The Unassuming Economist

From a paper by Constantin Burgi, Shoghik Hovhannisyan, and Camilo Mondragon-Velez:

“Economic growth is often associated with welfare gains through job creation. However, the number and quality of new job opportunities created in a growing economy vary across countries and sectors, due in great part to changes in labor productivity. This paper provides estimates of country and sector-specific GDP-employment elasticities based on data from the past two decades, including an evaluation of the predictive power among alternative methodological approaches. The results show that employment elasticities of growth vary significantly across countries and sectors, but are in most cases below 1.0, implying that employment grows less than GDP due to increasing productivity. Across sectors, agriculture has mostly lower elasticity values, becoming negative for more than one-third of developing countries. In addition, increases in labor productivity are associated with reductions in informal employment. These empirical results are in line with the implications of a theoretical model about the relationship between GDP growth, job creation, and labor productivity in economies with varying levels of productivity and informality.”

From a paper by Akhilesh Kumar Sharma, and Sushil Kumar Rai:

“The empirical results from the applied models do not confirm an inverse relationship between output growth and the unemployment rate with an unexpected positive sign of Okun’s coefficient. The evidence of preference for more capital-intensive techniques in the Indian economy is also strongly supported by the results of the expanded form of Okun’s law with a statistically significant positive coefficient of GDP and labour productivity.”

From a book chapter by Matthew Cole:

“We live in a world where services dominate employment and form an ever-greater share of GDP. What does the relative decline of manufacturing and the rise of services mean for the present and future of work? There is much debate regarding this question. Recent advances in ICT infrastructure, datafication and artificial intelligence have allowed for a degree of technological substitution in service work that was previously impossible. This chapter argues that recomposition of capital at both the national and global scales has reorganised production and expanded production networks to place certain services as a crucial engine of growth. It proceeds by introducing the concept of services in the classical political economy and labour process tradition. It then addresses one of the key debates around the nature of services under capitalism and deindustrialisation. The chapter concludes that how technological and institutional change will impact the future of work will ultimately depend on the balance of power between capital and labour.”

From a paper by Claudio Borio:

“From its tentative beginnings, inflation targeting has spread to become the de facto global monetary standard. Historically, only the Gold Standard has had a longer lifespan. Inflation targeting has done its job: helping to hardwire a low-inflation regime, even in the face of the post-Covid inflation surge. But the journey has been far from easy. Inflation targeting had to contend with the rise of financial instability, most spectacularly in the form of the Great Financial Crisis. In the wake of that crisis, it struggled to push inflation back up to point targets, and it saw a historical erosion in the room for policy manoeuvre. This paper assesses these challenges and considers possible adjustments to the framework. These include more systematic consideration of the longer-term damage that financial factors can cause to the economy and of the importance of safety margins in the conduct of policy. And all this should be grounded on a clear recognition of what monetary policy can and cannot deliver.”

From a Keynote address by Mr Swaminathan J:

“Regional Director for Mumbai Regional Office, Shri Suman Ray; Regional Director for Nagpur Regional Office, Shri Sachin Shende; Chief General Manager, National Bank for Agriculture and Rural Development, Ms. Rashmi Darad; General Manager, Bank of Maharashtra and Convenor, SLBC Maharashtra, Shri R D Deshmukh; senior executives from banks, Lead District Managers (LDMs), Lead District Officers (LDOs) and my colleagues from Reserve Bank of India, present here.

Good morning, it is my proud privilege today to be addressing this Conference for Lead District Managers of Maharashtra.

Being here near Nagpur and that, too, for a Conference of the LDMs, it would be amiss of me if I am not reminded of Shri Baba Amte, whose Ashram is within a few kilometres. As you all would be aware he was one of the proponents of rural economy-driven growth. There is this one part of a quote attributed to him, which says, “A balanced economic system is one which provides sufficiency for all and superfluity for some-“

When you parse the quote, you will realise that the LDMs are facilitating the sufficiency of the rural economy. And balancing the economy by facilitating sufficiency for the rural economy rings as much true today as it must have been when it was said. When you look at the results of the Economic Survey, 2023-24, it is observed that Indian agriculture sector provides livelihood support to about 42.3 per cent of the population and has a share of 18.2 per cent in the country’s GDP at current prices.

So, with the rural economy thriving, the role of Lead Banks assumes a renewed emphasis. In fact, the aspirational goals that RBI has set for RBI@100 in a Multi-Year Time Frame, reiterates its focus on ‘Accessibility, Availability and Quality of financial services to all sections of the society’.

It is this underlying principle that had conceptualised the Lead Bank Scheme (LBS) in 1969. The Lead Bank is expected to assume a leadership role for coordinating the efforts of the credit institutions and the Government. And within this leadership role, the role of LDMs cannot be overstated.

As key pillars of the LBS framework, you hold the responsibility of extending banking services and credit to underserved regions, facilitating economic advancement, the results of which can be personally fulfilling. Having served as the Convenor of the SLBC in Telangana, I can attest to the deep satisfaction derived from the tangible impact created through LBS fora.

Over the years, the roles and responsibilities of the LDMs have evolved. But the underpinnings of these myriad objectives remain the same. Today I would like to highlight certain expectations that we have from the functioning of the LDMs. For easy recallability, I have attempted to give a different spin to the acronym – LDM – and identified three attributes viz., (L)iaison, (D)esigning and Development, and (M)onitoring and Motivating. I will now elaborate upon these.”

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