Category: Society
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The Covid Paradox — Keynes turned around
The Indian economy, which was facing demand deficiency and slowdown prior to theCovid-19 outbreak, plunged further with the lockdown. The present exercise represents the current problem as a typical demand constrained Keynesian equilibrium, afflicted further by demand and supply failures generated by transaction costs. The resulting scenario resembles a “supply constrained” Keynesian equilibrium.
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CNBC TV18 Column
CNBC TV18 column.
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The Price Being Paid
There is an elementary piece of economic truth that remains unshaken since time immemorial. Put simply, it runs: “Nothing comes from nothing”! Or, using economic jargon, there is a price to be paid to ensure any outcome that generates comfort. At the level of the individual, a decent dinner calls for a payment. At the level of society, weeding out black money from the system calls for hardships as well. To be borne by millions of innocent common men and women queueing up in front of ATM kiosks to withdraw measly sums of cash to try and satisfy their demand for daily essentials. According to reports, the hardship has been somewhat extreme, for some senior people at least are said to have collapsed as they waited endlessly on the streets for their Rs. 2000 in cash. And died
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Troublesome landing — They don’t grow land anymore
Singur, the potato bowl of Bengal, appears to have landed in trouble again. Not on account of unwilling farmers grieving over their lost assets, but on account of overproduction by the ones who didn’t lose their land. Excess supply of the crop has pulled down prices, leading indebted farmers to slither down the precipice. According to media reports, matters have come to a dismal pass, with a section of the farmers demanding that the Tatas be recalled to help rectify the situation. Industrialization, presumably rapid, will bring along with it employment for the farmers, thereby leading them out of misery.
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The Growth Narrative
…The net effect is not obvious, needless to say, but if the markets expand, the credit will go to the Central Bank’s discretionary as opposed to non-discretionary monetary policy, rather than the fiscal stance of the Central budget.