Do it yourself

The medium term policy cum fiscal policy strategy statement, that forms the part of the budget documents states that the "Government has initiated structural reforms both on the supply and the demand side." It is argued that these structural reforms "have fiscal implications and are important tools to boost economic performance" and the "impact of these measures initiated is anticipated to have spill-over effect in the next financial year." By implication, the government is claiming that the short term growth has been sacrificed to cement the high growth trajectory in the medium term. The statement claims that "the measures initiated by the Government to cement the economic recovery are anticipated to have effects in the next FY as well." This leads me to revisit the debate whether the administrative changes to improve efficiency & eliminate redundancies; and incremental changes in the current practices, policies and progra...

Continuing from yesterday ( see here ) To understand whether the current economic slowdown is structural or cyclical; and whether the problem stems from the demand side of the supply side, I must understand the meaning of this jargon. Not being an economist, I would like to define this jargon from my own prism to suit my layman understanding. Structural economic slowdown, in my view, means that current economic activity is the best that can be achieved within the current social, legislative, political and economic context. To achieve higher growth that the present level, material improvements (know as structural reforms in common parlance) would be needed in all these spheres at policy, administration and execution levels. Cyclical economic slowdown on the hand means a temporary disequilibrium between the forces of demand and supply resulting in demand destruction. A disproportionate change in demand usually occurs due to excess liquidity, change in rates, ...

  "The man who has done his level best... is a success, even though the world may write him down a failure." —B. C. Forbes (Scottish Journalist, 1880-1954) Word for the day Consent (v) To permit, approve, or agree.   First thought this morning The salvaging of erstwhile Satyam Computer is a classical case study in successful government intervention in corporate affairs. The intervention was swift, bold and effective. The troubled company was not only salvaged, its future growth was also ensured. Jobs of all 50 thousands employees were saved. US government has also been doing similar interventions. More particularly, in the wake of global financial crisis, US administration acted swiftly and salvaged some large corporations like Merril Lynch, General Electric, General Motors, AIG, CITI, Fannie Mae, Freddie Mac savings a large number of jobs and resources. In hindsight, most of the companies bailed out under US TARP prog...