ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Urjit R PatelSubscribe to Urjit R Patel

India and a Carbon Deal

There is now a growing consensus among governments that aggressive climate change mitigation is desirable, though they remain bitterly divided about how the associated burden should be shared. India's stand in climate negotiations, like that of most developing countries, has been largely negative. This paper examines the importance of a cap-and-trade mechanism as the keystone of a global mitigation agreement and estimates the cost of abating carbon in power generation in India, if and when carbon capture and sequestration technology becomes available for deployment. It concludes that India should be ready to reconsider its position and negotiate to join a mitigation treaty, say in 2020, if it can secure a fair deal.

Large Foreign Currency Reserves

This paper, while attempting to explain India's decision to accumulate high foreign currency reserves, also analyses the resulting political-economy consequences. It is argued that the reserves are both a form of insurance against adverse external shocks as well as compensation for the inability to address longstanding domestic economic problems, a relatively unexplored theme.

Outlook for the Indian Financial Sector

Striking a balance between increasing efficiency through competition in the Indian financial sector and moderating operating practices through effective regulation is the theme of this essay. Specific areas in dire need of further change are addressed. The outcome of these systemic changes will hopefully be a financial structure that moves India to a higher and stable growth trajectory, while remaining subject to stringent market discipline.

Good Central Banking

Central Banking in Developing Countries by Anand Chandavarkar; Macmillan Press, UK, 1996 and St Martin's Press, Inc, US, 1996; pp xiv + 289, THIS monograph is an excellent example of scholarly work embedded in thorough research, complemented by the author's experience as a central banker and an international civil servant. It genuinely deals with developing economies by continuously linking analyses and prescriptions to actual developments in various countries. Often, it is easier to deal with concepts, and then in the last couple of paragraphs of the chapter refer to country experiences. The author, com- mendably, does not take this easy route. I think the author's successful endeavour to effectively organise the subject of central banking with exceptional clarity will be enduringly important for central bankers, present and future, and students of money and banking. The governor-designate of the Reserve Bank of South Africa, who is serving a one-year apprenticeship under the present incumbent before he takes over, should keep this book at his bedside! The book's wider legacy is the singularly brilliant manner in which the author has woven together analytic economics, institutional and bureaucratic theory, public choice and political economy to present a comprehensive and coherent treatment of a subject that is inherently complicated. The list of objectives for central banking that is enunciated in the first chapter establishes the theme around which the rest of the book is organised. These include the conjunctural objectives of price stabilisation and exchange rate management; long-term objectives of establishing payments systems and financial infrastructure; and sectoral objectives including prudential supervision and deposit insurance. This list should be of considerable help to those who want to get a handle on the organising principles that underpin contemporary central banking. The monograph is successful in filling the gap in the literature between the institutional and theoretical developments pertaining to central banks in the developed economies and the challenges of achieving effective central banking in emerging or developing economies. The author provides an up to date framework for analysing most of the important issues, viz, monetary policy, exchange arrangements, regulation and supervision, developmental role, central bunk losses, organisational reform, informal finance and the holy grail of central bank independence.

Emerging Reforms in Indian Banking-International Perspectives

Emerging Reforms in Indian Banking International Perspectives Urjit R Patel This paper discusses some important reforms that will need to he implemented soon if Indian banking is to be put on a sound footing against a background of increasing global integration of the Indian economy (in both real and financial terms). The policies, drawing on international experience, are informed by the following objectives: (i) to enhance the flexibility of banks to respond effectively to changing circumstances (volatility); and (ii) to ensure the sustainability of the restitution of public sector banks. The measures discussed include maintaining a higher capital adequacy ratio; facilitating restructuring of the sector by formulating an exit and privatisation policy; implementing stricter and more transparent accounting and disclosure norms; and enhancing rule-based supervision.

Aspects of Pension Fund Reform Lessons for India

Aspects of Pension Fund Reform: Lessons for India Urjit R Patel Motivation for discussing an agenda for change in the Indian provident/pension fund system is provided by a compelling need to: (i) increase the number of people who have access to old-age financial security; (ii) enhance the flow of long-term institutional savings; and (iii) give a boost to the healthy development of financial markets. After analysing the present system in India, policy and regulatory changes needed to achieve the above goals on a long-term sustainable basis are put forward, The paper makes an attempt to draw some lessons from changes taking place in this sector elsewhere with the help of international case studies.

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