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How India's Economy Works

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How India's Economy Works
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  • How India's Economy Works

    What the RBI's role in the economy and its Relationship with Government is

    10/06/2026 | 38 mins.
    In this episode of How India’s Economy Works, host Puja Mehra speaks with economist Dr. Parag Waknis to unpack one of the most important yet least understood documents in Indian policymaking, the RBI’s accounts. They explore how the RBI manages government debt, why it holds government securities on its balance sheet, and how these operations influence GDP, liquidity, interest rates and inflation.
    The conversation examines the evolution from direct deficit financing to the current system of primary dealers, the significance of foreign exchange reserves, and the RBI’s use of tools such as open market operations and Operation Twist. Dr. Waknis also explains the relationship between government borrowing and central bank profits, and discusses whether these dynamics affect the RBI’s policy independence.
    Tune in for insights into the institution at the heart of India’s monetary and financial system.

    CHAPTERS
    (00:00) Introduction
    (00:14) Why the RBI Balance Sheet Matters
    (03:54) Why Government Bond Auctions Fail
    (06:15) How RBI Invests Forex Reserves
    (08:28) Operation Twist and Borrowing Costs
    (11:21) Why RBI Doesn't Fund Government Directly
    (14:33) Currency Notes, Coins and Sovereignty
    (16:35) What the Latest Balance Sheet Shows
    (19:00) Government Borrowing and RBI Surplus
    (21:27) Rising Government Debt on RBI Books
    (24:18) Is India’s Bond Market Distorted?
    (25:44) RBI Independence and Balance Sheet Risks
    (27:47) Understanding the Monetary Policy Corridor
    (32:54) Rules Versus Discretion in Monetary Policy
    (34:49) RBI’s Conflicting Institutional Roles
    (36:36) Why US Debt Markets Differ
    (37:48) Key Takeaways on RBI Operations

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  • How India's Economy Works

    India's Manufacturing is Broken. There's Only One Way to Fix It, says Rajiv Kumar

    27/05/2026 | 29 mins.
    In this episode of How India's Economy Works, journalist and author Puja Mehra speaks with economist and former NITI Aayog Vice Chairman Rajiv Kumar about why India’s manufacturing sector continues to underperform despite decades of policy attention and repeated attempts to boost industrial growth.
    India has long aspired to become a global manufacturing hub, yet manufacturing’s share in GDP has stagnated and labour-intensive sectors such as apparel, leather and food processing have struggled to expand. Drawing on Dr. Kumar’s recent writing and policy experience, the conversation explores why India has failed to build an export-oriented manufacturing economy, why scale and competitiveness remain elusive, and whether the country has become too dependent on the idea of a large domestic market.
    They discuss the limitations of production-linked incentives, the persistence of protectionist thinking, and why Indian industry has often preferred domestic shelter over global competition. The episode also examines the contrasting experiences of China, Bangladesh and Vietnam, the role of state governments in export promotion, the challenges facing SMEs, and why labour-intensive manufacturing remains crucial for absorbing surplus workers from agriculture.
    The discussion raises larger questions about employment, industrial strategy and India’s long-term growth model. Can manufacturing still become a major engine of jobs and exports? What would it take for India to double its share in global trade? And are policymakers, industry and states aligned enough to make that happen?
    Tune in for insights on why India’s manufacturing ambitions continue to fall short — and what it will take to build a more competitive, export-driven economy.

    CHAPTERS
    (00:00) Introduction
    (00:20) Manufacturing Slowdown
    (01:01) Export-Led Growth
    (02:53) India’s Market Myth
    (03:57) Competing With China
    (08:37) Rewarding Exporters
    (11:51) Bangladesh Garment Success
    (12:25) Why Factories Leave India
    (15:13) Jobs And Textiles
    (16:52) Manufacturing Wake-Up Call
    (18:14) Employment Concerns
    (21:02) Supporting Smaller Firms
    (21:39) Lessons From China
    (23:58) Rethinking PLI
    (25:51) Bureaucracy And Industry
    (26:31) Breaking Policy Silos

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  • How India's Economy Works

    The Productivity Slowdown Bedevilling India’s Growth Story

    13/05/2026 | 30 mins.
    In this episode of How India’s Economy Works, journalist and author Puja Mehra speaks with economists Arjun Jayadev and Amit Basole, authors of the CSIE working paper India's Labour Productivity Puzzle, about a troubling trend beneath India’s headline growth numbers: a sharp slowdown in labour productivity since 2017.
    India remains one of the world’s fastest-growing major economies, employment levels have risen, and female labour force participation has increased. Yet, according to their latest research, workers today are producing far less than they would have if earlier productivity trends had continued. The conversation explores why this matters for wages, living standards, investment, and the broader health of the economy.
    They discuss the rise of surplus labour, the difference between employment and productive jobs, and why much of the recent increase in work — especially for women — may reflect economic distress rather than opportunity. The episode also examines weak private investment, manufacturing stagnation, structural transformation, the limits of formalisation, and whether policies like infrastructure spending, digitalisation, and production-linked incentives are truly improving productivity.
    The discussion raises a deeper question: can India sustain high growth if output per worker remains stagnant? Tune in for insights on why India’s growth story may be masking a deeper productivity crisis — and what it means for jobs, wages, and the future of the economy

    CHAPTERS
    (00:00) Introduction
    (01:23) India’s Labour Productivity Slowdown Since 2017
    (05:05) Why India’s Productivity Crisis Stands Out Globally
    (09:32) How Growth Can Rise Despite Stagnant Productivity
    (10:58) Surplus Labour and the Rise of Low-Quality Employment
    (14:02) The Manufacturing Productivity Puzzle
    (15:08) Low Wages, Weak Productivity, and Employer Incentives
    (17:24) The Link Between Productivity and Wages
    (18:35) Women’s Employment and Economic Distress
    (20:40) The “Intensification of Dualism” in India’s Economy
    (21:45) Formalisation Versus Informal Labour Expansion
    (22:14) PLI Schemes, Policy Dynamism, and Missing Counterfactuals
    (25:30) Cash Transfers and Structural Transformation
    (27:00) Why Digitalisation Does Not Automatically Improve Productivity
    (28:55) Conclusion and Final Thoughts

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  • How India's Economy Works

    When Growth Doesn’t Reach Workers — The Hidden Stress in India’s Labour Market

    29/04/2026 | 28 mins.
    In this episode, journalist and author Puja Mehra speaks with Rosa Abraham, economist and one of the authors of the State of Working India 2026 report, about the growing stress in India’s labour market, highlighted by recent worker protests in Noida. They discuss why even formal sector jobs are no longer guaranteeing wage growth, with real earnings stagnating—and in some cases declining—over the past decade.
    Abraham explains how this is not a cyclical slowdown but a deeper structural issue, driven by weak productivity, misallocation of capital, and the absence of a strong small and mid-sized enterprise base (crucial sector that invests in workers). They also examine why higher education is failing to translate into better jobs, leaving many young graduates unemployed or underemployed.
    Are current policies missing the bigger picture? What does this mean for India’s demographic dividend?
    Tune in for a sharp look at why economic growth isn’t reaching workers—and the risks of ignoring it.

    CHAPTERS
    (00:00) Introduction
    (00:14) Worker Protests in Noida
    (01:20) Stagnant Wages in India
    (02:30) Falling Graduate Salaries
    (04:27) What Low Wage Growth Reflects
    (07:39) Why Minimum Wages Aren’t Enforced
    (08:31) Youth Unemployment Explained
    (12:01) India’s Demographic Dividend at Risk
    (15:00) Demand vs Supply Side Problem
    (18:16) Is It a Mindset Problem?
    (20:28) Role of Public vs Private Sector
    (22:09) Fixing the Jobs Ecosystem
    (23:58) Risks of Inaction
    (27:06) No Easy Solutions

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  • How India's Economy Works

    The RBI’s Losing Battle for the Rupee

    15/04/2026 | 36 mins.
    In this episode, journalist and author Puja Mehra speaks with Rajeswari Sengupta, Economist and Associate Professor at Indira Gandhi Institute of Development Research (IGIDR), about the recent volatility in the rupee and the Reserve Bank of India’s response to it. They discuss how global shocks—from the West Asia conflict to sustained capital outflows—have exposed deeper structural vulnerabilities in India’s external sector.
    Sengupta explains how the rupee’s weakness is not just cyclical but rooted in fundamentals, including rising import dependence, especially on energy, and weakening foreign capital inflows. Against this backdrop, they examine the RBI’s increasingly aggressive intervention to stabilise the currency.
    But are these measures addressing volatility, or attempting to influence the level of the exchange rate itself? What does this mean for the rupee’s role as a market-driven price, and for India’s ambitions of greater financial openness?
    Tune in for insights into the tensions between currency management and market forces, and what it means for the future of India’s exchange rate framework.

    CHAPTERS
    (00:00) Pressures on the Rupee
    (01:09) West Asia War Impact
    (02:30) Energy Import Dependencies
    (04:32) Sustained Capital Outflows
    (06:14) Financing Current Account Deficit
    (08:03) RBI’s Intervention Methods
    (10:14) Offshore Arbitrage and Banks
    (11:58) Unprecedented Regulatory Measures
    (13:16) Impact on Indian Banks
    (15:42) Risks of Policy Flip-Flops
    (16:59) Cost of Hedging Exposure
    (21:20) Value of Market Speculation
    (26:38) Rupee as Shock Absorber
    (31:07) Recommendations for Future Policy

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About How India's Economy Works
Join journalist Puja Mehra as she breaks down one story to give you all the context you need to understand how it fits into the larger picture of India's economy.
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How India's Economy Works: Podcasts in Family