Prabhat Patnaik’s Blog

India is facing an acute vaccine shortage. The impression that generally prevails is that this shortage is because while production capacity is slow to increase there has been a sudden spurt in vaccine demand since vaccination is now open for the 18-44 group in addition to the original 45+ group. This impression however is erroneous: while more people no doubt are now eligible for vaccination, there has been a sharp and mystifying drop in the absolute number of vaccinations in the month of May not just compared to the previous month but also compared to the country’s production capacity for…

Following its $1.9 trillion Covid-relief package, the Biden administration has further announced an infrastructure package of $2.3 trillion. But in contrast to the former which is to be spent within months, the latter is to be spent over an eight-year period. And this package in turn is to be followed by a “human infrastructure” package. All this adds up to a massive stimulus for the economy as well as a massive redistributive programme, especially since the infrastructure package is proposed to be substantially financed through an increase in corporate tax rates. Donald Trump had reduced corporate tax rates in the…

On March 24, 2020, Narendra Modi had announced that the country would go into a lockdown after four hours! This nation-wide lockdown was to last till the end of May, after which there were local lockdowns but not a general one. It brought acute hardship to millions of the working poor, among whom the migrant workers’ woes received global attention. What was striking about the Indian lockdown was that, in contrast to virtually everywhere else including the US under Trump, no compensation was offered to the people (except paltry amounts to a few specific target groups) for their loss of…

On October 2, 2020, even before any vaccines against Covid-19 had been approved, India and South Africa had proposed to the WTO that a temporary patent waiver should be granted on all such innovations. In the following months, 100 countries had supported this demand. And on May 5, the US, usually the most ardent defender of the patent system, agreed to a temporary patent waiver on anti-Covid vaccines, committing itself to “text-based negotiations at the WTO”. The basic argument for such a move arises from the urgent need at present to expand vaccine production. A patent works by creating artificial…

Of all the decisions taken by the Modi government the most mindless has been the so-called “liberalization” of vaccine distribution. Originally, the central government was the sole buyer from the two producing firms at a fixed price of Rs.150 per dose, and then, while itself distributing them free to the people, also used other channels for distribution, including private hospitals (who however charged Rs.250 per dose because they had to pay the central government for the vaccines). With “liberalization”, it suddenly made state governments and private hospitals buy vaccines directly from the firms at prices determined by the latter. Given…

When the country is grappling with the worst health crisis it has faced in a century, the Covid-vaccine producers have decided to seize the opportunity to go on a profiteering spree, taking advantage of the Modi government’s  incompetence or complicity (call it what you will). Two issues have to be distinguished at the outset: one, what should be the price for the Covid vaccine that consumers should be paying; and there can be little doubt that this price should be zero, as even Dr Arvind Subramaniam, a former chief economic adviser under the Modi regime has pointed out. The second…

The official wholesale price index for March 2021, which was released a few days ago shows it to be 7.39 per cent higher than for March 2020. Such a high rate of inflation has not been seen in India for over 8 years. It was only in October 2012 that the country had witnessed a 7.4 per cent inflation over the corresponding month of the previous year. The union government while releasing the index cautioned that since the country had witnessed a strict lockdown a year ago, the base figure on which inflation was being calculated was suspect, an underestimate…

U.S. President Joe Biden’s $1.9 trillion rescue package is one of the most ambitious measures to revive the U.S. and, with it, the world economy. Coming on the heels of Trump’s $2 trillion package last year and a further $900 billion package announced in December 2020, it seeks not just to provide relief from the pandemic but to start a new boom in the U.S. which, it is expected, will have spill-over effects for the world as a whole, notwithstanding the protectionist measures against imports introduced in the U.S. under Donald Trump. It will also raise the U.S. fiscal deficit…

When Elizabeth Warren a contender for American presidentship had proposed a progressive wealth tax during her campaign for Democratic Party nomination, 18 American billionaires had come out in support of her proposal; one cannot recall or even imagine any comparable behaviour in the Indian context. This is not because the American, or more generally Western, capitalists are particularly kind or generous towards those whom they exploit. It is because of their belief that the undisturbed functioning of the capitalist order in their countries requires a degree of concern on their part for the poor; it is a matter of their…

The Covid-19 crisis has seen a very different response from the advanced countries compared to the third world countries. The former have unrolled substantial fiscal packages for rescue and recovery while the latter have been trapped in fiscal austerity. Among third world countries, India’s fiscal package has been perhaps the most niggardly, amounting to no more than one per cent of GDP; but even other third world countries have not fared all that much better. By contrast, the US under Trump had unrolled a rescue package of $2 trillion, which is 10 per cent of its GDP; and Biden has…