Corporate panchayats, feni, finance and fiscal deficits

Five articles that I enjoyed reading this week, and figured you might as well.

  1. “Nearly 80% of the village’s estimated 36,000 residents enrolled as members in the movement, which, at that point, was a non-governmental entity. They were all given an electronic card based on economic status. Several benefits, from free medical treatment to discounted groceries, were delivered based on this categorization, undertaken solely based on the company’s internal surveys.In 2015, probably for the first time, a corporate house directly entered the electoral arena in India. It was Kitex. Despite a unified opposition, Twenty20’s candidates won 17 of the 19 gram panchayat seats, cornering over 70% of the polled votes.”
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    A corporate panchayat in Kerla. This was fascinating on so many levels!
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  2. “Vaz begins the tour with an introduction to feni and its history. Considered Goa’s greatest spirit, this colourless clear liquid is said to date back centuries; some believe coconut feni predates the Portuguese capture of Goa. A potent drink with a strong aroma, it is made with coconut or cashew. The cashew feni possesses a Geographical Indication registration since 2009 as a speciality alcoholic beverage from Goa.”
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    On feni tourism.
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  3. “Fiscal Deficit represents Net Borrowings by the Government in a year. Difference between the Debt and Liabilities at the beginning and at the end of a Financial Year also represents Net Borrowings during the year. Fiscal Deficit should therefore equal change in the Debt and Liabilities during the Financial Year. All government expenditure, revenues and debts are required to be carried out through the Consolidated Fund of India (CFI). If it is done so, the fiscal deficit of the Government should equal to the additional debt incurred during the year, all recorded in the CFI.”
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    A 29 point essay on the state of India’s fiscal deficit and debt, by Subhash Chandra Garg. The excerpt is of the first point in its entirety, and the rest of the essay is about why 1. doesn’t quite work. Great read!
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  4. “But what have the Nifty stocks done? 10 years ago, the Nifty had a bunch of stocks. Let’s run a thought experiment. If you had invested an equal amount (Rs. 10,000) in every single Nifty stock in January 2010 and completely forgot about it, what would have happened?”
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    The excellent Deepak Shenoy being, as usual, excellent.
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  5. “After all, according to National Accounts Statistics (NAS) that produce the estimates for national income, consumer expenditure is around 60 per cent of the GDP. Investment (or gross fixed capital formation, to be precise) is about 30 per cent of the GDP, and its growth rate has plummeted to less than 1 per cent according to latest estimates. And while government expenditure has grown at a high rate (around 10 per cent), it is only about 10 per cent of the GDP. Accordingly, growth in investment and government spending contribute 1.3 percentage points to the overall GDP growth rate, and so to get an overall 5 per cent growth rate, consumer expenditure should be growing at higher than 5 per cent.”
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    The rest of this thought-provoking piece by Maitreesh Ghatak explains why a fiscal push will almost certainly be a bigger bang for the buck than the official data might show. Macroeconomics is hard!