The 15th Finance Commission and Defence Expenditure Prabhat Patnaik
On July 29 the terms of reference of the Fifteenth Finance Commission were suddenly modified by a Presidential order. The Commission is now being asked to examine whether a separate mechanism for financing expenditure on defence and internal security should be set up, and how it can be operationalised. The basic idea behind this Presidential order which has already been discussed and approved by the Union cabinet is to make the expenditure on defence and internal security a charge on the gross tax revenue of the central government before the size of the divisible pool which the Centre has to…
Some Comments about Marx’s Epistemology Prabhat Patnaik
I Marx’s eleventh thesis on Feurbach: “the philosophers have hitherto only interpreted the world in various ways, the point is to change it”, has been often taken to mean that interpreting the world and changing the world are two separate and disconnected activities. This however is not true. In my student days I remember being struck by a Left-wing philosopher’s remark that “to interpret the world is to change it”. And it also stands to reason that one cannot change the world without interpreting it. The two activities in short are not disjointed; what did Marx mean then by the…
The Systemic Crisis of World Capitalism Prabhat Patnaik
The hallmark of a systemic, as distinct from a cyclical or sporadic, crisis of capitalism is that every effort to resolve the crisis within the broad confines of the system, defined in terms of its prevailing class configuration, only worsens the crisis. It is in this sense that neo-liberal capitalism has now entered a systemic crisis. It cannot be resolved by mere tinkering; and attempts to go beyond mere tinkering, for instance by introducing protectionism without transcending the broad framework of neo-liberal globalization, i.e. without overcoming the hegemony of international finance capital which is the moving force behind this globalization,…
Article 370 and Kashmir’s Land Reforms Prabhat Patnaik
Jammu and Kashmir was the first state in the country to introduce land reforms. There were two components of J&K’s land reforms. First, the system of absentee landlordism,that had prevailed during the Maharaja’s time was completely done away with. The land of the absentee landlords was taken over without any compensation and simply distributed among the tenants; whoever was cultivating whatever amount of land on the absentee landlord’s estate as tenant was simply given ownership of that much of land without having to pay any amount of money for obtaining ownership. Secondly, a land ceiling of 22 ¾ acres (182…
Amit Shah’s Economics Prabhat Patnaik
In justification of the move to end Kashmir’s special status, Amit Shah in his speech in the Rajya Sabha brought in the question of Kashmir’s “development”, arguing that closer integration with the rest of India will bring in much investment into the region. He especially appealed to the youth of Kashmir, promising that they would have larger employment opportunities. When unemployment in India has never been as bad as now in the last 45 years, to claim that closer integration with India will improve Kashmir’s employment prospects, is ironical. But let us look at the argument closely. Special status or…
Fifty Years after Bank Nationalization Prabhat Patnaik
Fifty years ago on July 19, 1969, fourteen large private banks had been nationalized. Ironically the Golden Jubilee of that event, which had been a significant step in the process of building up a new financial architecture for the country, is being celebrated today by trade unions in the banking sector but not by the government of the day. The argument that had been given for bank nationalization had been simple: since credit represents command over capital, how this command is distributed across sectors, across social groups and across regions, determines the trajectory of social development. If the distribution of…
Some Disquieting Trends in the Budget Prabhat Patnaik
It is clear by now that the figures provided in the 2019-20 budget are palpably unfounded. The budget has concealed the actual receipts and expenditures for 2018-19 even though these were available, because they show huge shortfalls compared to the budget estimates for that year. And all its estimates for 2019-20 are projections based on the revised estimates for 2018-19, which are close to the budget estimates for that year, rather than the much lower actuals. Hence the budget figures for the coming year cannot be taken seriously. An air of mendacity pervades the entire budget. But while its figures…
The Current Eclipse of The Left Prabhat Patnaik
I am often asked: why has the Left, so powerful less than a decade ago, suddenly got eclipsed? The question is pertinent. True, the eclipse of the Left is mainly in the electoral arena, and the Left’s strength has to be judged in much more than electoral terms. But in one respect at least, which I consider important, the Left has got eclipsed, and this relates to its ability to draw young people into its fold. It has always been able to draw some of the best and the brightest among the youth into its ranks; it still does, but…
The Sluggish Growth in Tax Revenue Prabhat Patnaik
The growth in tax revenue of the Union government has slowed down perceptibly in the last two years. The growth (over the previous year) in total tax revenue accruing to the Centre was 17 percent in 2016-17; it slowed to 11 percent in 2017-18, and further to a mere 8 percent in 2018-19. Since this growth is in nominal terms, the growth in real terms has been even slower. In fact in 2018-19 the growth in real tax revenue could not have been more than about 3 percent over the previous year, which is much less than the growth in…
Much ado about nothing Prabhat Patnaik
Economics has never been a strong point of the NDA government. Its only two major economic forays, demonetization and the GST, have both turned out to be pretty disastrous. It was futile therefore to expect much from the budget for 2019-20. Even so, one is surprised by the budget’s lack of engagement with the current problems of the economy, which are serious: a slowing down of activity, agrarian distress, massive unemployment, and external payments worries exacerbated by Trump’s belligerence. There has been a perceptible slowdown in revenue growth of late, partly because of the slowdown in activity, but mainly on…