Fiscal policy strategy; Stock markets and cyberattacks; Perception measurement for the legal system; Electricity reform in Tamil Nadu; Trade and FDI in the 3rd globalisation

Strategic thinking in fiscal policy

The quiet interim budget announcement is a good time to go back to basics and think strategically about fiscal policy in India. My column in the Business Standard of 2 February, Strategic thinking in fiscal policy, emphasises two basic problems. A fiscal correction of about three percentage points of GDP is required, so as to get to sustained small primary surpluses in most years, and the financial repression needs to end.

Stock market response to cybercrime episodes

Does the Indian equity market care when information unfolds, about cybercrime attacks upon a listed company? Sayan Dasgupta, Renuka Sane and Karthik Suresh explore this question in Evaluating capital market responses to cybersecurity incidents in Indian listed companies, published on The Leap Blog on 10 January 2024. Their results suggest that in the 90-day period surrounding a cyberattack, there seems to be a mildly significant estimate with excess returns of about -8%.

Survey-based measurement for the legal system

Improving the working of the judicial branch requires the feedback loops of measurement leading to policy initiatives which are (in turn) evaluated for their impact. In the main, empirical legal research in India has relied on quantitative measures. Pavithra Manivannan, Susan Thomas and Bhargavi Zaveri-Shah come at the problem through survey-based measurement of the perception of litigants and lawyers. Their article is Survey-based measurement of Indian courts, published on The Leap Blog on 13 January 2024. This work suggests new pathways for legal research.

Electricity reform in Tamil Nadu

There is a remarkable natural resource off the coast of Tamil Nadu and Sri Lanka, in the form of offshore wind energy. But there are many hoops to jump in terms of institutional design, to get going on the enormous private investment required. Offshore wind in Tamil Nadu: from potential to reality by Akshay Jaitly, Charmi Mehta, Renuka Sane and Ajay Shah, The Leap Blog, 13 January, examines the present state of play, diagnoses how the policy strategy interferes with investibility, and offers solutions for policy makers.

Free electricity for agriculturists is an important impediment in electricity policy in India. There are natural opportunities with solar pumps. When solar panels give cash to farmers for electricity sold to the grid, ground water is conserved. Many claims are made in this field about economic feasibility, which are either (a) faulty on calculations or (b) make claims about India when they apply to only one place. Susan Das, Renuka Sane and I felt it was useful to do a first principles calculation, where every step is explicit, for one district (Erode in Tamil Nadu). We have put out a paper Solarisation in agriculture in Tamil Nadu: A first principles evaluation, 14 January 2024. This helps clarify the conditions under which free electricity can be replaced by a free solar panel (in Erode), and suggests similar careful work is required for each district.

Trade and FDI patterns in the Third Globalisation

In the third globalisation, the core imposes restrictions upon trade and FDI interactions upon countries where there is a lack of foreign policy and military alignment. My column in the Business Standard of 22 January, The reconfiguration of global trade and FDI draws on recent work at McKinsey Global Institute on measuring these changes, and thinks about the implications for firm strategy.