The 2017-18 Budget: Aggravating Recession

THE annual budget has an impact on the economy over the year it covers; additionally it is also an indicator of the direction of policy of the government for the future years. Any budget has to be judged on both these counts. And on both counts, the Modi government’s 2017-18 budget is ominous for the people. It will worsen the recessionary crisis unleashed above all by the demonetisation measure; and it also portends an economic strategy that, in the face of the protectionism being introduced by Donald Trump, will further import unemployment into the economy.

Neo-Liberal Capitalism and India’s Nationhood

INDIA’S anti-colonial struggle was not just about getting independence from foreign rule. In fact, this struggle would not even have succeeded if it had been only about that.

The Reserve Bank’s Fall

THE point here is not that the Reserve Bank of India imposed on the working people of this country an utterly witless and utterly oppressive demonetisation; the point is rather that it had very little say in the matter.

The Demonetisation Fiasco

THE demonetisation of 86 percent of the currency of the country, a virtually unprecedented measure anywhere in the world, has brought immense hardship to the working people of the country, and will damage their living standards permanently (since the Modi government plans not to replace the entire value of the demonetised notes by printing new ones). Many however believed that it was a step being taken for the greater social good, for achieving certain important social goals.

Demonetisation and the Question of Inflation

NARENDRA Modi had asked for 50 days’ time for his demonetisation measure to work: the people were supposed to suffer for 50 days, by the end of which the wonderful results of demonetisation were to become evident. He was even willing to get “hanged” if proved wrong at the end of this period.

The Dialectics of Authoritarianism

WE are seeing in India at present a remarkable inversion of reason. The more the common people suffer from the impact of Modi’s demonetisation, the more he is lauded for the “courage” shown by him in undertaking it. An economic measure should be, and normally is, judged on the basis of how it benefits the people, and any measure that brings distress to the people is derided for that reason. What we find in the present case however is just the opposite: the more demonetisation brings distress to the people, the more it is applauded for its wisdom and courage.

Banks as Victims

IN the outcry against the disastrous demonetisation experiment of the Modi government one aspect that has not been given adequate attention is the damage it has done to the reputation and the balance sheets of the banks. Customers queueing before bank doors and ATMs seem on occasion more forgiving of the government than of the harassed bank employees, who are forced to ration out currency and offer those customers they can accommodate, less than even the maximum withdrawal permitted by the government and the RBI.

Demonetisation and Banks’ Lending Rates

SPOKESMEN of the ruling party are busy these days spreading another falsehood, namely that, because of demonetisation which has brought in huge amounts of cash to their coffers, banks would be so keen to lend that their lending rates are going to fall, and that such a fall will act as a stimulus for the economy.

Demonetisation as the Basis for a Fiscal Stimulus

A BIZARRE argument is doing the rounds these days. It states that the cash which gets disabled in the “black economy” because of the government’s demonetisation measure, would enable the government to undertake an equivalent amount of expenditure with impunity; it can therefore spend more on infrastructure and other essential areas, or simply provide cash transfers to the people.

Demonetisation as a Means of Fighting “Black Money”

SO many lies are being spread by the government which is currently busy wrecking the Indian economy in the manner of a bull in a china shop, so many spurious economic arguments are being trotted out by it, that one has to be extremely vigilant not to be swept away by this tide of unreason. In the current article, and the two subsequent ones to follow, I propose to examine some of the more persistent assertions that are being made by government spokesmen.

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Peoples Democracy

ECONOMIC NOTES