INDIA’S foodgrain economy which, after a period of decline following liberalisation, had shown some signs of a recovery, is once again on a declining trajectory. The recovery itself had been a limited one, taking per capita foodgrain output only to the level where it had roughly been before the onset of liberalisation, and from which it had slipped in the interim; but even that limited recovery has now been reversed.
COMRADE BT Ranadive used to reminisce that in pre-independence Bombay (as it was then called) there would occasionally be impressive workers’ strikes at the call of Communist-led trade unions which were powerful in the city at that time, at which Hindu and Muslim workers would stand shoulder to shoulder. Not surprisingly however, given the colonial context, these strikes were not always successful, and, when that happened, they would often be followed by communal riots.
TRUE to form, the BJP government is all set to change the texture of the Indian State into a snooping and terrorising institution whose bonding with corporate capital will now get even closer and beyond any public scrutiny. And the content of the change it is unleashing is as damaging to democracy as the manner in which it is doing so.
THE Reserve Bank of India has just come out with a document titled Macroeconomic Impact of Demonetisation: A Preliminary Assessment, which, while conceding that demonetisation did have an adverse impact on output, suggests that this impact would have got over by mid-February, because of the re-monetisation that has occurred in the interim. As the document puts it, “…the impact of the liquidity shock was assessed to largely dissipate by mid-February…”
IN his speech to BJP workers in Delhi after the assembly election results had been declared, Narendra Modi announced that his policy henceforth would be to empower the poor by providing them with opportunities, instead of handing out doles to them, which, he believes, is what the various “pro-poor” welfare programmes amount to. Newspapers were quick to underscore, and in general laud, this shift in approach from “welfarism” to “development”. Since government policy is set to reflect this shift from now on, its implications are worth examining.
PERHAPS no other public policy debate in post-independence India has seen as much of an “inversion of reason” on the part of the government as the demonetisation debate. When critics were pointing, on the basis of government statistics themselves, to the palpable failure of the demonetisation measure to achieve its purported objective, which was to cripple the black economy, the government kept harping, in its justification, on the extraordinary“boldness” of the move.
FINANCE capital is always opposed to the use of fiscal measures for stimulating an economy. This is because any such fiscal stimulation undermines the social legitimacy of capitalism, and especially of that segment of it which constitutes the world of finance and which is peopled with “functionless investors” in Keynes’ words or of “coupon clippers” in Lenin’s words, ie, of entities that play no role in the production process. If State intervention comes to be seen as necessary for stimulating the economy, then the question may arise in the public mind: why do we need all these entities?
Professor Amartya Sen in his new book Collective Choice and Social Welfare which is a considerably expanded and updated version of his 1970 book with the same title, emphasizes that democracy must be understood as “government by discussion”. The idea of democracy being “government by discussion” really belongs to John Stuart Mill, though this particular phrase was coined by Walter Bagehot.
The same term is often employed by different people with different meanings, and this can be a source of immense confusion. The World Bank has done this to good effect in the past, taking over terms that are being used in a particular sense, especially by the Left, and using them in a very different sense, in order to create deliberate confusion and exploit in some way the sympathetic feeling that the term had attracted from people in its initial usage. “Structural adjustment” is a prime example of such appropriation by the World Bank.
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.
