Praxeology: My Reflexions on India

On 15th August Narendra Modi, from the Red Fort, announced that he is going to do away with the old Soviet style central planning model so he will replace the Indian Planning Commission with some other new Institution. Many people and Modi himself is saying that this replacement institution is a move in the direction of Free Market economy! Is it so? He also launched his ambitious Jan Dhan Yojana . In my latest economic report I analyze Narendra Modi's latest policy moves.

Benjamin Disraeli, the 19th century British Prime Minister said in the parliament, that there are three types of lies: Lies, damn lies and statistics. The word statistics itself has statist (politica) roots. It was first popularized by the German political scientist  Gottfried Aschenwall. "The word statistic indirectly comes from the medieval Latin word status, for a political state although there is also a closely related word in German (statistik) which is also used in a political sense. “Statistik” was popularized by German political scientist Gottfried Aschenwall (1719-1772) in his “Vorbereitung zur Staatswissenschaft” (1748). According to Leiden University, it’s difficult to know exactly when the word ceased to have a meaning close to a “political state” and became more of a mathematical term. The first time the word was used in the Oxford English Dictionary is in 1770, in W. Hooper’s translation of Bielfield’s Elementary Universal Education: “The science, that is cal...

Narendra Modi government presented its first budget recently as well as, as per the news reports , Modi personally advised the Indian commerce minister to block the recent WTO deal on trade facilitation ( the Bali Package ). Modi did this allegedly to help the poor people of India and to further the national interest. Also recently the BRICS nations decided to create their own World Bank . In my latest economic report I analyze all three events.

The price of various vegetables, fruits, grains etc., is rising fast in India e.g., the price of tomato has gone up from around 20 Rs/kg to 100 Rs/kg! New Narendra Modi government, who promised to battle inflation during his election campaign, is blaming speculative hoarders for this price rise (see this and this ). This same lame excuse was also given by the former UPA government finance minister P Chidambaram (see here ). So, is there any grain of truth in what UPA and NDA finance ministers are alleging? Are speculative hoarders responsible for inflation (defined as a rise in the general price level)? I answer this question in my following economic analysis. In short, the government's fiscal policies and central bank RBI's monetary policy are responsible for inflation, but the politicians, whether that be Narendra Modi or Manmohan Singh, will never put the blame on themselves! As always, they will blame people - like speculators and hoarders - for their own follies. ...

Recently Narendra Modi government increased Railway passenger and freight fare by whopping 14.2% and 6% respectively. Modi government and his fans are giving reasons that it is necessary to raise prices for providing better services and safety in Indian Railways! Is it true? Is it necessary to raise price to provide better services? Or is there a better alternative available? Also, recently the inflation numbers came out and the WPI jumped to 6.01% in the month of May. Immediately Modi and his finance minister Jaitley started blaming 'speculative hoarders' for this price rise. Again, is this true? Are 'speculative hoarders' responsible for price rise? I tackle these two questions in this week's economic report below.

In my latest economic report I discuss the slowly unfolding economic policies of Narendra Modi and his BJP government. RBI, mostly under the pressure from the Modi government, recently reduced its SLR by 50 basis point releasing 40,000 crore new credit in the market. This is nothing but inflation. I discuss this and other important matters below. Loop Start playing when buffered ( Only Notify ) - % Smart Buffer Estimated Time: Donate to SmartVideo! Global Preferences Loop Start playing when buffered ( Only Notify ) - % Smart Buffer Estimated Time: Donate to SmartVideo! Global Preferences Loop Start playing when buffered ( Only Notify ) - % Smart Buffer Estimated Time: Donate to SmartVideo! Global Preferences Loop Start playing when buffered ( Only Notify ) - % Smart Buffer Estimated Time: Donate to SmartVideo! Global Preferences ...

Arvind Panagaria is a, as newspapers are describing him, renowned economist from the Columbia university. He and his senior professor colleague Jagdish Bhagwati are famous for supporting and favoring Narendra Modi's so-called market oriented economic model of Gujarat. Panagaria recently gave an interview to TOI where he outlined his main economic views for the Modi government if he becomes PM's chief economic adviser. One look at his views makes it clear that if Panagaria gets his way and becomes PM Modi's adviser, then, we are surely heading for more economic troubles. Below I present Panagaria's views immediately followed by my comments. 1. Upon asked what should be the three priority areas of Modi government, Panagaria said: End the paralysis in decision-making in the Central government, end the policy uncertainty for investors including retrospective taxation and other surprises visited upon entrepreneurs by the authorities, and replace the current drac...