An autonomous research institute under the Ministry of Finance

 

Working papers

Internationalisation of the Rupee

  • Feb, 2018
  • Authors Shekhar Hari Kumar, and Ila Patnaik
  • Details NIPFP Working Paper No. 222
  • Abstract
    The Indian Rupee currently accounts for approximately 1% of global foreign exchange turnover. It has a smaller market size across most trading instruments when compared to the top 8 emerging market currencies. In this paper, we evaluate the current status of the Indian Rupee as an international currency using the Chinn and Frankel (2008) framework, and explore the possibility of future Indian Rupee internationalisation. We find that the Indian Rupee has a negligble role as an official sector currency. It has some use as a reserve currency in its economic sphere of influence, but no role as an anchor or intervention currency. Private actor adoption of the Indian Rupee is much larger and more diverse than the official sector. However, this role is mostly restricted to financial flows and portfolio investment. In terms of trade invoicing and settlements in the private sector, the Indian Rupee plays a limited role due to concerns of convertibility and risk management. Given the current path of exchange control and capital account liberalisation, we anticipate gradual internationalisation of the Indian Rupee due to regional competition from the Renminbi.
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Estimates of air pollution in Delhi from the burning of firecrackers during the festival of Diwali

  • Feb, 2018
  • Authors Dhananjay Ghei and Renuka Sane
  • Details NIPFP Working Paper No. 223
  • Abstract
    Delhi is one of the most polluted cities in the world, especially in the winter months from October - January. These months coincide with the religious festival of Diwali. It is argued that air quality gets worse in the aftermath of Diwali on account of firecrackers that get burned during the festival. We use hourly data on PM 2.5 particulate matter from 2013 to 2017 to estimate the Diwali effect on air quality in Delhi. We improve on existing work by using the event study technique as well as a difference-in-difference regression framework to estimate the Diwali effect on air quality. The results suggest that Diwali leads to a small, but statistically significant increase in air pollution. The effect is different across locations within Delhi. To our knowledge, this is the first causal estimate of the contribution of Diwali firecracker burning to air pollution.
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Business Cycle Measurement in India

  • Jan, 2018
  • Authors Radhika Pandey, Ila Patnaik, and Ajay Shah
  • Details NIPFP Working Paper No. 221
  • Abstract

    This paper presents the business cycle chronology for the Indian economy. Two distinct phases are analysed. The pre-1991 period when the cycles were mainly driven by monsoon shocks. The post 1991 phase where we see the emergence of conventional business cycles driven by investment-inventory fluctuations. The paper sheds light on the economic conditions that shaped the nature of cycles in the two phases. The concluding section of the paper presents an overview of the economic conditions post 2012.

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The Multilateral Legal Instrument: A developing country perspective

  • Jan, 2018
  • Authors Suranjali Tandon
  • Details NIPFP Working Paper No. 220
  • Abstract

    Action point 15 of the BEPS program mandated developing a Multilateral Instru-ment to modify bilateral tax treaties. A country or signing this instrument will be able to modify all treaties, where other contracting parties have also notified the same. This would allow countries to simultaneously and therefore swiftly adopt measures to tackle BEPS in a large number of treaties. Based on the country positions submitted to the OECD as on 30th August 2017, this paper makes an attempt to assess this instrument has suc-ceeded in bringing about the desired changes. A unique database is constructed on the basis of these country positions. Using this database, the paper shows that the benefit of the MLI may be limited in so far as the application of the optional Articles is concerned. In so far as developing countries are concerned it is found that the gains to these countries may be limited. The adoption of the minimum standards may be the limited success achieved by the instrument.

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