The Impasse over Economic Policy

NEWSPAPERS have been full of stories about differences between the Reserve Bank and the finance ministry over economic policy issues. The differences are so sharp that the government is apparently planning to amend the Reserve Bank of India Act to clip the wings of its governor. These differences however are symptomatic of a deeper malaise afflicting the Indian economy. The point in this case is not who is right or who is wrong; the point is that whichever policy is pursued, the economy is headed for acute difficulties.

Greece for Sale

LET us forget for a moment that even the IMF, which happens to be one of Greece’s major creditors, has now publicly recognised that it is unrealistic to expect Greece to pay back its entire debt. Let us assume that Greece cannot be given any debt relief, but must pay back its debt, a certain amount each year. Even then however there are two ways to make Greece pay back this debt.

Europe’s Moment of Truth

GREEK Premier Alexis Tsipras’ acceptance of an “austerity package” on July 13, which contained measures rejected by the Greek people in a referendum barely a week before, represents not just an abject surrender by the Syriza government, or a sign of contempt on the part of German finance capital for the Greek electorate; it marks a decisive turning point for Europe (and indeed for the rest of the world), and the end of the road for a whole way of thinking on the Left, especially the European Left.

The Dismal State of Rural India

THE Socio-Economic and Caste Census 2011 (SECC), released by the Government of India on Friday, July 3, paints a dismal picture of the economic conditions of the people in rural India. The data it has unearthed need to be, and will no doubt be, discussed at great length in the days to come; I shall confine myself here to just one of the many striking findings of the Census, which relates to the proportion of total households in rural India that is engaged in manual casual labour.

The Spectre of the Thirties

THE Reserve Bank of India, as is to be expected, has been denying that its governor Raghuram Rajan had ever suggested that the world was facing the possibility of a 1930s-type Great Depression. Members of the “global financial community” are not supposed to say such things; so even if Dr Rajan did, a denial was inevitable.

The point however is not whether Rajan actually said this. The point is not even whether the world would actually slip into a 1930s-type depression. The point is whether the issues raised by Rajan at the event organised in London were valid and significant.

The Growing Centralisation

WHAT we are witnessing under the Modi regime is a significant reduction both in the relative amount of resources made available from the centre to the states, and also in the states’ ability to make their voices heard on matters of national economic policy. Such centralisation has been one of the chief hallmarks of the Modi administration.

The Destruction of Education

THE NDA government’s appointment of hack loyalists to important positions in the sphere of education has rightly raised concerns about the damage being done to the education system. But this is not the sole source of danger to the system. The era of globalisation of capital brings in its train a process of destruction of education, of which in the Indian context the intrusion of communal-fascism into the sphere of education is an important additional ingredient. This process of destruction, its “how” and “why”, has to be understood in its totality.

Economics and the Two Concepts of Nationalism

THE Westphalian peace treaties in 1648 which ended the thirty years’ and the eighty years’ wars in Europe are considered to have ushered in the era of nationalism and nation-States in that continent. But the concept of “nationalism” that emerged there was a non-secular majoritarian concept, which invoked both Christianity, and a sense of “otherness”, shading into oppression, towards various domestic minorities.

The Declining World Foreign Exchange Reserves

IF one adds up the foreign exchange reserves of all the countries in the world, including under the term “reserves” what these countries hold in the form of gold, US dollars, other reserve currencies, Special Drawing Rights of the IMF, and also liquid assets such as short-term Treasury Bills of the US government, then the total sum in August 2014 came to $12.03 trillion. Nearly two-thirds of this amount is held by developing countries whose reserve accumulation started increasing after the Asian financial crisis of the late nineties.

Skating on Thin Ice

THE Modi government completed one year in office on May 26. This year saw a continuation of the industrial stagnation which has been a feature of the Indian economy for quite some time now. The year-on-year rates of industrial growth, calculated on the basis of the index of industrial production, have been as follows:

2008-09 : 2.5 percent                           

2009-10: 5.3 percent

2010-11: 8.2 percent

2011-12: 2.9 percent

2012-13: 1.1 percent

2013-14: -0.1 percent

2014-15: 2.8 percent