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Thursday, March 15, 2012

Top quotable quotes from the Economic Survey 2011–12

After Kaushik Basu's reign, the Economic Survey has become a work of art, with its colourful text, diagrams/boxes that would make any consultant proud. However, this year's survey exceeded some earlier heights with so many quotable quotes that I just HAD to write this post. As usual, bold text is my contribution with normal text from the survey.
  1. The fire fighting analogy when it comes to the economy, there is always a fire to fight. It is important to realize that if, however, all our time is spent fighting fires, it is likely that, in the long run, there will be more fires to fight because not enough time and effort would have been spent on research and development of non-flammable materials(Chapter II)
  2. The implementation focus flawed micro-foundations can devastate the best of macro intentions.(Chapter II)
  3. Explaining imprecise science Unlike some branches of economics, such as the theory of auctions, where economics provides hard and usable techniques akin to engineering principles, monetary and fiscal policies are part science and part intuition and common sense.(Chapter II)
  4. Where admitting ignorance is bliss-there are domains of economics where even researchers working at the frontline do not have consensus solutions. In such areas, to pronounce with certainty is to display ignorance (Chapter II)
  5. The antibiotics analogy to deficits While an expanded deficit can boost consumption and economic growth, this is medicine akin to antibiotics. It is very effective if properly used and in limited doses, but can cause harm if used over a prolonged period (Chapter II)
  6. Game-changer is an excessively used term but Aadhaar has the potential for being a game-changer for the Indian economy. (Chapter II)
  7. A financial crisis is like an early blockage in the piping system. To start with, we may be oblivious of it, but soon this leads to the taps going dry (Chapter II)
  8. In the context of high bank credit and low bond market perse calling for new measures Nations have idiosyncrasies—some grow relying on services, some on industry.Every such special feature should not be an excuse for policy intervention. (Chapter II)
  9. The fallacy of market price in PSU dominated sectors-think Coal India In a market where all dominant players are public-sector companies, ‘market price’ is not a very meaningful concept. It is easy for government to control state-owned companies through nods and winks  (Chapter II)
  10. Who really benefits from MSP inability of a large number of small and marginal farmers to directly access the agriculture market puts a question mark on increases in MSP actually benefiting such farmers (Chapter VII)
  11. Again critiquing the metrics-In a recent ranking of environmental performance (EPI 2012), India was placed 122 out of 132 countries.Like all such rating exercises, this one too has significant data and methodological problems (Chapter XII)
  12. On the importance of green development:- converting (depleting) abundant ‘dirty’ coal into clean electricity will represent a valid choice, provided the distribution of such benefits is more skewed towards the energy needs of poorer, unconnected households, and not if it is to meet subsidized energy needs of richer households, whether in urban or rural areas (Chapter XII)

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