ECONOMIC NOTES

The Argument about Competitiveness

WITH the government being forced to withdraw from the RCEP agreement, an argument has arisen: if India is not competitive with other countries in producing a whole range of goods, which is why the producers of such goods within the country objected to the agreement in the first place, then why should it go on producing them? And a related argument states: in protecting uncompetitive producers, the country is penalising consumers who would have otherwise accessed cheaper imported goods; is this not unfair?

A Dangerous Agreement to Sign

ON October 24-25, there were widespread peasant protests all over the country against the Regional Comprehensive Economic Partnership (RCEP) involving sixteen nations which India is currently negotiating. As negotiations near completion, such protests are escalating, with the All India Kisan Sabha planning to organise a nation-wide protest on November 4, just before the RCEP agreement is due to be signed. And the Kerala government too is organising a protest.

The World Economy in Decline

THE European Central Bank last month pushed its benchmark interest rate to minus 0.5 per cent, which means that if it gives a loan of 100 euros then it would be paid back only 99.5 euros at the expiry of the loan. This has started a new trend: in countries like Germany, Spain, Italy, Czech Republic and even Greece, the yields on government bonds have been pushed into the negative region. Lenders to these governments in other words are willing to pay for holding government bonds.

In the Lee of Hindutva

THE class function of Hindutva is becoming clearer by the day. In the lee of Hindutva the Modi government is embarking on a massive programme of privatisation of the public sector, and of attack on the working class. Such a programme could not have been launched under the “normal” circumstances of bourgeois rule; it would have aroused stiff opposition.

The Opposite of What Was Needed

THE reduction in the corporate tax rate by the BJP government, which would entail a transfer of Rs 1.45 lakh crores from the public exchequer to the corporate sector, has been generally seen to be insufficient for overcoming the slowdown in the Indian economy. This is not just an understatement; it is actually erroneous. This measure is the very opposite of what was needed for overcoming the slowdown.

The Roots of Indian Federalism

THE anti-colonial struggle saw the emergence of a pan-Indian national consciousness that was superimposed upon a pre-existing “nationality” consciousness based on linguistic regions. The pan-Indian national consciousness in other words was superimposed upon a Bengali or Gujarati or Tamil or Odiya consciousness; and the anti-colonial struggle saw the flourishing of both kinds of consciousness.

FDI in the Coal Sector

JOAN Robinson, the well-known economist, had drawn attention to a fundamental difference between foreign direct investment in the manufacturing sector and foreign direct investment in a sector that extracted an exhaustible resource, such as a mineral product. This difference can be illustrated with an example.

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