Prabhat Patnaik’s Blog

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 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…

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…

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 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…

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…

The debate over inequality has become hotter world-wide. While Trump had introduced substantial tax cuts for the rich in 2017, and Britain’s Boris Johnson, the front-runner to succeed Teresa May, has promised to do the same if he becomes Prime Minister, there are strong proposals for taxing the rich which have also been mooted. Bernie Sanders had such a proposal for the U.S. during the time that he was seeking the Presidential nomination of the Democratic Party. And now a group of 18 individuals in the U.S. including George Soros, each of whom is a billionaire, is asking for a…

The “Gross Domestic Product” is a concept rooted in an epistemic position which is intrinsically incapable of recognizing the existence of a “surplus” in society. A simple example will make this clear. Suppose we have an agrarian economy in which 100 peasants produce 100 units of food; and suppose 50 of these are taken by an overlord through taxes, for consumption by his family and hangers-on. These 50 units will be readily recognized as constituting a “surplus” out of the total output of 100. But the concept of GDP would not recognize this. Instead it would claim that the GDP…

The report of the Periodic Labour Force Survey (PLFS) conducted in 2017-18 is finally out, and it confirms what had been leaked earlier, namely a dramatic increase in the unemployment rate in the Indian economy. The unemployment rate is given under two heads: usual status unemployment and current weekly status unemployment. These can be understood as follows. If a person is employed or seeking work for more than half the time (“majority time”) during the preceding 365 days before the date of the survey then his or her “usual status” is that he belongs to the labour force; but if…

The post-second world war years had seen systematic intervention by the State to stabilize capitalist economies. In fact State intervention had played the same role in that period that incursions into colonial and semi-colonial markets had played earlier, over much of the nineteenth century, right until the first world war. This role consisted in ensuring that one component of aggregate demand, whether exports to such markets or State expenditure, kept growing even when there was a downswing in the level of activity in the capitalist economy. One component of aggregate demand in other words, which determined the level of activity,…