Another year, another messy situation with inflation: we continue to suffer the consequences of faulty economic policy institutions. To get a sense of what is going on, be sure to ignore the standard year-on-year inflation data (which shows what happened in the last 12 months), and instead use seasonally adjusted month-on-month price changes (which show [...]

A few years ago, when Percy Mistry’s committee was working on the MIFC report, I used to joke that of the two great industries in Bombay, movies will make it first to international customers. A few days ago in the New York Times, Anupama Chopra [...]

When central planners take the outcome away from the self-organising system of the market economy, we often get strange outcomes. At the end of June 2009, 32 foreign banks
were in India with 293 branches. In addition, 43 foreign banks were in India through `representative offices’. (Source: RBI Annual Report. Hat tip: Radhika Pandey).
In a news item [...]

SEBI is pushing on the frontiers of enforcement in India. This is the order on Bank of Rajasthan.
I was surprised to see how small the market reaction was (this image is from Yahoo Finance):

What am I not understanding?

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Vikas Bajaj in the New York Times on privatisation in India.
I had recently written a blog post on India’s foolishness on visa rules for people coming into conferences. Siddharth Varadarajan has a great opinion piece on this in [...]

Financial stability, regulatory coordination, financial reforms
So far, in India, regulatory coordination was based on the HLCC. This has not been a particularly good experience. The HLCC was not statutory and there was no defined mechanism through which decisions would be obtained. Many inter-regulatory difficulties simply languished. One peculiar aspect of the HLCC was that it [...]

Even if you don’t usually read the Economic Survey, this year, the chapter titled Micro foundations of inclusive growth is well worth reading.

Read this interview in the Times of India with Steve Coll, and this Congressional testimony of his. If you haven’t yet read Ghost Wars, you should.
Vijay Kelkar’s recent speech on privatisation.
The comments on this [...]

There are two paths to nice cities: to take a messy old city and fix it, or to start from scratch.
The process of solving the problems of an old city is hard. Some cities started over owing to the destruction caused by war, an earthquake, or a great fire. We wouldn’t wish that [...]

Three fascinating new takes on Mumbai as an international financial centre:

Mukul Asher and Azad Singh Bali in DNA a few weeks ago.
In the February 2010 issue of Pragati released yesterday, there are two articles on this: by Percy Mistry himself, and by V. Anantha [...]