Turning point in private investment projects data; Carbon tax at the EU border

Turning point in private investment projects data

There were two episodes of torrid growth in India: in the mid 1990s and then in the late 2000s. After this last episode, private investment has subsided.

The value of private projects has been on a decline, in real terms, from 2011 onwards, In the recent period, it has reached a turning point and by early 2023 there are distinct signs of growth. My column in the Business Standard of Monday 29th, Better numbers in private investment projects, looks at this important good news about the economy and how it changes the possibilities for a third episode of torrid growth.

Carbon tax at the EU border

Carbon emission imposes negative externalities, which motivates a carbon tax. If one country introduces a carbon tax, this hampers production within the country when compared with polluting locations elsewhere. Hence a carbon tax always goes with a carbon border tax which is charged upon the carbon-content of imported goods.

The European Union’s `Carbon Border Adjustment Mechanism’ (“CBAM”) will kick in, for a few industries, on 1 January 2026, and firms exporting into the EU in these industries have to start submitting facts about their carbon content from 1 October this year.

This is an important development for India. On 1 May, Akshay Jaitly and I had written in the Business Standard with an Indian policy perspective on these developments. We then turned to thinking about this from the viewpoint of an Indian firm. Our reasoning is in a column and a video on the BloombergQuint.