ECONOMIC NOTES

The Goods and Services Tax

FOR pushing through the Goods and Services Tax (GST), the NDA government is resorting to an enormous amount of untruth. The most blatant of these is the utterly bogus claim that the GST would increase India’s GDP growth rate by 2 percent per year. If the GST had such a miraculous effect, then the world capitalist crisis would have vanished long ago, since the US, which does not have a GST, would simply have moved to a GST regime, adding to its GDP growth rate and that of the world economy as a whole.

Modi’s Two Years

NEO-LIBERALISM is usually portrayed in terms of a “State versus Market” dichotomy, as entailing greater recourse to the market in lieu of State regulation, and hence constituting a “retreat of the State”.

A Right-Wing Coup in Brazil

NOAM Chomsky has called it a “soft coup”, presumably because no guns or tanks have been involved as yet; but the forced resignation of Dilma Rousseff, the democratically elected  president of Brazil belonging to the Left-wing Workers’ Party, and her replacement by a Right-wing politician Michel Temer, who has lost no time in constituting an all white and all male conservative cabinet, is nothing short of a coup.

World Poverty

THE International Labour Organisation (ILO) brings out every year a publication called World Employment and Social Outlook. The current year’s report, released on May 18, is sub-titled “Transforming Jobs to End Poverty”. It provides estimates of the level of world poverty and of the amount of income transfers to the poor required for ending world poverty.

India’s Industrial Stagnation

THE index of industrial production for 2015-16 which has recently been released shows that the growth rate of the industrial sector for the financial year (over the previous year) comes to a meagre 2.4 percent. This virtual stagnation in industrial output is not just some sporadic occurrence. In fact the industrial growth rates for the last four financial years have been as follows:

 

2012-13: 1.1 percent

2013-14: -0.1 percent

2014-15: 2.8 percent

The Perversity of Market Signals

IF we leave aside the problem of deficiency of aggregate demand, ie, of generalised over-production, then the only demand-supply mismatch that can arise in an economy is when too much of some commodity is produced relative to demand, and correspondingly too little of some other commodity is produced relative to demand. When such a mismatch arises, the market gives a clear signal about it through the actual level of inventories of commodities being either too much or too little relative to the “normal” level.

The Panama Papers

EDWARD Snowden, the NSA whistleblower from the United States, has called it the “biggest leak in the history of data journalism” ever to have occurred in the world. Mossack Fonseca, a law firm based in Panama, had made it its business to arrange investments by the rich and the wealthy all over the globe in several off-shore companies in a clandestine manner, which, it had promised its clients, could never be breached.

On Marxism and the Caste Question

 

THE intellectual effervescence, leading to the emergence of a new Left discourse incorporating the caste question, that has appeared in several campuses around the country in the wake of the Hindutva forces’ attack on institutions of higher learning and creativity, brings to the fore once more the relationship between the Marxist approach and the issue of caste oppression. A discussion of this relationship may not have much immediate practical bearing on current struggles, but the fact that it has come on the theoretical agenda cannot be denied.

The Phenomenon of Negative Interest Rates

ONE is witnessing the emergence of a strange and unprecedented phenomenon in the advanced capitalist world, namely the charging of negative interest rates. The European Central Bank reduced its deposit rate to -0.1 percent in June 2014, and since then it has reduced this rate further, to-0.2 percent in September 2014, -0.3 percent in December 2015, and to -0.4 percent in March 2016. And apart from the ECB, four other national central banks, those of Switzerland, Japan, Denmark, and Sweden, have also reduced interest rates on certain parts of their deposits to negative levels.

The State of the Economy

THERE was a time when India had one of the finest statistical systems in the developing world. No matter how one interpreted the statistics that came out of that system, one could take the figures themselves as reasonably correct. This alas is no longer true. We now have GDP estimates which the Economic Survey of the union government itself considers unreliable. And some of the figures given in the latest Economic Survey are quite bizarre.

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