Articles by N R Bhanumurthy

Madhya Pradesh is a state that is "off-track" in achievement of most of the Millennium Development Goals, with wide variance on development outcomes between districts. This study examines the link between public expenditure, quality of governance and human development outcomes in the state, and finds that development expenditure by itself is insufficient in achieving human development at the district level. Public expenditure has better outcomes in districts with better governance indicators, indicating the need to focus on improving governance mechanisms as well as increasing development expenditure.

The present study investigates the relative importance of macro (interest rates, inflation, etc) and micro (order flows, information, etc) variables in determining the short-run exchange rate movements. Empirical analysis is based on a primary survey of the Indian foreign exchange dealers. It finds from a survey that a majority of the dealers feel short-term changes in the Indian rupee/US dollar market are basically influenced by the micro variables such as information flow, market movement, speculation, central bank intervention, etc. One of the findings of this study, which has policy implications, is that the dealers feel speculation would increase volatility, liquidity and efficiency in the market and, central bank intervention reduces volatility and market efficiency.

The current recovery is mostly engineered by the strong performance in agricultural output and comes after the poor performance of domestic industry last year. Much needs to be done to sustain this trend in the coming years. Most importantly, some of the structural bottlenecks that have been plaguing the domestic industry for so long need to be addressed and the long pending labour market reforms and ambiguities in the disinvestment process should be cleared soon. Measures to attract more FDI in the infrastructure sector and reduce the 'hanging investment' component will contribute to this continued recovery.