ECONOMIC NOTES

Criticism and Criticism

FORMER Reserve Bank governor Raghuram Rajan has come out openly against the Indian government’s measure of demonetisation of currency notes in November 2016, in a speech delivered recently at the University of California at Berkeley. Since Rajan is an economist of repute, and has been an important economic decision-maker in the country, his criticism of demonetisation is to be welcomed: it adds considerable weight to the voices that have been raised against this wanton and despotic measure of the Modi government.

A Looming Fiscal Crisis?

THE UPA-2 government, in its last three years in office, had been obsessed with ‘fiscal consolidation’ – a retreat from the limited ‘fiscal stimulus’ announced after the global crisis. The pre-occupation was with bringing down of the fiscal deficit, more so by restricting public expenditure growth instead of stepping uprevenue mobilisation. The change of government in 2014 produced no shift in this basic thrust of the fiscal policy of the central government.

The Yellow Vest Movement

NOTHING shows the crisis of neoliberal capitalism more clearly than the popular uprising in France that is occurring under the banner of the “Yellow Vest” movement. Thousands are congregating in Paris over week-ends to protest against the intolerable burdens being imposed upon them in the name of “austerity” and to demand that resources be raised instead through taxing the rich. This movement had begun initially as a protest against the diesel price-hikes, but has now taken on a more general character and is drawing huge support from the people.

The Emerging International Regime

THIRD world economies are now facing a reduced export demand for their goods and services for two distinct reasons. One is the world capitalist crisis which entails a reduced aggregate demand in the world economy and hence reduced aggregate exports for all countries taken together; the other is the protectionism of the US, which, by garnering for that country a larger share than it would have otherwise had of this reduced world market, leaves correspondingly less for others.

Real Wage Growth in the World Economy

THE International Labour Organisation (ILO) has just brought out its Global Wage Report 2018-19 which provides data on real wage growth in the world economy for 2017, the latest year for which such data are available. This shows that real wage growth for the world economy was 1.8 per cent in 2017, which was not only lower than the 2.4 per cent growth of 2016, but was the lowest annual growth rate since 2008, and certainly lower than what the world economy experienced before 2008.

Vilifying the Intelligentsia

NARENDRA Modi said the other day, rather disparagingly, that the “Urban Naxals” live in air-conditioned comfort. Since all who speak or write in public upholding the right to dissent from the Hindutva positions, including even known critics of the Left, which means virtually all members of the intelligentsia who display any integrity, have been dubbed “Urban Naxals” by his government, his remark in effect amounts to targeting the entire intelligentsia.

Begging and Criminality

ON Wednesday August 8, the Delhi High Court decriminalised begging in the capital. In the course of its hearing, it had raised the question how begging could be an offence in a country where the government was unable to provide food and jobs; its final verdict is in line with this thinking. Of course there was no central legislation, or legislation relating specifically to Delhi, that had criminalised begging earlier; but the capital region like several other states had simply used the provisions of the Bombay Prevention of Begging Act to treat begging as a criminal activity.

Ranking Universities

THE proposal to eliminate the University Grants Commission and to tighten political control over the higher education system in India, has been mooted at the behest of Narendra Modi who is apparently concerned about the dearth of Indian names among the top-ranked universities in the world. This concern is not confined to Modi alone; it is shared by large numbers of persons in the country’s political establishment, and by many in the general public.

Capitalism’s Discourse on “Development”

CAPITALISM’S discourse on “development” which has become quite influential all over the third world in the neo-liberal period proceeds as follows: (i) “development” must consist in shifting the work-force from the traditional (petty production) sector which is overcrowded with low labour productivity, and hence constitutes a repository of poverty,  to the modern (capitalist) sector which has much higher labour productivity.

A False Theory

FIRST it was the finance secretary who said that if the government borrowed less then more savings would be available for the private sector to borrow. Then it was the deputy governor of the Reserve Bank of India who talked of government borrowing “crowding out” private borrowing. The common theme here is that there is a given amount of savings, a fixed pool as it were, from which if the government takes more, then less will be available for the private sector.

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