Lost in Technicalities: The Great Indian Slowdown

India’s Finance Minister Nirmala Sitharaman has said, while replying to a discussion on the economic slowdown in the Rajya Sabha, ‘growth may have come down, but it is not a recession yet and it won’t be a recession ever’. Drawing on data up until December 2019, I evaluate to what extent India’s economy is indeed slowing down.

Figure 1: Quarterly Rate of Growth of GDP in IndiaScreenshot 2020-01-21 at 09.42.32

No, it’s not a recession, defined strictly in technical terms, i.e. on the whole, the level of activity hasn’t fallen, even though certain crucial sectors, like automobiles, are seeing a fall. What we have instead is a slow down, a severe one at that, with falling rate of growth of GDP for five straight quarters (figure 1). The Indian government is hiding behind economic jargon to obfuscate the reality that is biting the economy. The writing is on the wall. The Indian economy is facing a severe crisis and the sooner we come to terms with it, the better. Based on a recent paper in Economic and Political Weekly, this blog discusses the changing growth levels in the Indian economy, the reasons for the recent slowdown, and some possible short and long term solutions.Read More »

Keynes or New-Keynesian: Why Not Teach Both?


For economists, the Great Recession, the worst crisis the world economy has seen since the Great Depression of the 1930s, has highlighted the need for plurality in macroeconomics education. Ironically, however, there is a move towards greater insularity from alternative or contrasting points of view. Where as, what is required for vibrant policy making is an open-minded academic engagement between contesting viewpoints. In fact, there does not even exist a textbook which contrasts these contesting ideas in a tractable manner. This blog post is as an attempt to provide certain pointers towards developing macroeconomics in a unified framework.

Macroeconomics as a subject proper came into existence with the writings of John Maynard Keynes[i]. There were debates during his time about how to characterise a capitalist economy, most of which are still a part of the discussion among economists. Keynes argued that capitalism is a fundamentally unstable system so the state needs to intervene to control this instability.Read More »