Episode 19: Farm Laws: Why Critics are Wrong

In Episode 19 of the Transforming India podcast, co-hosts Arvind Panagariya and Pravin Krishna provide a comprehensive analysis of India's recent agricultural marketing reforms and various debates around them. They trace the origins of India's agricultural produce marketing laws back to the 19th century and describe the regime that has existed for almost 90 years. They then discuss the reform of these laws first via the 2003 APMC Model Act and then the three central government laws enacted in September 2020. They provide an in-depth explanation of the rationale for the three laws and explain the political economy of the protests against them by farmers from Pubjab and Haryana. They explain why various criticisms are either specious or misleading and conclude by exploring possible resolutions of the differences between the protesting farmers and government.

Episode 18: Financial Sector in India's Economy

With special guest Dr. Viral Acharya, CV Starr Professor of Economics at New York University's Stern School of Business a

For those interested in understanding India's banking and Non-banking Financial sectors, there is no better source than this hour-long Episode 18 of the Transforming India podcast. In this episode, co-hosts Arvind Panagariya and Pravin Krishna speak at length with Dr. Viral Acharya, CV Starr Professor of Economics at New York University's Stern School of Business and former Deputy Governor of the RBI. The three discuss the evolution of the Non-performing assets (NPA) crisis, its handling by the government, the role it played in economic slowdown both pre- and post-Covid-19, the impact Covid-19 will have on future bankruptcies and NPAs, and preventive actions the government must take. Dr. Acharya also offers advice on banking sector reform, including privatization. Further, the episode offers a rich discussion of the role that Non-Banking Financial Companies (NBFCs) play in India's financial sector, the crises that engulfed it alongside the NPA crisis in banks, possible remedies, and whether it will be wise to allow non-financial corporations to have their own banks.

Episode 17: India-USA ties under Trump vs. Biden

With special guest Dr. Tanvi Madan, a Senior Fellow in Foreign Policy and Director of the India Project at the Brookings Institution

In Episode 17 of the Transforming India podcast, co-hosts Arvind Panagariya and Pravin Krishna are joined by Dr. Tanvi Madan, a Senior Fellow in Foreign Policy and Director of the India Project at the Brookings Institution in Washington, DC. They discuss how a Biden presidency will be different for India than a second Trump administration. Madan begins with a crisp overview of where the current relationship stands in areas of defense, foreign policy and economy. The conversation then moves to a discussion of India-USA-China trilateral relationship. It considers questions such as whether Biden will be softer on China and whether he would take a more conciliatory approach towards the latter in the area of trade? Madan also offers insights into whether a Biden presidency might take a more conciliatory view on H1-B visas and ease up on Iran sanctions in ways that might be beneficial to India. She concludes by arguing that with some foundational agreements between India and the USA already in place, the relationship is poised to deepen further as these agreements are implemented over the next four years regardless of who occupies the White House during those years.

Episode 16: GDP Growth during COVID-19

In the latest episode of the Transforming India podcast, co-hosts Arvind Panagariya and Pravin Krishna discuss the decline in India's GDP growth in the April to June quarter in 2020, analyze its origins and recommend what actions the government and the RBI can take to bring growth back on track. They argue that the decline in growth is largely due to COVID-19 and also highlight that we need not be pessimistic about India's growth prospects after the pandemic. The government needs to create conditions for workers to go back to work safely, including through vaccinating 60% of the population, and focus on bank recapitalization. The RBI needs to ease interest rates further rather than focus on inflation. The RBI must also prevent the rupee from further appreciation due to foreign capital inflows. Finally, Professors Panagariya and Krishna discuss the numerous reforms that the government has been undertaking, including in the areas of agriculture and labor laws.

Episode 15: India-China Trade Relations

In the latest episode of the Transforming India podcast, co-hosts Arvind Panagariya and Pravin Krishna discuss China's growing hegemonic tendencies in the Indo-Pacific region and its implications for India-China trade relations. They note that recent developments in the South China Sea, East China Sea, Pacific and on the India-China border have created the need for India to distance itself from China in its trade relations. They then note that India has three possible options to reorient its trade away from China: raising tariffs against China only, raising tariffs against all partners on goods that come primarily from China, and engaging in Free Trade Agreements with other countries. The first two options aim to discourage imports from China directly whereas the third achieves the objective indirectly by encouraging imports from other countries at China's expense. They come out in favor of the third strategy, advocating for engaging in more trade agreements with large blocs such as the EU, UK and US. They also outline the dangers of returning to import substitution by raising tariffs unilaterally.

Episode 14: India's Response to COVID-19, part II

In this episode of the Transforming India podcast, co-hosts Arvind Panagariya and Pravin Krishna continue their comprehensive discussion of India's economic response to Covid-19 from the previous episode, turning the focus to structural reforms. The episode covers growth-enhancing reforms in seven areas aimed at enhancing India's medium and long-term growth. The seven areas of reforms are agriculture, privatization of public sector enterprises, state-level reforms, electricity, coal sector, Micro, Small and Medium enterprises, and rental housing.

Episode 13: India's Response to COVID-19, part I

In this and a companion episode of the Transforming India podcast, co-hosts Arvind Panagariya and Pravin Krishna offer a thorough discussion of India's response to Covid-19, till date. This episode covers measures with rupee figures attached to them and the companion episode will discuss economic reforms aimed at improving long-term efficiency and growth prospects of the economy. In the present episode, they divide the government's measures into two parts: Phase I measures  announced following the Prime Minister's speech on March 24 and Phase 2 measures announced following his speech on May 12. They dissect the response in terms of welfare measures, ramping up health infrastructure and availability of credit to MSMEs, larger corporations and the self-employed, including vendors, both by the government as well as the RBI. They also touch upon the issue of migrant workers. The companion episode will be released soon.

Episode 12: India Unlimited

In this episode of Transforming India, co-hosts Arvind Panagariya and Pravin Krishna discuss Professor Panagariya's latest book, India Unlimited: Reclaiming the Lost Glory. They discuss how India was once the world's largest economy and how it can get on the path to reclaiming this position again. They point to the creation of a large volume of well-paid jobs as the key to making India the third largest economy in the world in less than ten years. Professor Panagariya points out that the central obstacle India faces today is the concentration of jobs in tiny economic units: 70 million farms with average size of less than a quarter hectare and just 16% of industry and services workers in enterprises with 20 or more workers. What India needs most today are many more medium and large enterprises in labor-intensive sectors such as apparel, footwear, furniture, toys, kitchenware and other light manufactures.

Episode 11: Economic Policy in the Age of Coronavirus

Co-hosts Arvind Panagariya and Pravin Krishna speak with Sajjid Chinoy, Chief India Economist of JPMorgan, on the economic impact of and policy response to Covid-19.  They ask him: (i) If India should follow the USA and other rich countries and scale up its stimulus package to 10% of GDP as some critics have opined; (ii) Are there policy actions the government should announce during lockdown to help the economy return to its pre-Corona growth path at the earliest; (iii) How can India minimize the risk of the stimulus to address the temporary demand deficiency turning permanent; (iv) What can India do to minimize the pain of and damage from future Corona-like shocks; (v) What kind of external shock from disruption of exports and global recession will India face; and (vi) In the longer run, what can India do to maximize the gains from an accelerated shift in investment and production activity away from China that will inevitably happen in the aftermath of Covid-19? Dr. Chinoy offers pointed answers to each of these questions.

Episode 10: Growth Slowdown: Pre- & Post-Coronavirus

Co-hosts Arvind Panagariya and Pravin Krishna discuss causes of pre-Coronavirus growth slowdown, what Coronavirus may bring by way of economic impact and possible responses. On pre-Corona slowdown, they identify four possible explanations: GST, demonetization, weak demand, and financial market disruption. They conclude that financial market disruption is the most important factor accounting for pre-Corona slowdown in growth. Their main recommendation is resistance on the part of the RBI to a return to the past practice of allowing restructured loans to be classified as standard assets. On Coronavirus-induced slowdown, at this stage, there is far too much uncertainty to predict how deep the impact will be. But even under a scenario in which India succeeds in containing the virus to clusters, the impact will be significant. They suggest cash transfers and increased provision of subsidized grain to the poor, especially those in urban areas. The government may also consider temporarily delaying tax collection and loan repayment.

Episode 9: Budget 2020-21: A Scorecard

Professors Arvind Panagariya and Pravin Krishna dissect the positives and negatives in the first budget of the new decade. Among the positive features, they note the government's continued commitment to fiscal consolidation, launch of the reform to simplify the personal income tax system and end the exemption raj, a large disinvestment program including privatization of many public sector enterprises, and the development of five key ancient archeological sites. On the negative side, they discuss the likely damage to the economy from extensive roll back of trade liberalization. They argue that while continued reforms in the domestic arena will allow India to return to 7 to 8% growth in two years' time, the turn to import substitution and protection will deny it double-digit growth.

Episode 8: Budget Suggestions for Modi 2.0

Co-hosts Arvind Panagariya and Pravin Krishna offer suggestions for the first budget of the 2020s. In the first half of the episode, they discuss the core budget consisting of expenditures and revenues. In the second half, they offer suggestions for reforms. On the former, they suggest maintaining fiscal discipline while shifting expenditures towards defense and infrastructure. On the revenue side, they suggest cuts in personal income tax rates along the lines of corporate tax reform, removal of exemptions and aggressive programs of privatization and asset monetization. They urge the Finance Minister to pay special attention to exports and creation of good jobs for those with limited or no skills. They specifically pitch for focused attention to labor intensive sectors such as apparel, footwear and other light manufactures.

Episode 7: Economic Policies Since Independence

With Special Guest Naushad Forbes

This episode brings co-hosts Arvind Panagariya and Pravin Krishna in a fascinating conversation with Naushad Forbes. Forbes is Co-Chairman of Forbes Marshall, a leading multinational engineering company headquartered in Pune. He is also a former President of the Confederation of Indian Industry (CII). The conversation revolves around the evolution of the policy regime around manufacturing in India since independence with special reference to the contrast between pre- and post-reform eras. It offers the listener an unusual window into the pains and pleasures of running a successful corporation, as experienced by Naushad Forbes. Forbes Marshall made its way through the thicket of the license-permit raj during Indira Gandhi years to the era of fierce competition unleashed by the 1990s reforms of Dr. Manmohan Singh. The episode concludes with suggestions for the future direction of economic policy.

Episode 6: FDI Lessons from China for India

With Special Guest Professor Mary Lovely

In this episode, co-host Pravin Krishna is joined by Rebecca McGilveray in a conversation with Mary Lovely, Professor of Economics at Syracuse University, on lessons for India from China on Foreign Direct Investment (FDI). The episode is recorded on the sidelines of the Columbia Summit on Indian Economy, where Professor Lovely presented her ongoing research on the highly successful experience of China on FDI. She highlights the phenomenal contribution that FDI made to manufacturing exports, raising productivity growth of domestic firms and job creation. She goes on to explain the importance of complementary policies such as those relating to labor and land markets to attract foreign investment. Professor Lovely says that going forward India has a huge opportunity to attract more FDI.

Episode 5: Dissecting Corporate Tax Cut

In this episode, co-hosts Arvind Panagariya and Pravin Krishna discuss the the key reform by India's Finance Minister to boost growth: the unprecedented cut in the tax on corporate profits. They explain what the reform means in the short run and long run.  They explain why the tax cut will boost investment and how the government should fill the gap in revenues created by the tax cut.  In particular, they suggest speedy privatization of PSUs, monetization of infrastructure assets and sales of unused government land as solutions that would improve productivity while bringing revenues.  They also argue that the end to exemptions raj would cut tax disputes and harassment.

Episode 4: Addressing India's Growth Slowdown

In this episode, co-hosts Arvind Panagariya and Pravin Krishna are joined by Sajjid Chinoy, Chief India Economist of JP Morgan. The podcast discusses the current growth slowdown in the Indian economy in the context of the recently released GDP numbers for the first quarter of fiscal year 2019-20. It also explores what should be done in the short run to revive growth and in the long run to sustain it.

Episode 3: Why India Needs a Weaker Rupee

In this episode, co-hosts Arvind Panagariya and Pravin Krishna explain why India must abandon the current policy of a strong rupee. Easing up on the strong rupee will make exports more competitive in foreign markets. It will also make domestically supplied goods more competitive against imports in the Indian market. Furthermore, a weaker rupee will make it easier for India to lower tariffs, thereby helping it shed its image as a protectionist nation and reduce trade tensions with the United States.

Episode 2: Export Led Growth

Professors Arvind Panagariya and Pravin Krishna argue that India can sustain 9 to 10% growth for two to three decades and create good jobs for its vast workforce through an export-centered strategy.  They note that no country has achieved these objectives without competing in global markets. Such competition forces efficiency and stimulate innovation in product, process and management practices. The professors also expose the myths that opening to imports causes unemployment and that automation has closed the window to manufacturing-led growth as a viable strategy.  They conclude by warning against a return to import substitution, especially in view of India’s own dismal experience with it during the 1960s and 1970s.

Episode 1: Policy Reforms: The First 100 Days

In this inaugural episode, we focus on what should be the immediate priorities for the first 100 days of the Modi government.