Country Insights

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Current political situation in India - five states go to the polls in February 2022
INDIA - Report 21 Jan 2022
​Five states in India will go to the polls in February 2022. These assembly elections, particularly in the state of Uttar Pradesh, are being seen as semi-finals for the parliamentary elections in 2024. In particular, if the Bhartiya Janata Party (BJP), which is the ruling party in Uttar Pradesh a...

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Difficulties in the recovery
INDIA - Report 03 Jan 2022
We treat the best days of January 2021 as the benchmark of what was seen in the nature of a rapid recovery after the lockdown of March and April 2020. In late December 2021, the economy was behind those values in important aspects. The pace of recovery has not been good in recent months, particul...

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A sharp recovery in credit quality
INDIA - Report 27 Dec 2021
Prior to the pandemic, a major problem in the economy was the credit stress of the large private financial and non-financial firms. A re-examination of an array of measures suggests that substantial gains have taken place. These are partly about the genuine superior performance of large priva...

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Watching the recovery – household data remains weak
INDIA - Report 16 Nov 2021
The pandemic has largely subsided, google mobility data is close to pre-pandemic conditions, and a nice export boom is in place. But the view of household data is concerning. Household data shows a weak recovery after the peak of the second wave in May 2021. The Indian labor market is mostly a cl...

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Watching the recovery - September 2021
INDIA - Report 07 Sep 2021
High frequency data shows that the recovery from the bottom of Wave 2 is progressing better than the recovery from the lockdown of March/April 2020. If present trends continue, we will be back to the pre-Wave-2 conditions (i.e., Jan/Feb 2021) within a month or two. There is a striking gap between...

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Over-optimistic forecasters
INDIA - Report 16 Aug 2021
As the year progresses, GDP forecasts in India are improving, as is to be expected. But there is a bias in the form of over-optimism. Crude bias correction is applied, based on four years of evidence, to obtain a modified consensus forecast for 2021-22: 6.8% GDP growth. GDP measurement in Indi...

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Withdrawal of the retrospective tax
INDIA - Report 06 Aug 2021
The government of India has moved a bill to withdraw the retrospective tax introduced in 2012 that led to litigation such as the Vodaphone and Cairn cases. While the bill will put an end to 17 cases in which the tax was imposed retrospectively, this is not a move to resident-based taxation. ​

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Watching the recovery
INDIA - Report 21 Jul 2021
The economy has gone through a sharp decline, with the extreme lockdown of March 2020, followed by a recovery, a second wave, and then a second recovery. The first recovery had proceeded for 245–322 days while the second recovery has been in motion for 50–78 days. The second downturn was milder t...

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Macroeconomic conditions and outlook in the second wave
INDIA - Report 18 May 2021
In April, there was a dramatic “second wave” of the pandemic in India. This has been a health catastrophe, particularly for the urban rich and for rural populations. In this report, we review conditions in early 2021 and summarize present health knowledge about the second wave. We look ahead i...

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A second wave of Covid-19 in India
INDIA - In Brief 18 Apr 2021
Through 2020, sero-prevalence data was showing a large-scale spread of the disease within India. Alongside this, a large surge of Covid-19 related deaths was not visible. The analysis of excess deaths data showed that the fingerprints of Covid-19 in death -- male, elderly, co-morbidities, urban -...

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The burden of public debt management impinges on monetary policy
INDIA - Report 08 Apr 2021
There has long been an awkward feature of the Indian institutional environment: The central bank also conducts public debt management, banking regulation, aspires to control the exchange rate, and controls the operations and regulation of the bond market. Given this backdrop and the changes that ...

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Suez Canal Blockage
INDIA - In Brief 26 Mar 2021
The blockage in the Suez Canal is an important problem for global trade. It is particularly important for India. Increased costs of transportation are tantamount to a government-induced barrier to trade.The two biggest ports of India, at Nhava Sheva and Mundra, are on the West Coast. Indian trade...

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Understanding the rebound in the economy
INDIA - Report 03 Mar 2021
The most interesting questions about the Indian economy today are about the rebound in the economy after the depths of the lockdowns. How complete is this recovery? And, looking ahead, will we get back to sustained growth?

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​Budget 2021-22
INDIA - In Brief 01 Feb 2021
The problem. Most GDP growth and jobs emerge from the willingness of private persons to put equity capital and emotional energy into building private organizations. The most important problem of the Indian economy is the loss of dynamism in private investment from 2011 onwards. In recent years, w...

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CPI inflation
INDIA - In Brief 14 Jan 2021
Through 2020, a great debate had raged on the question of inflation and the inflation targeting regime.Under the inflation targeting regime, headline inflation (i.e. year-on-year CPI inflation) is required to stay between 2 and 6 per cent. In December 2019, the bound was breached, when inflation ...