India on the Growth Turnpike: Essays in Honour of Vijay L. Kelkar


ISBN: 978-81-7188-830-6
Binding: Hardcover (6¼” x 9¼”)
Pages: 318
2010 Edition

Vijay Laxman Kelkar has been one of the most creative, contemplative and versatile public policy makers of India. Whether it has been articulating a vision for the role of markets and government, or stressing for the importance of a sound public sector balance sheet, or arguing for tax reform and fiscal federalism, or making simple and sound policies through consensus, his contributions are non-parallel. The essays in this festschrift are by some of the leading economists, bankers and policy planners of India. While saluting his visionary role in the government, they also provide an insight into some current and critical macroeconomic and finance issues. The writings cover a broad set of topics, among them fiscal, monetary and external sector policies, infrastructure, financial inclusion and education.

This volume commemorates the conferring of the Skoch Challenger Lifetime Achievement Award 2010 on Dr. Kelkar for his unique contributions to the Indian economy in general and his key role in financial sector reforms process in particular. This timely book will appeal to policy makers, political scientists, economists and other social scientists conducting research and teaching courses in political economy, fiscal and monetary policy, development studies, public policy and governance.


Sameer Kochhar is President of Skoch Development Foundation which is the leading think tank on digital, social and financial inclusion issues in India. He has been passionately working towards promoting participatory democracy, empowerment, and bringing improvements in delivery systems. He is CEO, Skoch Consultancy Services, and is an industry veteran with a multifaceted career spanning over two and a half decades. He is India strategy and management consultant to several Fortune 500 as well as large Indian companies for over a decade. He is also Chief Editor of Inclusion — a quarterly publication focused on development economics issues. He is considered to be one of the most respected independent voices on inclusive development and citizenship issues in India. He is a member of several expert groups and committees and his research opinion and writings have shaped many a public policy dialogue. He is also a Member of the Expert Group constituted by the Ministry of Panchayati Raj, Government of India advocating a case for strengthening of Panchayati Raj Institutions (village councils) through use of technology. He has written extensively on areas of emerging management practices, infrastructure, governance, technology, finance, economics, e-Governance, Panchayati Raj and ICT for development. He has recently published four widely acclaimed books titled Infrastructure and Governance (2008); Financial Inclusion (2009); Urban Renewal: Policy and Response (2009) and, Speeding Financial Inclusion (2009).


1. India on the Growth Turnpike: No State Left Behind — Arvind Panagariya
Growth: No State Left Behind
Poverty: Progress Everywhere
Smaller and Newer States and Union Territories

2. Sustaining High Growth — Nitin Desai
The Growth Record
International Comparisons
Sustaining High Growth
What if we Succeed

3. Transparency in Macroeconomic Policy — Indira Rajaraman 91
Received Stylised Monetary Policy Models
Rating Central Banks on Transparency
Price Stability and Financial Stability
Bubbles and Regulation
Transparency Redefined

4. Consistency of Fiscal, Monetary and External Sector Policies for Sustained Macroeconomic Growth — S.S. Tarapore 103
Macroeconomic Policy Issues
Ingredients of a Sound Fiscal Policy
Monetary Policy Objectives, Instruments and Transparency in Formulation
External Sector Policies
Concluding Observations

5. Preventing, and Responding to the Crisis of 2018 — Arvind Subramanian 123
Self-Insurance and Macroeoconomic Policy
Strengthening the Sovereign Balance Sheet:
Vijay Kelkar’s Obsession
Foreign Capital
Monetary Policy and Asset Prices
Inflation Targeting

6. Stabilising the Indian Business Cycle — Ajay Shah and Ila Patnaik 137
Stabilisation through Monetary Policy
Stabilisation through Fiscal Policy
Economic Reforms as a Tool for Stabilisation

7. Tax Compliance and Tax Rates: India 1996-2010 — Surjit S. Bhalla 155
The Laffer Logic of Tax Reforms
Data and Methods
Tax Compliance in India, 1996-2010

8. Inclusive Growth for Creating an Equitable Society — K.C. Chakrabarty 175
Role of Financial Inclusion in Achieving Inclusive Growth
Federal Structure and Financial Inclusion
Strategies for Greater Financial Inclusion
Mobile Commerce: The Emerging Paradigm
Demographic Dynamics in India—Financial Inclusion
Educating to Enhance Inclusion
Conclusion: Towards Greater Financial Inclusion

9. Financial Inclusion via Universal Access to Electronic Payments — Laveesh Bhandari and Sumita Kale 203
The Problem of Financial Inclusion
A Transaction-based Approach to Financial Inclusion
What the Under-privileged Require
The Importance of the Mobile

10. India’s Elementary Education Challenge — Bibek Debroy 233
Introduction and the “Right”
The State of India’s Elementary Education
The Way Forward

11. Developing the Market for Land — Shubhashis Gangopadhyay 263
Poletown and Singur
Laws Governing Government Acquisition
Poletown Revisited
Is a Third Party Necessary?

12. A Programme to Accelerate Infrastructure Spend in India through PPPs — Hari Sankaran 275
Leveraging Affordable Housing to Improve
Urban Infrastructure Services
Reaping the Urban Dividend
The Exchequer Matrix
Perspective on Financing
Extending the Strategic Design of PPPs ala “Housing for All” across Sectors
List of Dr. Vijay L. Kelkar’s Publications


Surjit S. Bhalla obtained his Ph.D in Economics from Princeton University. He has worked as a research economist at Rand Corporation, Brookings Institution, the World Bank and The Policy Group; as a proprietary trader/strategist/portfolio manager at the World Bank, Goldman Sachs, Deutsche Bank and Oxus Investments. Presently, he is Chairman of Oxus Investments, a New Delhi based “hedge fund” and emerging markets advisory firm. Dr. Bhalla has served on several committees of the Government of India. He is author of several academic articles as well as three books on globalisation and its effects on the world economy: Imagine There’s No Country: Poverty, Inequality, and Growth in the Era of Globalization (2002); Devaluing Your Way to Prosperity: Misaligned Currencies and Their Growth Consequences (forthcoming, 2010) and Second Among Equals: The Middle Class Kingdoms of China and India (2007, also forthcoming, 2010).

Laveesh Bhandari is Founder Director of Indicus Analytics Pvt. Ltd. He has led policy-oriented studies for nationally and internationally reputed organisations such as the Finance Commission, World Bank, UNICEF, ADB, FAO, etc. He has published extensively and many newspapers and newsmagazines carry his columns regularly. His work on inequality, education and regional growth is frequently referred to in the policy debate in India. He has received a number of awards: EXIM Bank Award for his work on international joint ventures and the Hite Fellowship for his work on international finance. He has also served as visiting faculty at the Indian Institute of Technology, Delhi and as Managing Editor, Journal of Emerging Market Finance.

K.C. Chakrabarty, a seasoned banker with an accomplished banking career spanning over three decades donned the role of a Central Banker on June 15, 2009 after he assumed charge of the office of Deputy Governor in Reserve Bank of India (RBI). His current assignments at RBI include guiding and overseeing the areas pertaining to rural and urban cooperative banks, information technology, payment and settlement systems, customer services, human resource and personnel management. Before taking over as the Deputy Governor, Dr. Chakrabarty graced the seat of Chairman & Managing Director (CMD), Punjab National Bank for over two years and before that, the CMD, Indian Bank for two years. He was also the Chairman of the Indian Banks’ Association (IBA) for a brief period. He has recently published a widely acclaimed book with Sameer Kochhar, R. Chandrashekar and Deepak B. Phatak entitled Financial Inclusion.

Bibek Debroy is Distinguished Fellow, Skoch Development Foundation, an economist and currently Research Professor, Centre for Policy Research, and Contributing Editor, Indian Express group. He has worked in teaching and research institutes, for the government, and an industry chamber. He is the author of several popular articles, papers and books. His interests include law reform and indology.

Nitin Desai, a graduate of LSE, taught economics at two UK universities, worked briefly in the private sector, had a long stint as a government official in India and then joined the UN in 1990. In India, he joined the Planning Commission in 1973, and worked there till 1988. Later he joined the Ministry of Finance as the Chief Economic Advisor (1988-1990). In the UN, which he joined in 1990, he was Under-Secretary-General for Economic and Social Affairs. After his retirement, he has been involved in a variety of public policy activities nationally and internationally. He is a member of the National Security Advisory Board and the Prime Minister’s Council on Climate Change. He is a Distinguished Fellow of TERI and an Honorary Fellow of the LSE. He writes a monthly column in the Business Standard.

Shubhashis Gangopadhyay is Managing Trustee and Research Director of India Development Foundation. In 2008, he was Advisor to the Finance Minister, Government of India, and was the youngest ever Secretary in the Government. He got his Ph.D in Economics from Cornell University, USA, in 1983 and his Bachelor’s degree from Presidency College, Kolkata in 1978. He joined the Indian Statistical Institute as a lecturer in 1983 and was promoted to fulltime professor in 1991. He took over as founder-director of IDF, an independent research organisation, in 2002. He was awarded an honorary doctorate by the University of Gothenburg, Sweden, in October 2006 where he is currently a Visiting Professor. He is the Chief Editor of the Journal of Emerging Market Finance (Sage Publications), and an Associate Editor of the Journal of Financial Stability (Elsevier). He is a member of the South Asia Chief Economist’s Advisory Council of the World Bank. He is also the Founder-President of the Society for the Promotion of Game Theory and its Applications. He has published widely in international journals and has a number of books, in economics and finance.

Sumita Kale is Chief Economist with Indicus Analytics. She has been visiting faculty at the Department of Economics, University of Pune, and at the National Insurance Academy, Pune. She obtained her Ph.D from the University of Pune and M.Phil. in Economics of Developing Countries, from the University of Cambridge, UK. Dr. Kale has a number of publications to her credit including chapters in edited volumes, papers in journals and regular articles published in Mint, Business Standard, Financial Express, The Indian Express and Outlook Money.

Arvind Panagariya is the Jagdish Bhagwati Professor of Indian Political Economy & Professor of Economics at Columbia University. In the past, he has been the Chief Economist of the Asian Development Bank and Professor of Economics and Co-director, Center for International Economics, University of Maryland at College Park. He has also worked with the World Bank, IMF, WTO and UNCTAD in various capacities. He holds a Ph.D degree in Economics from Princeton University. Dr. Panagariya has written or edited a dozen books. He is an editor of the India Policy Forum, a journal co-founded by the Brookings Institution, Washington DC and the National Council on Applied Economic Research, New Delhi. He is also the founding editor of the Journal of Policy Reform, which he edited with Dani Rodrik during 1996-2001. He is currently an Associate Editor of Economics and Politics and the Journal of International Trade and Economic Development. Panagariya writes a monthly column in The Economic Times.

Ila Patnaik works in the field of international macroeconomics and international finance in India and in some other emerging markets. On one hand, her research is about issues of business cycle stabilisation and the exchange rate regime in terms of macroeconomics. This has involved work on measurement of the exchange rate regime, and on the macroeconomic consequences of the exchange rate inflexibility which many developing countries have favoured. On the other, her research is about the international finance issues associated with the internationalisation of corporations in emerging markets. This leads into the use of microeconomic data for addressing macroeconomic issues such as exchange rate exposure and crisis propagation. In all these areas, she has worked on a combination of doing original research and writing academic papers, of getting involved in policy formulation in India, and in advocating sound policies in the Indian policy discourse.

Indira Rajaraman is presently Honorary Visiting Professor at the Indian Statistical Institute, Delhi and was a Member of the Thirteenth Finance Commission over its two-year term starting December 2007. She was awarded her Ph.D in Economics from Cornell University in January 1974. She taught for 18 years at the Indian Institute of Management in Bangalore. From 1994 until her retirement in 2007, she held the Reserve Bank of India Chair at the National Institute of Public Finance and Policy, Delhi, and the NABARD Chair for a year on deputation at the Institute of Economic Growth, Delhi. She has been a Visiting Scholar at Harvard and Stanford Universities on sabbatical, and has taught at the University of Illinois at Urbana-Champaign. Dr. Rajaraman’s research papers have been published in journals and books published by Elsevier, Springer Verlag, John Wiley, the Brookings Institution and Oxford University Press on a wide range of issues covering trade policy, rural labour markets, formal and informal financial institutions, and fiscal policy. She has disseminated her research by delivering talks at a number of institutions. Most recently, she was invited to speak at a conference on “Transparency in Financial Institutions” at Columbia University in April 2009 and at the annual conference of the European Union Development Network at Paris, on “Fragmentation in a Globalised World”, in December 2009. She has been active in policy formulation in India at national and state levels. She writes on policy issues in the financial press.

Hari Sankaran is the Managing Director & CEO of Infrastructure Leasing & Financial Services Limited (IL&FS). After completing his Masters in Economics from the London School of Economics, Sankaran developed a career in the areas of project finance, infrastructure development and management, regulation and public policy. His primary interest has been to understand the relationship between communities, infrastructure development and economic growth.

Ajay Shah works on fiscal, financial and monetary institutions with a focus on the new policy aspects associated with India’s rapid evolution into a high growth market economy, which is increasingly integrated into the world economy. His academic research has emphasised bringing analytical ideas and datasets about financial markets and firms to obtain fresh insights into questions of macroeconomic policy. In finance, he has worked on a domestic financial reform in the areas of banking, securities markets, derivatives and pension reform. In public finance, he has worked on a roadmap to fiscal consolidation in recent years, on the goods and services tax, and the establishment of the debt management office. He has begun work on Indian taxation of capital income and financial transactions in the context of cross-border finance. In all these areas, he has written policy papers, served as member of many of the critical expert commissions appointed by the Indian government in the last 15 years, and has been actively involved in translating ideas into action in the Indian policy landscape.

Arvind Subramanian is Senior Fellow jointly at the Peterson Institute for International Economics and the Center for Global Development, and Senior Research Professor at the Johns Hopkins University. He was Assistant Director in the Research Department of the International Monetary Fund. During his career at the Fund, he worked on trade, development, Africa, India and the Middle East. He served at the GATT (1988-1992) during the Uruguay Round of Trade Negotiations and taught at Harvard University’s Kennedy School of Government (1999-2000). He has written on growth, trade, development, institutions, aid, oil, India, Africa, the WTO, and intellectual property. He has published widely in academic and other journals. He has also published or been cited in leading magazines and newspapers. He has been interviewed on PBS’s Charlie Rose Show and is a columnist for India’s leading financial daily, Business Standard. His book, India’s Turn: Understanding the Economic Transformation, was published in 2008 (OUP). He is co-editor of Efficiency, Equity, and Legitimacy: The Multilateral Trading System at the Millennium (Brookings/Harvard University Press, 2002). He obtained his undergraduate degree from St. Stephens College, Delhi; his MBA from the Indian Institute of Management at Ahmedabad, India; and his M.Phil and D.Phil from the University of Oxford, UK.

S.S.Tarapore, Distinguished Fellow, Skoch Development Foundation, has a B.A. (Economics) from Sheffield University (1958) and M.Sc. (Economics) from London University (1960). He was awarded the degree of Doctor of Laws honoris causa from Sheffield University (1996). He joined the Reserve Bank of India in 1961 as Research Officer and retired in 1996 as Deputy Governor. He was on deputation from 1971-1979, first in the IMF Research Department and subsequently under the IMF Central Banking Service with the Bank of Mauritius as Advisor to the Governor. He has chaired a number of official committees including the Committee on Capital Account Convertibility (1997), the Unit Trust of India Inquiry (2001), the Committee on Procedures and Performance Audit of Public Services (2004-05) and the Committee on Fuller Capital Account Convertibility (2006). He was a member of the Committee on Banking Sector Reforms (1998) and the Advisory Group on Transparency of Monetary Policy (2000).


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