1 day ago
Economists Say India Is Insulated From Rising US Yields
Economists discussed India’s economy at a meeting in New Delhi.
One economist said rising US bond yields have a limited direct effect on India.
That is partly because foreign investors own only a small share of India’s government bonds.
He said things happening inside India matter more for Indian bond yields.
He also said India is trying to buy fertiliser from a wider range of sources.
Another economist said subsidies can distort markets and that support should go directly to people who need it.
He said reforms can help lift economic growth.
But keeping growth strong over time is the bigger challenge, especially when global events cause disruptions.
Michael Debabrata Patra said foreign investors hold only 3% of India’s government bonds, limiting the direct effect of rising US yields.
Patra said global yield movements may influence Indian bond yields, but domestic factors are the main drivers.
He said India is diversifying its fertiliser import sources amid supply bottlenecks linked to conflicts in Ukraine and West Asia.
Arvind Virmani argued that subsidies are inefficient and support should be provided directly.
Virmani said reforms can raise growth to a higher level, but the challenge is sustaining that rate amid global disruptions.
- Who
- Economists Michael Debabrata Patra and Arvind Virmani, speaking at the 5th Kautilya Economic Conclave.
- What
- They discussed the effects of rising US bond yields, fertiliser supply risks, subsidies and sustaining India’s economic growth.
- Where
- New Delhi, on the sidelines of the 5th Kautilya Economic Conclave.
- When
- Saturday; no date was specified.
- Why
- The discussion addressed global economic uncertainty and the policy challenges facing India.
Key facts
- Foreign ownership of government bonds
- Foreigners hold about 3% of India’s government bond stock, according to Patra.
- Bond yields
- Patra said domestic factors are the primary drivers of Indian bond yields.
- Fertiliser imports
- Patra said India is diversifying its fertiliser import sources and markets.
- Subsidies
- Virmani favoured reducing product-specific subsidies and providing support directly.
- Growth
- Virmani said the challenge is sustaining a higher growth rate after reforms raise it.
- Event
- The 5th Kautilya Economic Conclave was held in New Delhi.
Quotes
Michael Debabrata Patra
Former Reserve Bank of India Deputy Governor and economist
“The history of growth tells you that you cannot keep raising it continuously. You undertake reforms, push growth to a higher level and then the challenge is sustaining that rate.”
thehansindia.com
“Reducing subsidies is a good thing. Subsidies should be given directly. Subsidies are an inefficient way of providing support because they distort the market.”
thehansindia.com
Sources
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