing economic ties between the U.S. and India are highlighted by impressive investment and trade figures. A recent The Wall Street Journal article titled "American Investors Embrace a Less-Democratic India," which utilizes data from CEIC Data reveals that U.S. foreign direct investment into India has seen a substantial increase since 2014, coinciding with Prime Minister Modi's tenure. This trend is anticipated to maintain its upward trajectory, underscoring a robust partnership. Read the original article here: https://lnkd.in/ddbDa3hj Are you interested in leading data to generate analytical insights? Request a CEIC demo: https://hubs.la/Q02sf95P0 #fdi #indiaelections

The growing economic ties between the U.S. and India are highlighted by impressive investment and trade figures. A recent The Wall Street Journal article titled "American Investors Embrace a Less-Democratic India," which utilizes data from CEIC Data reveals that U.S. foreign direct investment into India has seen a substantial increase since 2014, coinciding with Prime Minister Modi's tenure. This trend is anticipated to maintain its upward trajectory, underscoring a robust partnership. Read the original article here: https://lnkd.in/ddbDa3hj Are you interested in leading data to generate analytical insights? Request a CEIC demo: https://hubs.la/Q02sf95P0 #fdi #indiaelections

I shared insights on the Modi-led coalition's upcoming priorities to address India's urgent socio-economic challenges and longer-term development goals—an excellent piece by CNBC. Do have a look!