Electricity subsidies are getting better; Lost a shock absorber; CMIE household survey data for electricity research; SEBI rules on market rumours; Episodes 45-49 of Everything is Everything
Electricity subsidies are getting better
In a column in the Business Standard on 26 May, Akshay Jaitly and I argue that it is politically more attractive to organise a subsidy in a transparent fashion, one which the recipient clearly sees. This is encouraging the rise of explicit on-budget electricity subsidies as opposed to the traditional, complex, within-sector tax-and-subsidise schemes. These developments help decouple political objectives (to be addressed using explicit on-budget subsidies at a Finance department) from electricity policy.
Lost a shock absorber
The exchange rate is a shock absorber. From October 2022 onwards, we are in a new phase of Indian monetary policy, with a highly inflexible exchange rate. This forces adjustments upon other parts of the economy. These ideas are in my column in the Business Standard on 12 May.
CMIE household survey data for electricity research
The CMIE household survey is a new phase in economic measurement in India. At the same time, it is good to triangulate, to skeptically assess all data. Susan Das, Renuka Sane and I set out to do this for the electricity expenditure at the household level, as measured in the CMIE household survey data, where we apply basic sanity checks to this data across four natural experiments of tariff or subsidy changes in Tamil Nadu. This gives The usefulness of the CMIE household survey data for electricity research in India, published on The Leap Blog, 8 May.
SEBI rules on market rumours
Should firms have to notice or respond to rumours? The quasi-legislative branch of SEBI increasingly wants to think about information as a controlled space. There are substantive and process deficiencies in recent SEBI initiatives on this, as argued in Concerns about recent developments on SEBI’s regulation-making on market rumours and insider trading by Bhavin Patel and Renuka Sane, The Leap Blog, 6 May.
Eps 45-49 of Everything is Everything
Ep 45: Beware these five fallacies.
Ep 46: Stay away from luxury beliefs.
Ep 47: India needs decentralisation.
Ep 48: Graduating to globalisation.
Ep 49: The art of podcasting.
I concur with the idea of explicit subsidy, and I was mulling about this in the context of pricing of water (incidentally another utility service).
What if - water pricing is made free, with explicit localities identified for a subsidised rate. Two things will be apparent - policymakers will be able to design a "positive list" to Target beneficiaries+ a ready figure to "manage" the subsidy burden for policy thinkers to grapple with.
This in my opinion will shift the Overton Window too.
An interesting idea to mull over is, by making the "unseen", seen it is easier to engineer a narrative