ECONOMIC NOTES

Who is Robbing the Banks?

ON the eve of the declaration of the schedule for general elections in 2014, P Chidambaram, finance minister in the outgoing UPA government, chose to meet the chief executives of India’s public sector banks. The cynical would argue that this must be a last attempt to get the banks to dole out some more sops before the election date. If that were to impress a section of the electorate at all, it is a clever strategy. The government can be seen as benefiting some, without running foul of the Election Commission’s pre-election Code of Conduct.

 

The Trans-Pacific Partnership Deal

THE Obama administration has been negotiating what is claimed to be a free trade agreement with eleven other Pacific nations for some time now. These nations are: Australia, Japan, Brunei, Malaysia, Vietnam, Chile, New Zealand, Peru, Singapore, Canada and Mexico. The exact terms of the agreement are not publicly known; whatever is known is from “leaks”, including one that has come through Wikileaks.

The Indispensability of Marxism

WE have been hearing of late remarks like “We do not believe in ‘Isms’” and “Divisions between the Left and the Right are things of the past”. Since these remarks emanate from quarters that supposedly strike a chord with the contemporary youth, they deserve to be taken seriously. Besides, they constitute part of an intellectual tradition that has been recently in vogue, which holds that all “grand narratives”, of which Marxism is a classic example, are passé.

Employment during the Boom

THERE exists a whole tribe of economists, by no means a small one, which debunks every attempt at income redistribution in the country as “populism”, and which insists that the growth of the Gross Domestic Product must be given absolute priority. This tribe applauds Narendra Modi’s “development” agenda, which entails enticing corporates, both domestic and foreign, to invest in one’s own domain by offering them generous incentives.

India Yields to Pressure at Bali

THE Indian media for which the WTO meeting at Bali was of no more than passing interest made out on December 7 that India had achieved a great victory at that meeting. Even The Hindu’s headline read: “India’s Stand Prevails at Bali”. The media were merely echoing the view of the Indian government whose commerce minister even took pride in the fact that it was the Indian draft that was put up for endorsement to the member countries. The truth regrettably is exactly the opposite.

The WTO and Agricultural Subsidy

THE United States and Europe subsidise their agriculture massively. In the US for instance, government expenditure by way of subsidies to the agricultural sector is on average nearly half of the GDP originating from its agriculture. The figures for Europe are broadly similar. In India by contrast, government expenditure by way of subsidies to agriculture is estimated to have been less than 10 percent of the GDP originating from agriculture in the past, and is now just likely to exceed this figure.

The Elusive Recovery

THE world capitalist crisis which began in 2008 not only persists but is worsening. The second half of the current year was supposed to be the period when growth in the major advanced countries would gather momentum. The IMF had predicted in spring that activity would “gradually accelerate”. But the latest figures show that instead of a recovery we have an actual deceleration in growth. In the Eurozone, quarter-to-quarter growth which had been 0.3 percent in the second quarter of this year fell to 0.1 percent in the third quarter.

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