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Indian Journal of Agriculture Business 8(2):p 77-87, July-December 2022. | DOI: https://doi.org/10.21088/ijab.2454.7964.8222.5
Review Article
Behavioral Economics may be the Option for Growth Strategy: Myths and Reality Check on Indian Economy
Uttam Bhattacharyya, Associate Professor, Department of Economics (Rtd), Former Faculty, Institute of Development Studies, Kolkata 700064, West Bengal, India. null, Kamal Kumar Datta null, Uttam Bhattacharyya null
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Attribution-Non-commercial 4.0 International (CC BY-NC 4.0)Indian Journal of Agriculture Business 8(2):p 77-87, July-December 2022. | DOI: https://doi.org/10.21088/ijab.2454.7964.8222.5
How Cite This Article:
Kamal Kumar Datta, Uttam Bhattacharyya/Behavioral Economics may be the Option for Growth Strategy: Myths and Reality Check on Indian Economy/Indian Journal of Agriculture Business 2022;8(2):77–87.
Timeline
Received : July 01, 2022
Accepted : September 12, 2022
Published : November 10, 2022
Abstract
Developing countries have taken an enormous hit in terms of capital outflows, growing bond spreads, currency depreciations and lost export earnings, including from falling commodity prices and declining tourist revenues. Lacking the monetary, fiscal and administrative capacity to respond to this crisis, the consequences of a combined health pandemic and a global recession will be catastrophic for many developing countries and halt their progress towards the Sustainable Development Goals. In line with the government’s stated policy of Aatmanirvar Bharat or self reliance, Indian will integrate its rich economic and spiritual heritage with modern economic ideas for ethical wealth creation through a marriage of the invisible hand of the market with the hand of trust. We must recognise that wealth creation is a collective process and that market outcomes are the product of how these various “wealth creators” interact. We must drop the false dichotomy of governments versus markets and begin to think more clearly about the market outcomes we want. Public investments should be the mission oriented, instead of focused on “facilitating” or “incentivizing” business. Policy should actively shape and create markets, not just fix them when they go wrong. Fiscal and monetary policy will be important, but only if coupled with the creation of opportunities in the economy. Money creation, through quantitative easing, will not fuel the economy if the new money ends up in banks that do not lend. And when businesses do not see opportunities, interest rates stop affecting investment. Until the 1980s, productivity increases were accompanied by wage increases and rising living standards. This link was broken by a drop in labour’s negotiating power and companies’ increased financial orientation. The farm sector is likely to register positive growth even as the rest of the economy (barring the government sector) contracts. Federal structure will be the key for effective corporate governance and hence should be more involved in innovation policy, pressing for investments in education and training the long run drivers of wages. By generating a virtuous cycle where private investment, wage and employment growth as well as consumption feed into each other. The rise in agricultural activity, coupled with higher allocations to the MGNREGA also appears to have led to a sharp drop in rural unemployment as observed in the CMIE data. However, healthy growth of the farm sector, even if it continues, is unlikely to offset the economic losses suffered
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This research received no funding.
Author Contributions
All authors contributed significantly to the work and approve its publication.
Ethics Declaration
Provide information related to the Ethics Committee approval with approval number OR write, This article does not involve any human or animal subjects, and therefore does not require ethics approval.
Acknowledgements
We would like to express our gratitude to the patients, their families, and all those who have contributed to this study.
Conflicts of Interest
The authors report no conflicts of interest in this work.
About this article
Cite this article
Kamal Kumar Datta, Uttam Bhattacharyya/Behavioral Economics may be the Option for Growth Strategy: Myths and Reality Check on Indian Economy/Indian Journal of Agriculture Business 2022;8(2):77–87.
Licence:
Attribution-Non-commercial 4.0 International (CC BY-NC 4.0)| Received | Accepted | Published |
|---|---|---|
| July 01, 2022 | September 12, 2022 | November 10, 2022 |
DOI: https://doi.org/10.21088/ijab.2454.7964.8222.5
Keywords
EmploymentFiscal PolicyGovernment PolicyGSTMGNREGAInfrastructurePM-KISANTBI.Fiscal PolicyGovernment PolicyGSTMGNREGAInfrastructurePM-KISANTBI.Search for Similar Articles
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Timeline
| Received | July 01, 2022 |
| Accepted | September 12, 2022 |
| Published | November 10, 2022 |