Commentary

From Liberation Day tariffs to a war in West Asia, the global economy is going through its sharpest test in years. India faces rising oil prices, a stretched current account and an ambitious 2047 growth target, all at once. India, thankfully, has the tools to respond appropriately.
The world today is more uncertain than at any point since the covid pandemic. The Daily Trade Policy Uncertainty Index, a barometer of global economic anxiety, has surged to levels not seen since 2020, driven by two successive waves of US tariffs, conflict in Eastern Europe, the Israel-Gaza war and a flare-up in West Asia since February.

For an economy as well integrated into global trade and energy markets as India, both the challenges and opportunities are immediate and consequential.

The political discourse in India is unified around the aspiration of becoming a developed nation, or Viksit Bharat, by 2047. We must examine the arithmetic of this ambition.
The World Bank defines a high-income country as one with a per capita gross national income of around $14,000. India currently stands at about $2,700. A mechanical calculation shows that reaching a per capita of $14,000 from $2,700 over 20 years would require an annual compound growth rate of 8.5 per cent.
Concurrently, the Indian population expands by roughly 1 per cent a year. When we adjust for this moving target and population expansion, the required growth rate in aggregate output is roughly 9 per cent a year. Sustaining a 9 per cent compound growth rate over two decades is a formidable task.

NSE IPO rekindles debate over exchange ownership, profit motive and Sebi’s deep regulatory control

Developing a deep corporate bond market requires the political will to relinquish control over credit, not technical fixes

Abolishing Revenue Deficit Grants: A Sound Idea in Theory with an Uneven Landing in Practice. States bearing the greatest adjustment burden are not always those with the weakest fiscal records.

It’s very important to anchor our fiscal policy in terms of debt, because debt does matter. Higher debt is associated with higher debt servicing costs, and that can have opportunity costs and other consequences