Fiscal Consolidation with High Growth : A Policy Simulation Model for India

In this paper a fiscal consolidation program for India has been presented based on a policy simulation model that enables us to examine the macroeconomic implications of alternative fiscal strategies, given certain assumptions about other macro policy choices and relevant exogenous factors. The model is then used to estimate the outcomes resulting from a possible strategy of fiscal consolidation in the base case. The exercise shows that it is possible to have fiscal consolidation while at the same time maintaining high GDP growth of around 8% or so. The strategy is to gradually bring down the revenue deficit to zero by 2014-15, while allowing a combined fiscal deficit for centre plus states of about 6% of GDP. This provides the space for substantial government capital expenditure, which translates to a significant public investment program. This in turn leads to high overall investment directly and indirectly, via the crowding in effect on private investment, which drives the high GDP growth. The exercise has also tested the robustness of this strategy under two alternative scenarios of higher and lower advanced country growth compared to the base case.Macroeconomic Modelling, Policy Simulation, Fiscal Policy, India

Fiscal consolidation with high growth: A policy simulation model for India.

In this paper a fiscal consolidation program for India has been presented based on a policy simulation model that enables us to examine the macroeconomic implications of alternative fiscal strategies, given certain assumptions about other macro policy choices and relevant exogenous factors. The model is then used to estimate the outcomes resulting from a possible strategy of fiscal consolidation in the base case. The exercise shows that it is possible to have fiscal consolidation while at the same time maintaining high GDP growth of around 8 percent or so. The strategy is to gradually bring down the revenue deficit to zero by 2014-15, while allowing a combined fiscal deficit for centre plus states of about 6 percent of GDP. This provides the space for substantial government capital expenditure, which translates to a significant public investment program. This in turn leads to high overall investment directly and indirectly, via the crowding in effect on private investment, which drives the high GDP growth. The exercise has also tested the robustness of this strategy under two alternative scenarios of higher and lower advanced country growth compared to the base case.Macroeconomic modelling, Policy simulation, Fiscal policy, India

Towards a Manifesto for Reorganising Agriculture

Professor Sharma, distinguished colleagues, ladies and gentlemen allow me to first of all thank the Indian Society of Agricultural Economics and the organisers of this conference, especially the conference President Professor Mahendra Dev, for doing me the honour of inviting me to deliver the first S.R. Sen. Memorial lecture. Dr. Sen was one of our most eminent economists and also a civil servant who served with great distinction after joining the government as the first member of the Indian Economic Service way back in 1938. I think it would be fair to say that among all his many important contributions, both in India and abroad, his primary engagement was with the economics of agriculture. His publications in agricultural economics were well known and much cited (Sen, 1966, 1971). At various times he was also the President of this association, the Indian Society of Agricultural Economics, President of the International Association of Agricultural Economics, the First Chairman of the Governing Body of IFPRI, and Fellow of the American Society of Agricultural Economics. In the Government of India he was also instrumental in establishing the Agricultural Prices Commission, subsequently called the CACP, and the network of agro-economic research centres among other things. It is an excellent initiative of the Society to have instituted this special lecture in his memory