Most analyses of accelerating inflation in India emphasise the role of "imported inflation" in driving Indian prices upwards. In this article, C.P. Chandrasekhar and Jayati Ghosh examine the trends in global markets that influence domestic price movements and their implications.

The issue of reservations in higher education in India has been a volatile issue which also has direct implications not only for public policy but also for the administration and functioning of academic institutions, not to mention the fate of a large number of students. This note is an attempt to add to the currently meagre empirical literature by analysing the available evidence on the actual extent of marginalisation and discrimination apparently faced by different categories in the population, based on the results of the most recent large National Sample Survey.

One global fall-out of the sub-prime crisis in the US is a liquidity squeeze that central banks in the developed countries are attempting to counter by pumping liquidity into the system and reducing interest rates. This is indeed paradoxical, since the crisis in the first place was a result of an excessive build up of liquidity in the international system, leading to a synchronized boom in stock and real estate markets across the globe. Explaining the paradox requires understanding how the liquidity spiral occurs and how such liquidity is put to use by a liberalized and globalized financial system.

China's growing presence in Africa has led to arguments that the country is seeking to meet its growing requirements of primary products, including oil, by building a relationship reminiscent of a colonial past with many African countries. In this article, the authors examine what the evidence reveals about this relationship.

The depreciation of the US dollar has been closely bound up with the movement of oil prices, as world oil trade is typically denominated in dollars. Yet this relationship may now be under threat as the dollar continues to depreciate and the US economy tips into recession. This article examines how oil prices have changed with different numeraires, and considers the implications for the future of the oil-dollar nexus.

With the US economy clearly tipping into recession, international attention is now focussed on the extent to which China and India can create an alternative growth pole for the world economy through their increasing demand. In this article, the authors assess the potential for China to play such a role by analysing its trade pattern with developing Asia.

Though the Finance Minister seems to have recently realized the folly of free and large capital inflows, the realization comes too late and offers too little in terms of solutions. He still seems to have an inadequate understanding of the problems that the capital surge has created and is still creating. Too late, because the Finance Minister looks unwilling to face the consequences of actions aimed at slowing, let alone arresting, capital inflows.

The Market Stabilization Scheme was launched in 2004 to sterilize the effects of foreign exchange reserve accumulation resulting from large capital inflows. While allowing the RBI to manage money supply in the face of an unprecedented surge in capital inflows, the scheme is increasing the interest burden the central government has to bear and reducing its fiscal maneuverability. It is time, therefore, to look to ways to regulate capital inflows rather than adapt to them argue C.P. Chandrasekhar and Jayati Ghosh.

There is much talk of a major boom in world exports, especially in this decade, yet the basic contours of this boom are rarely discussed. In this edition of MacroScan, C. P. Chandrasekhar and Jayati Ghosh consider the main trends in the pattern of export growth and analyse the implications for the developing world in particular.

At a time when reports of losses resulting from the subprime crisis are on the rise, a paradoxical surge in global stockmarkets is inducing an element of complacency. The worst is over, argue observers. C.P. Chandrasekhar and Jayati Ghosh take a longer view, and examine evidence on growth and volatility in the age of finance that suggests that the worst is perhaps not behind us.

Short-term migration for work has evidently increased rapidly in recent times in India, but our statistical systems are currently not adequate to capture such flows of labour. In this edition of MacroScan, C. P. Chandrasekhar and Jayati Ghosh discuss the limitations of the existing data, the tendencies that do emerge and the policy implications of short-term economic migration.

This paper discusses how a massive drive for converting agricultural land to non-agricultural use is taking place in the Third World in the recent phase of globalisation, driven chiefly by corporate capital and often by utilizing the instrument of state power. The first Section of this paper discusses the background of land transfer and the corporatisation of land with special reference to India, followed by a discussion on the nature of justice that the dispossessed receive when land is transferred to the corporate. The role of the state as the mitigator has also been discussed in this paper.

New evidence on the distribution of revenues in the IT sector points to the continued dominance of a few firms in this heterogeneous industry, despite rapid growth and expansion. In this edition of Macroscan, C.P. Chandrasekhar and Jayati Ghosh examine the factors that could explain such revenue concentration in a sector considered inherently competitive in structure because of low barriers to entry and rapid technological change.

As profits rise in developed and developing countries and the share of wages in value added falls, the clamour for reducing corporate tax rates only increases. Governments are warned of the danger of being shunned by FDI or of seeing their own capital migrate out in search of relative tax havens. The ''race to the bottom'' that this could set off, argue C.P. Chandrasekhar and Jayati Ghosh, would only increase the inequalising tendencies inherent in contemporary capitalism.

Neo-liberalism has spawned a more plausible division of the country into two ''nations'', a term that may not stand up to strict scrutiny under the canons of Marxist theory, but nonetheless contains a rich description, reminiscent of Lenin, of the Indian context. One of these two nations, the ''nation of the rich'', believes that it belongs to the first world, while the other, ''the nation of the poor'', remains stuck in the third world, experiencing agrarian crisis, unemployment, and privations on account of cuts in government expenditures, that pervade the entire third world.

While China is increasingly seen as ''the workshop of the world'' and there are fears of relocative shifts in manufacturing output and employment away from other countries to China, the recent pattern of manufacturing growth appears to have been characterised by declining employment. In this paper, the authors investigate the trends in manufacturing employment in China and consider the reasons for this paradox.

The recent phase of high economic growth in India has been associated with high savings and investment rates. This paper investigates the recent patterns in savings and investment and considers what this reveals about the nature of the growth process. It helps us to understand why the theme of ''two Indias'' is unfortunately so persistent and so plausible, at least in economic terms.

All eyes are directed at the US housing market that has been afflicted with a meltdown in its sub-prime mortgage segment. With housing asset values having driven the US economy, which in turn serves as locomotive for the rest of the world, fears are that this American disease could trigger a global slowdown. The assumption is that the original problem is quintessentially American. If it is not, the authors argue, the US experience can have other lessons for countries like India.

The enormous increase in the proportion and number of self-employed workers in India in recent years is still not adequately analysed. This paper looks at the conditions of self-employment in terms of perceptions of remuneration and work intensity. It is shown that the rising trend of self-employment reflects the precarious conditions of labour markets in India, where paid employment is simply not increasing fast enough to meet the needs of the growing labour force.

Continuing with the discussion on Basel II and India's banking structure, the authors argue that using external ratings to decide the appropriate risk-weights to assess capital adequacy inevitably leads banks to decide their lending patterns based on pure profit considerations. This makes it difficult to simultaneously implement a banking policy that seeks to direct a proportion of lending to specified sectors for meeting growth and equity objectives.

Despite the postponement of the target dates for banks to implement the Basel II guidelines, adjustments aimed at realizing that goal are underway. In this and the following article, the authors examine what the guidelines involve, their effects on banking structure and behaviour and some likely outcomes of implementing them.

The most recent data on employment suggest that employment growth in the first half of this decade has been rapid among urban women. This paper investigates the changing patterns of women's paid work in urban India and questions whether or not these trends can be seen as a sign of a vibrant dynamic economy undergoing positive structural transformation.

The rapid growth of output of organised industry is a frequently cited indicator of India’s current phase of dynamic growth. Yet such expansion has not been accompanied by employment growth along the lines expected. This paper considers the nature of recent growth in organised industry and the reasons why it has not generated more employment.

The stock market in Thailand collapsed after the government introduced limited market-based capital controls aimed at stalling the rapid appreciation of the Thai baht. The subsequent retreat by the government on the capital control measures raises serious questions about policy sovereignty in developing countries that have opened their financial markets to portfolio capital flows.

In a previous article analysing the latest NSS large survey on employment, it was noted that the recent employment growth has been dominated by self employment for men and self employment plus regular work for women. In this article, the authors investigate the conditions of employment, in particular remuneration for work. It is found that a large part of the increase in self-employment is a distress-driven phenomenon, led by the inability to find adequately gainful paid employment.

The results of the latest large sample survey, the 61st Round of the NSSO, on employment and unemployment have just been released. They suggest that there have been significant changes in the pattern of employment over the past five years. In the first of a set of articles, C.P. Chandrasekhar and Jayati Ghosh consider the broad employment trends in urban and rural India. Subsequent articles will deal with the conditions of employment, average wages, unemployment and specific issues relating to employment among the young population.

In this paper, the author discusses a distinct characteristic of the State under neo-liberalism; a transformation in its texture through a change in the nature of bureaucracy, State personnel and ''organic intellectuals''. However the social legitimacy of the State, under question as a fall out of the neo liberal economic policies, and consequently the stability of the Capitalist order will depend upon its identity of being a supra-social entity. The State will also try to regain lost social legitimacy by manufacturing some perceived enemy, in turn giving rise to jingoism, terrorism and parochial identities.

The scorching pace of expansion in the exports of hi-tech manufactured products from China and software and IT-enabled services from India, has supported the view that 'knowledge capital' plays a crucial role in the growing global presence of these countries. This paper discusses the empirical basis for that assessment.

The success of India in the global market for software services has encouraged the view that software is a competitive industry with limited barriers to entry and space for new and small players. In reality, however, US firms dominate the global software market with a high degree of concentration. The authors argue that some of the factors explaining this structure have implications for an assessment of the Indian industry.