March 14, 2024
India's Poor Will Not Be Wished Away 

The late, sharp-witted economist Michael Mussa, my first boss at the International Monetary Fund, once told me that every statistic must pass the “smell test.” Sadly, the government’s strategically released consumption-expenditure data and cherry-picked analysis both continue to reek. In reality, poverty remains deeply entrenched in India and appears to have increased significantly.

February 28, 2024
India is stunted by the lack of moral leadership

The ethical value that societies place on common welfare determines not just the wisdom and application of economic policies; it ensures a sharper focus on foundational public goods, such as education, gender equality, justice and a clean environment. These things make all else possible. Where public morality—the value accorded to the common welfare—erodes, so does all else.

January 31, 2024
Figure it out: the perceptible holes in India’s “growth story”

Quite simply, key metrics that the government and its acolytes brandish—GDP growth, manufacturing resurgence, domestic and foreign investment—are, in fact, consistently disheartening. Why is the performance so woeful? The clue lies in the lived reality of people, especially the jobs and purchasing power they can secure.

January 25, 2024 
Byju’s hype and hubris

This was a review of a book by Pradip Saha on the meteoric rise and inevitable fall of Byju’s the edtech firm. I used the occasion to argue that edtech and gee-whiz technology will remain a sideshow: true educational progress requires the long-term and unsung dedication of educators and the communities they live and work in. Good education requires steady enlightened public commitment at scale. Child nutrition, safe neighborhoods, and parental income and education are crucial for effective learning. Offering technology as a substitute for good teachers and a nurturing childhood environment reflects moral callousness and a disregard for equity and human dignity.

January 19, 2024
The Slow Death of India’s Secular Democracy

Violent Hindu nationalism—a century in the making—has accelerated at critical moments when putatively secular politicians have used religion to gain an electoral advantage. This process is now culminating in Prime Minister Narendra Modi’s open rejection of any pretense of secularism and the establishment of a de facto theocratic state. Looking back at how we got here suggests that even in the improbable event that the opposition wins the election to be held in April and May, the idea of India as a Hindu state might be hard to undo.

January 2024
Will Indian Illegal Migrants Exceed Those From Mexico?

If current trends persist, with Mexican immigrants decreasing by 900,000 over four years and Indians entering at their recent high pace, the number of Indian illegal immigrants will reach just over 1.3 million in twelve years, matching the Mexican numbers then. In the following years, Indians will outstrip the Mexicans. While the decrease in Mexican immigration might slow, the impulse driving Indian migration is likely to intensify, especially as the working-age population grows and job opportunities remain so severely constrained.

December 15, 2023
India’s lawless financial capitalism fosters a culture of scams

Gathering momentum from immediately after the 1991 “liberalization,” today, scamming is commonplace. Scams are even celebrated for the hyper individuality they showcase. Lawless financial  capitalism—cheered on by the state—has infused a broad disregard in the country for moral norms and public accountability. No one has an incentive to change this state of affairs.

December 4, 2024
A diminishing pie: political tribalism in a contested land

A democracy needs good data for transparent policymaking. For this reason a caste census is an eminently desirable initiative. But the caste census mantra has quickly and inevitably devolved into a political contest with the dominant divisive ideology of Hindutva. This is neither good politics nor good economics. Rather it has become a way to dodge addressing fundamental development deficiencies. The pie will continue to grow too slowly, serving neither the cause of material progress or of social justice.

October 30, 2023
An unfolding economic tragedy 

A sober analysis of GDP growth just before and after COVID points to a medium-term annual GDP growth forecast of 3%-4%. Unfortunately, a domestic elite and international media narrative of “high growth” will continue, as will policies in opposition to India’s needs. And when narrative and reality clash repeatedly, tragedy follows.

September 6, 2023
India's Fake Growth Story

Behind the billboards in Delhi advertising this month’s G20 summit are slums whose residents can no longer earn a living. Their roadside stalls and shops have been demolished, lest they tarnish Prime Minister Narendra Modi’s carefully curated image of a rising India. India’s GDP statistics are also on display as part of this “branding and beautification” exercise.

August 6, 2023
Only a cheaper rupee can spur Indian Growth 

A result of India’s low productivity growth has been its generally higher inflation rate than in countries with which it competes in international markets. This, along with poor investment in human capital and low female labor force participation, has meant that India has repeatedly lost the competitiveness race to East Asian economies, from Japan in the 1950s, through Taiwan, Korea, China, and now Vietnam. Unlike the East Asian economies, which have been only too willing to strategically use currency devaluation to boost exports at times of lagging competitiveness, Indians have viewed the currency’s value with a bogus pride. And for the last three decades or so, Indian elites have also viewed a strong currency in their economic interest. Today, rather than the government’s dodgy tax incentives and subsidies to spur exports, a rupee that is closer to Rs 100 per dollar—rather than the current 82—will boost Indian exports, to maintain which there will be no option but to invest in human capital and more women in factories.

July 28, 2023
Unlike China, India Cannot Be an Economics Superpower

The hype about India includes the mindless use of the phrase “economic superpower.” Drawing on Oded Galor’s observation that no country since the Industrial Revolution has achieved long-term productivity growth—the essence of economic success—without substantial investment in human capital and bringing more women into the workforce, I argue that India specifically lacks these prerequisites. India, moreover, has no plan or strategy on overcoming these crucial deficits and relies rather on the fantastical expectation that “digital infrastructure” will help leapfrog over these human deficiencies. On the other hand, China, always the counterpoint for India, has invested precisely in human capital for decades. For this reason, I throw in my two-bit into the raging prognostications of China’s imminent decline. My reading of history is that while the macro-economic imbalances that China is saddled with will undoubtedly damage its economic prospects, the human capital—which places it at the frontiers of the old and new economies—will see it through its current muddle.

 

June 30, 2023
Moral Failures

This essay drills down into some of India’s most acute problems. As a student at the Centre for Development Studies in the late 1970s, I was taught that you cannot understand India without understanding the condition of Indian agriculture. Sadly, that is even more true today than it was then. The sector employs 45 percent of the country’s workforce (which is more than before the pandemic) and produces 15 percent of the GDP. People are crowding into a hopelessly unproductive agriculture just when the world is celebrating its digital transformation and leapfrogging moment. Farm sizes are shrinking and groundwater levels have fallen so sharply that India might soon be unable to maintain its agricultural output. And the climate crisis is making everything worse.

June 17, 2023
Jobs are what India needs to power the world's largest population 

An editor at the New York Post invited me to write on India’s economic problems. This piece repeated the key messages: Commentators were reading the dead-cat bounce from the second COVID-19 wave as a measure of India’s growth potential—and projecting it into the future. In fact, India’s average GDP growth over the past four years was 3.5 percent, which was, therefore, also the best predictor for growth going forward.

June 16, 2023
Get Back to the Basics

Contrary to the popular notion that southern states are clearly superior to northern states, Karnataka’s economic and political indicators closely track Indian averages, as if India's progressive and destructive forces are locked in battle in the State. What happens next in Karnataka will tell us which force is winning. If the new Karnataka government remains seduced by technology and handouts while ducking the basics of public goods and jobs, democracy would have again betrayed the people. Hindutva’s visceral appeal will attract even more followers.

May 12, 2023
India’s Law-of-the-Jungle Raj

Beneath the veneer of Indian democracy, deeply undemocratic private and state behaviour has become the norm, which, not surprisingly, rejects reform of India’s electoral and judicial systems. This ‘bad equilibrium’ seems impossible to undo.

April 25, 2023
India’s Demographic Dividend Will Remain Unpaid

The occasion of India’s population going past China’s has created a flutter about India’s so-called “demographic dividend.” The fact is that India has had a demographic dividend for the entire 75 years of its post-independence history. And that dividend has never paid because India’s employment challenge has kept growing more insurmountable. That challenge cannot be measured by the “unemployment rate” because most Indians cannot afford to be unemployed. Rather, they are “underemployed” in work-sharing arrangements on farms and in small businesses. Together, the unemployed and under-employed constitute India’s growing surplus labor. Most of the rest toil unforgiving hours on pitiful wages with no social security benefits. Only about 10 percent of the workforce receives a regular monthly or weekly wage with at least one social security benefit. The simple truth is that the economy does not generate good jobs on anywhere close to the scale needed to employ its working-age population.

March 29, 2023
India’s boom is a dangerous myth

Indian and international elites have a giddy—indeed, hyperbolic—view of India’s imminent economic rise. They sustain this view with a disingenuous numbers game, which amounts to wishful thinking clothed in bad economics. Buoyed by the hype, Indian policymakers offer policy gimmicks and silver bullets, which amplify the hype. Fundamental development deficits are thus left unaddressed, doing neither India nor the world a favor.

February 20, 2023
India’s Broken State

The town of Joshimath may be nestled 6,000 feet (1,800 meters) above sea level in the Himalayas, but it is sinking fast. In early January, large cracks split homes, hotels, and roads, leaving the town’s future hanging in the balance. Joshimath is a grim metaphor for India’s woefully unaccountable state.