ECONOMIC NOTES

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.

Why Do We Have Unemployment?

UNEMPLOYMENT has become so persistent a phenomenon in contemporary times that there is a common feeling that it is a “natural” state of affairs, that nothing can ever be done about it, and that the only way to have greater employment opportunities coming your way is either to oppose the system of job “reservations” for the deprived segments of the population altogether, or to demand that your own “caste” or “community” be included in the category of those eligible for such “reservations”.

Budget 2016-17: Hype Is All

THE union budget for the year 2016-17 presented to parliament by Finance Minister Arun Jaitley on February 29, has been termed “pro-poor” and “pro-farmer” by the media. Nothing else could be further from the truth. The total expenditure of the government in 2016-17 is supposed to increase by 10.6 percent over the revised estimates for 2015-16, compared to a GDP growth-rate of 11 percent, which means that the budget if anything is deflationary in overall terms even in the midst of a world economic crisis that was alluded to by Jaitley himself.

A Government at the End of Its Tether

THREE main factors explain why the effect of the world capitalist crisis that erupted in 2007-08 and is still continuing was not felt by the Indian economy for a long time. Each of these three countervailing factors, however, has now run its course, leaving the government with no means of coping with the ongoing crisis. On the contrary, whatever it can do now will only compound the crisis.

Commodities and Democracy

CAPITALISM is a “spontaneous” system, in the sense that it is a self-driven entity propelled by its own immanent tendencies. There is no human agency shaping its dynamics, and even the human beings who are at its helm, viz, the capitalists, do not act on their own volition but are coerced into acting in specific ways by the logic of the system itself, so much so that Marx had called the capitalist “capital personified”.

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