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Does a strong currency mean a strong economy?

by Anupam Manur & Varun Ramachandra

Exchange rates have negligible connection with the strength of an economy. Instead, it is determined by trade performance, capital inflows or an arbitrary number chosen by the central bank.

In their book The Dollar Crisis, Paul Simon and Ross Perot famously said that “A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation”. The quote was mentioned in the larger context of American military and economic might, but the feelings espoused in the quote are shared by many. For instance, this article in the Economist describes the feeling of despair amongst the citizens of Hong Kong when the value of their currency (Hong Kong dollar) slipped below that of Mainland China (Yuan). Politicians, central bankers, economists, and policy makers often share the ‘blame’ for a weak currency. But is a ‘weak’ currency truly an indicator of a ‘weak’ economy? Consequently does a ‘strong’ currency necessarily imply a ‘strong’ economy? This post aims to answer these questions.

The strength of a currency, in economic terms, implies the price (or the exchange rate) of one currency in terms of another foreign currency; this is usually measured with respect to the US Dollar, which is considered as the world’s reserve currency. (We will discuss why the US dollar is the world’s reserve currency in our next post). An exchange rate higher than one implies that the currency is stronger than the dollar and an exchange rate lesser than one implies that it is weaker.

The strength of an economy is measured by various means and the most used measure is the value of its Gross Domestic Product (or GDP).  The GDP measures the level of economic activity within a country and is the final monetary value of all the finished goods and services produced. It is a comprehensive measure of economic strength of a country[1]. The table below illustrates the metrics discussed thus far.


Source: GDP, GDP per capita and the ranks from IMF database. Exchange rate is obtained from IMF and XE.com

Note on exchange rate rank:  It is obtained by sorting, in ascending order, the dollar value of domestic currencies. This is a metric derived purely for understanding the ideas discussed in this post and is not a robust measure.

Note on US$, per unit: This number indicates the number of US dollars that can be bought using the domestic currency. Example, exchange rate of 0.0160 for India means that one Indian rupee can buy 0.016 US dollars.

It is clear from the table that China, India and Japan are the second, third and fourth largest economies in the world, but their currencies are relatively weak. In fact, the per-capita GDP and exchange rates are also not comparable variables.


According to economics textbooks, the exchange rate is determined by the demand and supply for a currency relative to another foreign currency. This exchange rate arises out of three major factors:

First, the demand for a currency comes from people acquiring more of a particular currency to pay for foreign goods that they wish to buy (imports). Therefore, the exchange rate is determined by the volume of exports and imports of a country. If a country exports more than it imports, the demand for the exporter country’s currency and its exchange rate rises. Generally, an exporting country would want all or some of its payments made to it in its local currency, which would increase the demand for its currency.

Second, the demand for currencies arises from the financial markets and interest rate regimes. London is the one of the biggest financial centres — measured in terms of the volume of foreign exchange turnover– in the world and hence there is high demand for the Pound Sterling, as is the case with Swiss Francs. Further, countries with higher interest rates normally tend to have stronger currencies, as investors hope to get higher returns on their investments. A high interest regime encourages conversion into these local currencies and helps attain larger returns.

Third, it is in the interest of certain countries to have a weaker currency. A weaker currency will make exports cheaper and imports expensive giving these countries a competitive edge in the world market. Thus, the central banks and governments of different countries deliberately try to have a weaker currency.

The three factors discussed are not comprehensive and do not possess equal weightage; the eventual exchange rate dynamics depends on several other parameters.

Market determination of exchange rate does completely explain the exchange rate determination. There are more exceptions to this than adherents. For example, the Bahamian Dollar is exactly on par with the US dollar, despite playing a negligible role in world trade. This is due to the fact that the central bank of Bahamas has artificially pegged its currency 1:1 with the US dollar. That is even an infinitesimal change in the US dollar is directly reflected in the Bahamian dollar. Currency pegging (either 1:1 or some other predetermined ratio) is done by many countries to maintain stability. For example, Nepal and Bhutan have pegged their currency to the Indian rupee.

In conclusion, it is flippant to estimate the strength of an economy solely through the value of a currency. The strength of an economy is dependent on several variables that exhibit multi-causal relationship amongst themselves. Exchange rate have negligible connection with the strength of an economy. Instead, it is determined by trade performance, capital inflows or an arbitrary number chosen by the central bank.


[1] For simplicity, this post considers the GDP as the measure of strength of economy; to eliminate large country/ population bias we must consider the per-capita GDP (total GDP divided by the population) to arrive at a precise figure. Countries like India rank high in terms of GDP but, thanks to its population, rank much lower in per-capita GDP. Kuwait, on the other hand, ranks high in terms of per-capita GDP.

Anupam Manur is a Policy Analyst at Takshashila Institution  and can be found on twitter @anupammanur

Varun Ramachandra is a Policy Analyst at Takshashila Institution and can be found on twitter  @_quale


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Repo Rates

by Anupam Manur & Varun Ramachandra

The Repo rate is the interest rate at which the Reserve Bank of India lends to commercial banks.

A cursory glance at the business section of newspapers shows us the concern or elation every time the Reserve Bank of India (RBI) hikes or reduces the Repo rate. Commonly called policy rates outside of India, a change in the repo rate can result in an upswing or downswing of markets.  The obvious questions in the minds of most readers are how does this impact our daily lives and is this the same interest rate that commercial banks levy on us? This article attempts to answer these questions and will hopefully leave the reader with a basic understanding of the significance of repo rates.

The Repo Rate:

The Repo rate (Repo is an acronym for repurchase) is the interest rate at which the RBI (Reserve Bank of India) lends to commercial banks.

The central bank of a country  is usually an independent institution that is set up with the specific intention of maintaining the stability of price and total outputin the economy ( this article will focus on the former). Price stability would result in consistent, and hopefully low, levels of inflation in an economy. Inflation, as Ludvig Von Mises describes it, is an increase in the quantity of money without a corresponding increase in the demand for cash holdings. High inflation leads to people having to spend more money to obtain the same amount of goods and services. The point to note here is that money, like all other commodities, is governed by the principles of demand and supply.

The RBI utilises several mechanisms to maintain price stability but its primary tool is the repo rate.  This  rate, which is charged by the RBI, is different from the interest rates charged by commercial banks.  In a commercial bank, if the interest levied is 8%, a loan of Rs. 50,000 would result in an interest sum of Rs. 4,000 after one year. So, the loaner, usually an individual or business, has to pay back Rs. 54,000 to the bank at the end of the year. The RBI however, does not lend to individuals or businesses, it instead lends to commercial banks in certain circumstances; central banks are usually referred to as the lenders of the last resort. The repo rate is the interest at which the RBI grants short term loans (15 days) to commercial banks facing shortage of funds.

Commercial banks borrow from the RBI on a regular (daily) basis, which explains the high influence of the repo rate. In the week of Mar 15 – Mar 20, 2015, commercial banks in India borrowed Rs.72,672 crores from the RBI at 7.75% rate of interest.

Repo Rate

Fig: Repo rates from March 2004

 Transmission Mechanism:

Hypothetically, if the RBI lowers the repo rate from 8.0% to 7.5%, commercial banks can borrow from the RBI at a cheaper rate. As the RBI has decreased the cost of borrowing for commercial banks, the demand for money will increase; as commercial banks can now borrow more money they can use these funds to lend more money to its customers. In essence, by cutting the repo rate the RBI increases the supply of money (the liquidity) in the market. Commercial banks will now have the maneuvering capability to decrease the lending and deposit rates charged to customers. A cut in the lending rate will induce more people to borrow while a cut in the deposit rate will induce people to save less and spend more. Both these mechanisms result in an increase of the disposable incomes of individuals, which further leads to increased consumer spending.  This sequence of events may not necessarily happen all the time, but a change in the repo rate generally gives the banks an impetus to act in the direction of the rates.

However, it must be kept in mind that a change in the repo rate by the RBI can also impact the exchange rate of the rupee. With all other factors remaining the same, a cut in the repo rate can lead to the depreciation of the rupee and vice versa. A fall in the repo rate can make most rupee denominated financial assets less attractive to investors than foreign currency denominated assets. The rate of return on most financial assets in a country will be tied to the interest rates (government bonds, equity, etc). Thus, when the repo rate decreases, the rate of return to the foreign investors also decline. This will precipitate a decrease in inflow of foreign currency into the economy, thereby reducing the demand for rupees which will cause the rupee to depreciate. The fallout of this is that imports become more expensive and the prices of exports go down.

A change in the repo rate can cause an increase or decrease in the supply of money in the markets, which has profound implications on the lives of people as this directly impacts the price of goods and services that we consume on a daily basis.

Anupam Manur is a Research Associate at Takshashila Institution  and can be found on twitter @anupammanur

Varun Ramachandra is a Policy Analyst at Takshashila Institution and can be found on twitter  @_quale



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Opportunity Cost

ಹಿಂದಿನ ಅಂಕಣದಲ್ಲಿ scarcity, trade-off ಹಾಗು innovation ಬಗ್ಗೆ ಬರೆದಿದ್ದೆ, ಈಗ trade-off ಮಾಡುವಾಗ ನಾವು ಯಾವ ಆಧಾರದ ಮೇಲೆ ಮಾಡಬೇಕು ಎಂದು ಗಮನಿಸೋಣ. ಮೊದಲು ಒಂದು ಕಾಲ್ಪನಿಕ ಸ್ಥಿತಿಯನ್ನು ಕಲ್ಪಿಸಿಕೊಳ್ಳೋಣ. ಮಂಜುನಾಥನು ತನ್ನ ಇಂಜಿನಿಯರಿಂಗ್ ಪದವಿಯನ್ನು ಪಡೆದಿರುವನು, ಆತನಿಗೆ “ಮಾಹಿವ್ಯವಸ್ಥೆ Technologies”ನಲ್ಲಿ ಒಂದು ಕೆಲಸ ದೊರಕಿದೆ, ಇಲ್ಲಿ ಒಂದು ವರ್ಷಕ್ಕೆ ೪ ಲಕ್ಷ ರುಪಾಯಿ ಸಂಬಳ . ಇದರೊಟ್ಟಿಗೆ ಜಾಂಬಿಯ  ದೇಶದಲ್ಲ್ಲಿಸ್ನಾತಕೋತ್ತರ(post – graduate) ಪದವಿ ಓದಲು ಸ್ಥಾನ ದೊರಕಿದೆ. ನೀವು ಮಂಜುನಾಥನ ಸ್ಥಿತಿಯಲ್ಲಿ ಯಾವುದನ್ನು ಆಯ್ಕೆ ಮಾಡುತ್ತಿದ್ದಿರಿ?

ಈ ಪ್ರಶ್ನೆಯ ಉತ್ತರವನ್ನು ನೋಡುವ ಮುನ್ನ, ಅರ್ಥಶಾಸ್ತ್ರದ ಒಂದು ಸಾಮಾನ್ಯ ನಿಯಮವನ್ನ ಅರ್ಥೈಸಿಕೊಳ್ಳೋಣ

Optimisation principle — ಮನುಷ್ಯನು ತನಗೆ ಇರುವ ಸೀಮಿತ ಸಂಪನ್ಮೂಲಗಳಲ್ಲಿ, ಯಾವುದು ಶ್ರೇಷ್ಠವೋ ಅದನ್ನೇ ಆಯ್ದುಕೊಳ್ಳುವ ಪ್ರಯತ್ನ ಮಾಡುವನು.

ಸಾಮಾನ್ಯವಾಗಿ ಅರ್ಥಶಾಸ್ತ್ರದ ಅಧ್ಯಯನದಲ್ಲಿ ಇದನ್ನು ನಾವು ನಿಜವೆಂದು ಭಾವಿಸಿ ಮುಂದುವರೆಯುತ್ತೇವೆ . ಮನುಷ್ಯನು ಇಷ್ಟೊಂದು ಆದರ್ಶ ಜೀವನ ನಡೆಸುವನೆಂದಲ್ಲ ಇದರ ಅರ್ಥ, ಇದು ಕೇವಲ ಅಧ್ಯಯನದ ಸರಳತೆಗಾಗಿ ಮಾಡಿಕೊಂಡ ಊಹೆ*.ಯಾವುದೇ ಒಂದು ವಿಷಯವನ್ನ ನಾವು first-principlesನಿಂದ ಓದಲು ಹೊರಟರೆ, ಹೀಗೆ ಹಲವಾರು ideal assumptions ಮಾಡಬೇಕು. ಇದರಿಂದಲೇ ನಾವು ವಿಷಯವೆಂಬ ಕಟ್ಟಡದ  ಪಾಯ ಕಟ್ಟಲು ಸಾಧ್ಯ.

“ಏನೋ ಒಂದು ವಸ್ತು ಬೇಕಾದರೆ ಅದಕ್ಕೆ ಪರ್ಯಾಯವಾಗಿ ಮತ್ತೊಂದು ವಸ್ತುವನ್ನು ತ್ಯಜಿಸುವೆವು. ಇದನ್ನೇ ಅರ್ಥಶಾಸ್ತ್ರಜ್ಞರು (economists) “trade-off” ಎಂದು ಕರೆಯುತ್ತಾರೆ.  ತ್ಯಜಿಸುವ ವಸ್ತು ಹಣವಿರಬಹುದು, ಸಮಯವಿರಬಹುದು ಅಥವ ನೈಜ ಸ್ವರೂಪದ ವಸ್ತುವೇ ಆಗಿರಬಹುದು.” ಎಂದು ಹಿಂದಿನ ಅಂಕಣದಲ್ಲಿ ನೋಡಿದ್ದೆವು. ಹೀಗಿದ್ದಲ್ಲಿ ನಾವು ಯಾವುದಾದರು ವಿಷಯದಲ್ಲಿ trade-off ಮಾಡಬೇಕಾದರೆ, ಆ trade-offನಿಂದ ನಮಗೆ ಒಳ್ಳೆಯದನ್ನೇ ಆಯ್ದುಕೊಳ್ಳುವುದು optimisation principleಗೆ ಅನುಗುಣವಾಗಿದೆ. ಆದರೆ trade-off ಮಾಡುವಾಗ ಏನನ್ನು ಪರಿಗಣಿಸಬೇಕು? ಸಾಧಾರಣವಾಗಿ ನಾವು ಕೇವಲ ಮೊತ್ತ(price) ನೋಡಿ ನಿರ್ಧರಿಸುತ್ತೇವೆ, ಇದು ಒಳ್ಳೆಯದೇ, ಆದರೆ ನಾವು ಮೊತ್ತವನ್ನ ತುಲನಾತ್ಮಕವಾಗಿ ನೋಡಬೇಕು . ಹೀಗೆ ನೋಡುವಾಗ “opportunity cost” ನಮಗೆ ಅದರ ಉತ್ತರವನ್ನ ನೀಡುತ್ತದೆ .

“Opportunity cost” ಎಂದರೆ ನಾವು ಒಂದನ್ನ ಪಡೆಯಲು ಇನ್ನೋದನ್ನು ತ್ಯಜಿಸಿರುವ ವಸ್ತುವಿನ  ಮೌಲ್ಯ. ಈ ಅಂಕಣವನ್ನ ಬರೆಯಲು ಸುಮಾರು ೧ ಘಂಟೆ ವಿನಿಯೋಗವಾಗಿರಬಹುದು, ಈ ಸಮಯದಲ್ಲಿ ಒಂದು tv ಕಾರ್ಯಕ್ರಮವನ್ನು ನೋಡಬಹುದಿತ್ತು,  ಅದನ್ನ ನೋಡುವಾಗ ಸಿಗುವ ಲಾಭ(ಅಥವ ಹಿತ)ವೇ ಈ ಅಂಕಣ  ಬರೆಯುಯುವುದರ “Opportunity cost”.

ನಾವು ಯಾವುದೇ ಕಾರ್ಯ ಚಟುವಟಿಕೆ ನಡೆಸಿದರೂ ಅದಕ್ಕೆ “opportunity cost” ಇರುವುದು. ಹೀಗೆ ಯೋಚಿಸುವುದು ಮೊದಲಿಗೆ ಸ್ವಲ್ಪ  ಕಷ್ಟವಾಗಬಹುದು, ಆದರೆ ಹೀಗೆ ಯೋಚನೆ ಮಾಡಿದರೆ ನಾವು ಉತ್ತಮ trade-off ಗಳನ್ನ ಪಡೆಯಬಹುದು. ಮತ್ತೊಂದು ಸರಳ ಉದಾಹರಣೆ: ಒಬ್ಬ ಗಣಿತ ಹಾಗು ವಿಜ್ಞಾನದ ವಿದ್ಯಾರ್ಥಿಯು ಸಮಯವನ್ನ ಕೇವಲ ವಿಜ್ಞಾನವನ್ನು ಓದಲು ವಿನಿಯೋಗಿಸಿದರೆ, ಗಣಿತವು opportunity cost ಆಗುತ್ತದೆ. ಹೀಗೆಯೇ Opportunity costನ  ತತ್ವವನ್ನು ಮನಸ್ಸಿನಲ್ಲಿಟ್ಟುಕೊಂಡು ಮಂಜುನಾಥನು(ಮೊದಲ ಪ್ಯಾರ) ಏನು ಮಾಡಬಹುದು ಎಂದು ಓದುಗರು commentನೀಡಬೇಕೆಂದು ಇಲ್ಲಿ ಯಾಚಿಸುತ್ತೇನೆ.  ಇದರೊಂದಿಗೆ  opportunity cost, ideal assumption ಇತ್ಯಾದಿ ಆಂಗ್ಲಪದಗಳ ಸರಳ ಕನ್ನಡ ಅನುವಾದನ್ನು ತಿಳಿದಿದ್ದಲ್ಲಿಯೂ commentಮಾಡುವುದಾಗಿ  ಕೇಳಿ ಕೊಳ್ಳುತ್ತೇನೆ.


ವರುಣ ರಾಮಚಂದ್ರ ತಕ್ಷಶಿಲಾ ಸಂಸ್ಥಾನದಲ್ಲಿ ನೀತಿ ವಿಶ್ಲೇಷಕ. Twitterನಲ್ಲಿ  @_quale


* ನಾವು ಬಹಳಷ್ಟುಸಲ ಹೀಗೆ ವರ್ತಿಸುವುದಿಲ್ಲ. ಮನುಷ್ಯನು ಈ ತರಹದ ಆದರ್ಶಗಳನ್ನ ಪಾಲಿಸುವುದಿಲ್ಲವೆಂದೇ ಅರ್ಥಶಾಸ್ತ್ರಜ್ಞರು behavioural economics ಎಂಬ ವಿಷಯದ ಮೇಲೆ ಸಂಶೋಧನೆ ನಡೆಸುತ್ತಾರೆ



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ಅಭಾವ – ಅರ್ಥಶಾಸ್ತ್ರದ ಮೊದಲ ಪಾಠ

The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

– Thomas Sowell

ಇತ್ತೀಚಿಗೆ ದೆಹಲಿ ಸರ್ಕಾರವು ೪೦೦ ಯುನಿಟ್ ವಿದ್ಯುತ್ ಹಾಗು ೨೦,೦೦೦ ಲೀಟರ್ ನೀರನ್ನು ಉಚಿತವಾಗಿ ನೀಡುವ ಘೋಷಣೆ ಮಾಡಿತು. ಇದು ಒಳ್ಳೆಯ ನೀತಿಯೋ ಅಲ್ಲವೋ? ನಾವು ದಿನನಿತ್ಯ ಈ ತರಹದ ಹಲವಾರು ಆರ್ಥಿಕ ಸುದ್ಧಿಗಳನ್ನ ಓದುತ್ತೇವೆ, ಈ ಸುದ್ಧಿಗಳ ಬಗ್ಗೆ ನಮ್ಮೆಲ್ಲರಿಗೂ ಏನಾದರೂ ಒಂದು ಅಭಿಪ್ರಾಯವೂ ಇರುತ್ತದೆ, ಆದರೆ ಈ ಅಭಿಪ್ರಾಯದ ಹಿಂದೆ ಧೃಢವಾದ ವಿದ್ವತ್ತು ಇರುವುದು ಬಹಳ ಕಡಿಮೆ.  ಕೇವಲ ಪ್ರೌಢ ಶಾಲೆಯವರೆಗೆ  ಓದು-ಬರಹ ಮಾಡಿದ್ದರೂ ಒಬ್ಬ ಕ್ರಿಕೆಟಿಗನ ಬ್ಯಾಟ್ಟಿಂಗ್ ಸರಾಸರಿಯನ್ನು(Average)  ನೋಡಿದರೆ ನಮಗೆ ಸಹಜವಾಗಿಯೇ ಅದರ(ಸರಾಸರಿಯ) ಅರ್ಥ ತಿಳಿಯುವುದು ಆದರೆ ಅರ್ಥಶಾಸ್ತ್ರ(Economics)ದ  ಬಗ್ಗೆ ನಮ್ಮ ಜ್ಞಾನವು ಅಷ್ಟು  ಸ್ಪುಟವಾಗಿಲ್ಲ.  ಇದಕ್ಕೆ ನಮ್ಮ ಶಾಲೆಗಳಲ್ಲಿ  ನಾವು ಅರ್ಥಶಾಸ್ತ್ರವನ್ನ ಕಡೆಗಣಿಸಿರುವುದೇ ಕಾರಣ. ಅರ್ಥಶಾಸ್ತ್ರವೆಂದೊಡನೆ ನಾವು ಮೊದಲ ಪಂಚವರ್ಷೀಯ ಯೋಜನೆ, ಎರಡನೆ ಪಂಚವರ್ಷೀಯ ಯೋಜನೆ ಇತ್ಯಾದಿಗಳಬಗ್ಗೆ ಓದುತ್ತೇವೆ.  ನಿಜಹೇಳಬೇಕೆಂದರೆ ಇದು ಅರ್ಥ ಶಾಸ್ತ್ರವಲ್ಲ, ಇದು ಅರ್ಥ ಶಾಸ್ತ್ರದ ಇತಿಹಾಸ (Economic History). ಅರ್ಥಶಾಸ್ತ್ರದ ಮೂಲಭೂತ ತತ್ವಗಳನ್ನು ಕ್ರಮವಾಗಿ ಓದುವುದು ಗಣಿತ, ವಿಜ್ಞಾನ ಹಾಗು ಭಾಷೆಗಳನ್ನು ಓದುವಷ್ಟೇ ಮುಖ್ಯ.

ಅರ್ಥಶಾಸ್ತ್ರದ ಮೊದಲ ಪಾಠ “ಅಭಾವ ”(Scarcity). ನಮ್ಮ ಜಗತ್ತಿನಲ್ಲಿ ಸಂಪನ್ಮೂಲಗಳ(resources) ಅಭಾವ  ಅನಾದಿಕಾಲದಿಂದಲೂ ಇದೆ. ಸಂಪನ್ಮೂಲಗಳ ಅಭಾವ  ಇದ್ದರೂ ನಮಗೆ ಅನಂತ ಬಯಕೆಗಳು(infinite wants).ಈ ಅಭಾವ -ಬಯಕೆಗಳ ಬಗ್ಗೆ ಯೋಚಿಸುವ ಗುಣ ಮಹತ್ವಾಕಾಂಕ್ಷೆಯುಳ್ಳ ಮನುಷ್ಯನ ಲಕ್ಷಣ. ಹೀಗಿರುವಾಗ, ಮನುಷ್ಯನು ಅಭಾವದ ಸಮಸ್ಯೆಯನ್ನು ಹೇಗೆ ಬಗೆಹರೆಸಿರುವನು? ನಮಗೆ ಅರಿವಿಲ್ಲದೆಯೇ ನಾವು ಈ ಸಮಸ್ಯೆಯನ್ನು ಪರಿಹರಿಸುತ್ತಿದ್ದೇವೆ, ಏನೋ ಒಂದು ವಸ್ತು ಬೇಕಾದರೆ ಅದಕ್ಕೆ ಪರ್ಯಾಯವಾಗಿ ಮತ್ತೊಂದು ವಸ್ತುವನ್ನು ತ್ಯಜಿಸುವೆವು. ಇದನ್ನೇ ಅರ್ಥಶಾಸ್ತ್ರಜ್ಞರು (economists) “trade-off” ಎಂದು ಕರೆಯುತ್ತಾರೆ.  ತ್ಯಜಿಸುವ ವಸ್ತು ಹಣವಿರಬಹುದು, ಸಮಯವಿರಬಹುದು ಅಥವ ನೈಜ ಸ್ವರೂಪದ ವಸ್ತುವೇ ಆಗಿರಬಹುದು. ಗಮನವಿರಲಿ ಇದು ಅಧುನಿಕ ಸಮಾಜದ ಕಥೆಯಲ್ಲ, ನಮಗೆ ಹಿಂದೆಯೂ ಸಂಪನ್ಮೂಲಗಳ ಅಭಾವ ಇತ್ತು ಮುಂದೆಯೂ ಇರುತ್ತದೆ.

ಅಭಾವವು ವ್ಯಾಪಕವಾಗಿ ಹರಡಿರುವ ಕಾರಣದಿಂದಲೇ ನಮ್ಮಲ್ಲಿ ಸ್ಪರ್ಧಾತ್ಮಕಭಾವನೆಯೂ ಬಂದಿರುವುದು. ನಮಗೆ ಬೇಕಾದುದನ್ನು ನಾವು ಪಡೆಯಬೇಕೆಂದರೆ ಇನ್ನು ಹಲವಾರು ಜನರನ್ನ ಮೀರಿಸಿಯೇ ಪಡೆಯಬೇಕು, ಇದು ಪ್ರಕೃತಿಯ ನಿಯಮ.    ಈ ಸ್ಪರ್ಧಾತ್ಮಕಭಾವವು ಕಠೊರವೆನಿಸಬಹುದು, ಆದರೆ ನಾವು ನಮ್ಮ ಸುತ್ತಮುತ್ತಲ ಜನರನ್ನ ಹಾಗು ಅವರ ನಡೆಯನ್ನ  ಗಮನಿಸಿದರೆ ಇದರ ಬಹಳಷ್ಟು ಉದಾಹರಣೆಗಳು ಗೋಚರವಾಗುವುದು.  ಈ ನಿಟ್ಟಿನಲ್ಲೇ ನಾವು innovation ಕಡೆ ಸದಾ ಗಮನ ವಹಿಸುತ್ತೇವೆ. ಸಣ್ಣಪುಟ್ಟ ಸುಧಾರಣೆಗಳನ್ನ ನಮ್ಮ ಜೀವನದಲ್ಲಿ ಅಳವಡಿಸಿಕೊಳ್ಳುತ್ತೇವೆ. ನಡೆಯಲು ಕಷ್ಟವೆಂದು ಗಾಲಿಯನ್ನು(wheel) ಕಂಡುಹಿಡಿದೆವು , ಗಾಲಿಯಿಂದ ಸೈಕಲ್, ಸೈಕಲಿನಿಂದ ಮೋಟರ್ ಸೈಕಲ್ ಹೀಗೆಯೇ ಮಂಗಳ ಗೃಹವನ್ನೇ ತಲುಪುವಷ್ಟು ಮುಂದುವರೆದಿದ್ದೇವೆ.

ಹೀಗೆ  tradeoff ಹಾಗು innovation ಅಭಾವದ ಸಮಸ್ಯೆಗೆ  ಹಿಂದೆಯೂ ಸಹಾಯ ನೀಡಿದೆ, ಮುಂದೆಯೂ ನೀಡುತ್ತದೆ

Footnote – tradeoff ಹಾಗು innovation ಬಗ್ಗೆ ಮತ್ತೊಂದು ಉದಾಹರಣೆ : ಸುಮಾರು ೨೦ ವರ್ಷಗಳ ಹಿಂದೆ ಯಾವುದಾದರು ಪುಸ್ತಕ ಅಥವಾ ವ್ಯಕ್ತಿಯ ಬಗ್ಗೆ ತಿಳಿಯಬೇಕಿದ್ದರೆ ಗ್ರಂಥಾಲಯಕ್ಕೆ ಹೋಗಿ ಹುಡುಕಿ ನಂತರ ಓದಬೇಕಿತ್ತು(ಇಲ್ಲಿ ನಾವು ಜ್ಞಾನಕ್ಕೆ, ಸಮಯದ trade-off ಮಾಡುತ್ತಿದ್ದೆವು) ಆದರೆ ಈಗ ತಂತ್ರಜ್ಞಾನವು ಎಷ್ಟು ಮುಂದುವರೆದಿದೆಯೆಂದರೆ ವಿಕಿಪೀಡಿಯ ಮೂಲಕ ನಿಮಿಷಗಳಲ್ಲಿ ನಮಗೆ ಬೇಕಾದ ಮಾಹಿತಿಯನ್ನು ಪಡೆಯಬಹುದು. ಈಗ ಮಾಹಿತಿಯು ಸುಲಭವಾಗಿ ದೊರೆಯುತ್ತದೆ, ಆದರೆ ಮಾಹಿತಿಯ ಮಿತಿ ಎಷ್ಟರ ಮಟ್ಟಕ್ಕೆ(information overload) ಬೆಳೆದಿದೆಯೆಂದರೆ ನಮಗೆ ಮಾಹಿತಿಯನ್ನು ಗೃಹಿಸಲು ಕಷ್ಟವಾಗುತ್ತಿದೆ.

ವರುಣ ರಾಮಚಂದ್ರ ತಕ್ಷಶಿಲಾ ಸಂಸ್ಥಾನದಲ್ಲಿ ನೀತಿ ವಿಶ್ಲೇಷಕ. Twitterನಲ್ಲಿ  @_quale


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Remembering D V Gundappa

The literary genius of D. V Gundappa(1887 – 1975) is well known among Kannadigas. A cursory visit to any Kannada book shop will reveal DVG’s(as he was popularly known) works  in abundance. His scholarship extended from politics to poetics and he referenced the works of John Stuart Mill and Alexander Hamilton as easily as Kalidasa and Omar Khayyam. In total, he published more than fifty books consisting of 8,000 pages and another 1,500 pages of editorials, reports, speeches, statements and reviews.

Thanks to the great work done by the Gokhale Institute of Public Affairs, Bangalore (GIPA), an institute co-founded by DVG himself, all his editorials and articles that appeared in “Public Affairs”– the monthly journal of the GIPA started in  1949– are digitized.  (Note: You need to install Djvu pdf reader to read all the articles that are linked below).

An article titled Vox-Populi in Economics, written in February 1969, starts with a gem –“Cocksureness is an avoidable risk in every field of human life”– that rings true to this day. The article goes on to explain how cocksureness can be extremely disastrous in economics and how, thanks to socialist pressures, politicians across the world have resorted to pampering people rather than following sound economic principles. The article concludes with a plea to read the following immortal words of Prof. Alfred Marshall:

Students of social science must fear popular approval; evil is with them when all men speak well of them. If there is any set of opinions by the advocacy of which a newspaper can increase its sales, then the student, who wishes to leave the world in general and his country in particular better than it would be if he had not been born, is bound to dwell on the limitations and defects and errors, if any, in that set of opinions; and never to advocate them unconditionally even in an ad hoc discussion. It is almost impossible for a student to be a true patriot and have the reputation of being one at the same time”.

The spectrum of his works had brushes of almost everything related to public life. Examples include —  his scholarly criticism of Indira Gandhi, his nuanced view about religious conversions, about Nehru’s Failures, on linguistic states,  about party and government, the debate about provincialism vs. nationalism, on two Andhra states, the Secular State, of absolutism and tyranny, the philosophies of advaita and bhakti, on the Nationalisation of institutions, on Nehru the statesman, his moving obituary on Nehru among several others. These works are like  time-capsules of a bygone era. Several views that he expressed have stood the test of time; those that are now irrelevant do not seem outlandish as they express genuine scepticism rather than cynicism. His piece on space travel is a good illustration of this. Another noteworthy aspect about DVG was his ability to enrich prosaic topics such as citizenship by displaying the “services that poetry can  provide towards the cause of good citizenship”.

DVG the poet, the journalist, the public intellectual, the polymath is a perfect role-model for anyone who believes that civil criticism can achieve things that bile and vitriol seldom can; it is perhaps this quality of his that we must inculcate the most.

(Edit: All of his works from Public Affairs can be found here)





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Are we warped in our worldviews?

A recent research paper in “Annals of the American Academy of Political and Social Science” claims that “Both Liberals, Conservatives Can Have Science Bias”. The paper says, when exposed to dissonant evidence — information that challenges one’s ideological worldview or set of cultural values – both liberals and conservatives can be biased against science. The following excerpt from the paper succinctly explains the idea

People do not approach evidence and arguments about controversial issues in a purely rational, even-handed manner (Lodge and Taber 2000). Instead, an individual’s prior beliefs and political ideology strongly bias how he or she responds to these arguments through selective exposure, attention, comprehension, and recall (Kunda 1990; Lodge and Taber 2000; Lord, Ross, and Lepper 1979; Taber and Lodge 2006; Taber, Cann, and Kucsova 2009). For example, those with greater issue involvement or with strongly held opinions are less likely to modify their beliefs when confronted with new information and so will frequently ignore and misinterpret ideologically incongruent arguments (Johnson and Eagly 1989). Others may respond to counterattitudinal or ideologically dissonant messages with source derogation, counterarguing, reactance, or negative affect (Byrne and Hart 2009; Jacks and Cameron 2003; Lewandowsky et al. 2012).

Therefore, equally informed citizens may employ scientific evidence in very different ways depending on their ideological orientation.

The paper goes on to say that

 (…) use of science for political ends by both Democrats and Republicans has contributed to political polarization about science issues as part of a larger, ongoing competition between American political actors attempting to differentiate themselves and mobilize base constituencies within an increasingly polarized political environment (Dunlap and McCright 2008, 2011; Leeper and Slothuus 2014; Sarewitz 2013; M. Nisbet 2011).

Although the terms “liberal, “conservative”, “Democrat”, “Republican” mean very little in the Indian context, we do face science biases everyday.  In this context, it is a good exercise to remember the Indian constitution which states “to develop the scientific temper, humanism and the spirit of inquiry and reform”, a fundamental duty. It is also time that we take this  fundamental duty seriously for therein lies the solution to overcome our biases.


Thanks to Tejas Canchi for sharing this paper.

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ಭಾರತದ ಸಂವಿಧಾನ ಹಾಗು ಸಾಮಾಜಿಕ ಕ್ರಾಂತಿ

ಜನವರಿ ೨೬, ೧೯೫೦ ರಂದು ಸ್ವತಂತ್ರ ಭಾರತದ ಸಂವಿಧಾನ ಜಾರಿಗೆ ಬಂದಿತು. ಸಂವಿಧಾನದ ಅನೇಕ ಗುಣಗಳ ಬಗ್ಗೆ  ನಾವು ಕೇಳಿದ್ದೇವೆ ಆದರೆ ಸಂವಿಧಾನದ ರಚನಕಾರರು ಸಂವಿಧಾನದ ಮೂಲಕ ಸಾಮಾಜಿಕ ಕ್ರಾಂತಿಯನ್ನು ತರಲು ಹೊರಟ್ಟಿದ್ದರು, ಇಂದಿಗೂ ಇದೊಂದು ಅದ್ವಿತೀಯ ಪ್ರಯೋಗ.  ‘ಕ್ರಾಂತಿ’ ಹಾಗು ‘ಸಂವಿಧಾನ’ವೆಂಬ ಪದಗಳು ಒಂದು ತರಹದ ವಿರೋಧಾಭಾಸವನ್ನು ಕಲ್ಪಿಸುತ್ತವೆ. ಕ್ರಾಂತಿಯೆಂದೊಡನೆ ನಮ್ಮ ಮನಸ್ಸಿನಲ್ಲಿ ಘರ್ಷಣೆ, ಪ್ರತಿಭಟನೆ ಇತ್ಯಾದಿ ಚಿತ್ರಗಳು ಬಿಂಬಿತವಾಗುತ್ತದೆ . ಸಂವಿಧಾನವೆಂದಾಗ ವಿಚಾರ-ವಿನಿಮಯ, ವಿವೇಚನೆ ಈ ತರಹದ ಮೃದು ಪ್ರವೃತ್ತಿಗಳ  ಕಲ್ಪನೆ ಬರುತ್ತದೆ.  ಆದರೆ ಈ ಬಗೆಯ ಸಾಂವಿಧಾನಿಕ ಕ್ರಾಂತಿಯೊಂದನ್ನು ತರಲು ಯತ್ನಿಸಿವುದೇ  ನಮ್ಮ ಸಂವಿಧಾನದ ಅನನ್ಯ ಲಕ್ಷಣವಾಗಿದೆ. ಸಂವಿಧಾನಕರ್ತರು  ಕ್ರಾಂತಿಯನ್ನು  ಆರ್ಥಿಕ ಹಾಗು ಸಮಾಜೋದ್ಧಾರದ  ಮೂಲಕ ತರಲು ಯತ್ನಿಸಿದರು. ಈ ಲೇಖನವು ಸಮಾಜೋದ್ಧಾರದ ಮೂಲಕ ಕ್ರಾಂತಿಯನ್ನು ತರುವ ಪ್ರಯತ್ನದ ಬಗ್ಗೆ ಹೇಳಲು ಹೊರಟಿದೆ.

ಭಾರತದಲ್ಲಿ ಸ್ವಾತಂತ್ರ್ಯ ದೊರಕುವ ಮುನ್ನವೇ ಅನೇಕ ಮಹಾಜನರು ಸಮಾಜ ಸುಧಾರಣೆ ಹಾಗು ಸಮಾಜಕಲ್ಯಾಣದ ಕಡೆ ಒತ್ತು ನೀಡಿದ್ದರು.ಆದರೆ ಸಂವಿಧಾನದ ಮೂಲಕ ರಾಜ್ಯವು (the state)ಸಮಾಜ ಸುಧಾರಣೆಯ ಹೊಣೆಯನ್ನು ಹೊರಲಾರಂಬಿಸಿತು(ಪ್ರಾಯಶಃ ಇದರಿಂದಾಗಿಯೇ ಸ್ವಾತಂತ್ರ್ಯದ ಈಚೆಗೆ ನಾವು ಮಹಾನ್ ಸಮಾಜ ಸುಧಾರಕರನ್ನು ಕಂಡಿಲ್ಲ?). ಈ ತರಹದ ಹೊಣೆ ಹೊರುವುದು ಕೇವಲ ಕಷ್ಟಮಾತ್ರವಲ್ಲ ಇದೊಂದು ಅಪಾಯಕಾರಿಯಾದ ಸಂಗತಿಯೂ ಕೂಡ,ಏಕೆಂದರೆ

  • ಸಾವಿರಾರು ವರ್ಷಗಳಿಂದ  ಅವರವರ  ಚೌಕಟ್ಟಿನಲ್ಲಿ ಬದುಕ್ಕಿದ್ದ  ಜನರಿಗೆ  ಒಂದು  ಸಂವಿಧಾನವು “ಇದು ಹೀಗೆ” “ಅದು ಹಾಗೆ”  ಎಂದು ಹೇಳುವುದನ್ನು ಸ್ವೀಕರಿಸುವುದು ಕಷ್ಟವಾಗಬಹುದಿತ್ತು. ಅದರಲ್ಲೂ ಜಾತಿ, ಮತ ಇತ್ಯಾದಿ ವಸ್ತುವಿಷಯಗಳ ಬಗ್ಗೆ ಸಂವಿಧಾನದ ನಿರ್ದೇಶತ್ವವನ್ನು  ಸ್ವಿಕಾರ ಮಾಡುವುದು  ಇನ್ನೂ ದೊಡ್ಡ ಸವಾಲು. ಇಂದಿಗೂ ಈ ವಿಷಯಗಳ ಬಗ್ಗೆ ಚರ್ಚೆ ನಡೆಯುತ್ತಲೇ ಇವೆ, ಸವಾಲುಗಳನ್ನು ನಾವು ಒಂದಲ್ಲ ಒಂದು ರೀತಿಯಲ್ಲಿ ಎದುರಿಸುತ್ತಲೇ ಇದ್ದೇವೆ.
  • ಒಂದು ಅಂಶದ ಬಗ್ಗೆ ಅಸ್ವೀಕೃತಿ ಇದ್ದಮೇಲೆ, ಸಂವಿಧಾನದ ಬೇರೊಂದು ಅಂಶದಮೇಲೆ ಪ್ರಶ್ನೆ ಬರುವುದೂ  ಸಹಜವೆ. ಹೀಗಿದ್ದಾಗ ಇಡೀ  ಸಂವಿಧಾನವೇ ಅಸ್ವೀಕಾರವಾಗುವ ಸಾಧ್ಯತೆ ಇರುತ್ತದೆ. ಖಾಪ್ ಪಂಚಾಯತದ ಸದಸ್ಯರು ಹೀಗೆಯೇ ಸಂವಿಧಾನವನ್ನು ಪ್ರಶ್ನಿಸುತ್ತಾರೆ, ಅವರ ಮಾಪದಂಡಕ್ಕೆ  ತಕ್ಕಂತೆ ಅವರ ಜನರು ಬದುಕಬೇಕೆಂದು ಅಪೇಕ್ಷಿಸುತ್ತಾರೆ, ಹೀಗಿರುವ  ಹಕ್ಕು ಅವರಿಗೆ ಇದೆಯೇ? ಪ್ರಾಯಶಃ ಇದೆ, ಆದರೆ ಅವರು ಅವರ ನಿಯಮ   ಪಾಲನೆಯಾಗಬೇಕೆಂದು ಅಪೇಕ್ಷಿಸುವುದಲ್ಲದೆ ಅದನ್ನ ಪಾಲಿಸದಿರುವವರಿಗೆ (ಹಾಗು ಅವರ ಅಧಿಕಾರವನ್ನು ಸ್ವೀಕರಿಸದಿರುವವರಿಗೆ) ಕ್ರೂರ ದಂಡವನ್ನು ನೀಡುತ್ತಾರೆ.
  • ಅಮೇರಿಕಾ, ಬ್ರಿಟನ್ ನಂತಹ ದೇಶದ ಸಂವಿಧಾನವು ಕೇವಲ ಕಾನೂನಿನ ಚೌಕಟ್ಟಿನ ನಕ್ಷೆಯನ್ನು ನೀಡಿ ಜನರ ಸ್ವಾತಂತ್ರ್ಯವನ್ನು ಕಾಪಾಡುತ್ತದೆ.  ಇದೇ ಒಂದು ಮಹತ್ತರವಾದ ಕರ್ತವ್ಯ, ಇದರೊಡನೆ  ಸಮಾಜ ಸುಧಾರಣೆಯೂ ಸೇರಿಸಿದರೆ  ಕರ್ತವ್ಯದ ಮೇರೆ ಇನ್ನಷ್ಟು ಬೆಳೆಯುತ್ತದೆ.  ಈ ಜವಾಬ್ದಾರಿಯನ್ನು  ಪೂರೈಸಲು  ಸಾಧ್ಯವಾಗದಿದ್ದಲ್ಲಿ ರಾಜ್ಯದ ಮೇಲೆ ಬೇಜವಾಬ್ದಾರಿ ತನದ ಆರೋಪ ಹೂಡುವ ಸಾಧ್ಯತೆಯೂ  ಹೆಚ್ಚಾಗುತ್ತದೆ.  ಹೀಗಾದಲ್ಲಿ ಸಂವಿಧಾನದ ನ್ಯಾಯಸಮ್ಮತತೆ (legitimacy), ಸ್ವೀಕೃತಿ, ಹಾಗು ಅಸ್ತಿತ್ವವೇ ಪ್ರಶ್ನೆಗೊಳಗಾಗುತ್ತದೆ.

ಒಟ್ಟಿನಲ್ಲಿ ಸುಮಾರು ೬೫ ವರ್ಷದ ಇತಿಹಾಸವನ್ನು ನಾವು ಗಮನಿಸಿದರೆ, ಸಾಂವಿಧಾನಿಕ  ಕ್ರಾಂತಿಯನ್ನು ಸಂಪೂರ್ಣವಾಗಿ ಗಳಿಸಿಲ್ಲವಾದರೂ ತಕ್ಕ ಮಟ್ಟಿಗೆ ಯಶಸ್ಸನ್ನೇ ಪಡೆದಿದೆ. ಮೂಲಭೂತ ಹಕ್ಕುಗಳು ಎಲ್ಲಾ  ಪ್ರಜೆಗಳಿಗೂ ಇದೆ. ಇದಕ್ಕೆ ವಿರುದ್ದವಾಗಿ   ಮಾವೊವಾದ, ಖಾಪ್ ಪಂಚಾಯತ್ ತರಹದ ದುರಾದೃಷ್ಟಕರವಾದ ಪ್ರತಿಭಟನೆಗಳನ್ನೂ ನಾವು ಕಂಡಿರುವೆವು.  ಈ ಸಂಧರ್ಭದಲ್ಲಿ ನಾವು ಸಂವಿಧಾನ ಶಿಲ್ಪಿ ಡಾ।ಭೀಮ್ ರಾವ್ ಅಂಬೇಡ್ಕರ್ ಅವರ ಅವಿಸ್ಮರಣೀಯ ಮಾತುಗಳನ್ನ ಸ್ಮರಿಸಬೇಕು.  “(…)however good a Constitution may be, it is sure to turn out bad because those who are called to work it, happen to be a bad lot. However bad a Constitution may be, it may turn out to be good if those who are called to work it, happen to be a good lot. The working of a Constitution does not depend wholly upon the nature of the Constitution. The Constitution can provide only the organs of State such as the Legislature, the Executive and the Judiciary. The factors on which the working of those organs of the State depend are the people and the political parties they will set up as their instruments to carry out their wishes and their politics. Who can say how the people of India and their parties will behave? Will they uphold constitutional methods of achieving their purposes or will they prefer revolutionary methods of achieving them? If they adopt the revolutionary methods, however good the Constitution may be, it requires no prophet to say that it will fail. It is, therefore, futile to pass any judgement upon the Constitution without reference to the part which the people and their parties are likely to play” ಭಾಷಾಂತರ ಗೊಳಿಸಿದರೆ ಎಲ್ಲಿ ಅದರ ಸ್ವಾರಸ್ಯವು ಕಳೆದುಹೋಗುವುದೋ ಎಂಬ ಭಯದಿಂದ ಆಂಗ್ಲಭಾಷೆಯಲ್ಲೇ ಆಯ್ದ ಭಾಗವನ್ನು ಇಲ್ಲಿ ನೀಡಿರುವೆನು.




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India’s Strategic Petroleum Reserves

In 2014, the US became the largest producer of oil thanks to the increase in extraction from shale rocks. According to the International Energy Agency, US oil output is likely to surge to 13.1 million barrels a day by 2019.   As a consequence, the lower crude oil prices that we are witnessing today are,  in all likelihood, here to stay. The Indian economy has much to gain from this fall in oil prices as it has already brought  inflation down and can continue to positively impact the current account and trade balance.

In the run up to the highly anticipated budget in February, this trend of lower prices should not be viewed as a short-term gain for the economy. Instead, the situation should be used to strengthen the Strategic Petroleum Reserves to mitigate the risks to the Indian economy when crude oil prices recover; the reserves, if strategically built and expanded, would be a cushion against further price shocks. They might also prove beneficial when India negotiates deals with oil-producing countries.

The building of these reserves is tasked to a Special Purpose Vehicle called the Indian Strategic Petroleum Reserves Limited (ISPRL), which is owned by the Oil Industry Development Board (OIDB). The ISPRL aims to enhance “the existing storages of crude oil and petroleum products with the oil companies and serve as a cushion in response to external supply disruptions”. The storage units planned in Visakhapatnam, Mangalore and Padur are expected to hold 5 million metric tons of crude oil (7-9 days’ worth consumption). An aggressive second phase that will increase the capacity by an additional 12.5 million metric tons (20-25 days’ worth consumption) is also being planned. To put these numbers in perspective, 1 million metric tons of oil equals 7.33 million barrels oil; India’s oil consumption is expected to become 5.19 million barrels per day by 2025.

Although the prices are likely to stay low, strategic reserves are intended to act as a buffer against all contingencies. Ideally, the capacity addition must happen now as oil prices are low, but the ability to deploy the reserves must be factored in the design and implementation of these projects as well. However, there is a lack of clear communication on both capacity and deployment. The OIDB website says that the “Strategic Crude Oil Reserves would be in underground rock caverns and are expected to be operational by 2012”, but the following table on the ISPRL website paints a different picture:
Status of Completion

Regarding deployment, the ISPR website merely mentions that it “will have ownership and control of the crude oil inventories and will coordinate the release and replenishment of Crude Oil Stock during supply disruptions through an Empowered Committee to be constituted by the Government of India”. There is no further statement or clarification on the nature of these disruptions or the method of deployment to oil marketing companies.

As can be seen, India’s strategic reserve programme is still in its infancy and lags behind its international counterparts. With a capacity of 727 million barrels, the US Strategic Petroleum Reserve  is the largest government-owned emergency stockpile of crude oil in the world while China also recently made its first public announcement about its strategic reserves that hold 91 million barrels of crude oil. Come February, Mr. Jaitley will hopefully address these shortcomings of India’s strategic petroleum reserves and initiate a judicious plan to ensure that India will be prepared for a rainy day.

Update: August 3, 2015

There is an update on the ISPRL website about the status of project completion in each of the three locations


The Visakhapatnam cavern storage facility is ready to receive crude oil. The facility is expected to be commissioned in May 2015. The Mangalore & Padur projects can be commissioned after the cross country pipeline is completed. Order for the pipeline laying was placed on 3rd July 2014. The pipeline laying is scheduled to be completed by June 2015, however some unexpected hurdles are being faced. Commissioning of Mangalore and Padur is possible in October 2015, if the pipeline works are allowed to be continued unimpeded.

Finance Minister Mr. Arul Jaitley recently “sought an allocation of Rs.1,153 crore for buying crude oil to fill the first strategic crude oil reserve being built at Visakhapatnam by ISPRL”. The news report says the facility is being built, while the ISPRL site says the facility is ready to receive crude oil.

It will be interesting to see the average price the reserves will be maintained at.

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