A Dangerous Period Prabhat Patnaik
For over half a century after the second world war, fascism had ceased to be a serious political force anywhere. There were no doubt many authoritarian, even murderous, regimes, and military dictatorships, especially in the third world, often installed through CIA-backed coups against progressive nationalist governments, and enjoying the tacit support of the U.S. But these must be distinguished from fascist regimes, which rely on mass political mobilization by arousing hatred against some hapless minority. For people of my generation, and several succeeding ones, the main contest appeared to be between liberalism and socialism. There were I believe, two major…
The Economic Survey 2017-18 Prabhat Patnaik
Like the person on the proverbial tiger, the Indian economy is currently riding a precarious course. The Government of India’s Economic Survey for 2017-18 recognizes this frankly, but its panacea is to keep one’s fingers crossed and hope that the ride continues. The macroeconomic data it presents are closer to those of the IMF’s World Economic Outlook Update prepared for the Davos meet than to the figures of the Indian government’s own Central Statistical Office. Its GDP growth estimate for the current fiscal year is 6.75 percent (compared to the IMF’s 6.7 percent and the CSO’s 6.5); and in the absence of anything untoward,…
The 2018-19 Union Budget Prabhat Patnaik
The Union Budget for 2018-19 sets a new record for cynical dissimulation. To be sure there is a certain amount of “window dressing” in all budgets, but the announcement of fantabulous schemes with scarcely a paisa earmarked for them, as has happened this year, is quite unprecedented in the annals of budget-making in India. Consider for instance the much-hyped “World’s Largest Healthcare Programme” announced in this budget, which is supposed to provide insurance cover for up to Rs.5 lakhs per family to 10 crore families constituting 40 percent of India’s population. The total sum allocated for this programme is a…
The Dramatic Rise in Wealth Inequality Prabhat Patnaik
Oxfam has just produced a report in which it highlights the dramatic increase in wealth inequality that is occurring in India. The basic data it uses are from Credit Suisse which regularly brings out a Global Wealth Databook; and according to Credit Suisse the top 1 percent of the population in India cornered 73 percent of the additional wealth generated in the year 2017. This is an incredible figure in itself. What is more, this percentage, which refers to the latest year, is higher than the overall figure that had prevailed prior to this year, which was 58 percent. The…
Arun Jaitley on Electoral Bonds Prabhat Patnaik
Arun Jaitley had outlined a scheme of electoral bonds in his budget speech on February 2, 2017. Now, exactly 11 months later, the notification of the scheme and some details of it have finally been announced in a Press Information Bureau release on January 2, 2018. Along with this release Jaitley himself has also written an explanation-cum-defence of the scheme, from which it is clear that the scheme, far from countering the threat to democracy arising from large-scale corporate funding of elections, does not even address this issue. On the contrary, its implementation will have the very opposite effect of…
A Year of Wilful Economic Disaster Prabhat Patnaik
The uniqueness of 2017 lies in the fact that never before has the country seen a government-caused economic crisis as serious as was witnessed in this year. There have certainly been worse years for the people, such as 1965-66, 1966-67, and 1973-74, each of which saw massive inflation. But these were years when economic hardships occurred for reasons that had nothing to do proximately with government policy. 1965-66 and 1966-67 when the “Bihar famine” had occurred, had seen a sharp drop in food grains output, a drop that had lasted two years. The probability of such an event, statisticians told…
The Problem with the Indian Left Prabhat Patnaik
The current problem with the Indian Left, and in this term I include all sections of the Left, from the so-called “parliamentary Left” to the so-called “revolutionary Left”, is in my view, its lack of appreciation of the dialectics between “reform” and “revolution”. There have been many critiques of the Indian Left, but none to my knowledge has made this point; and their not making this point is perhaps indicative of the fact that the critics themselves suffer as much from this lack of appreciation of the dialectics between “reform” and “revolution” as the Left that they are critiquing. Before…
A Dangerous Bill on Banks Prabhat Patnaik
The BJP government, it appears, cannot remain content without inflicting irreparable damage on the institutions of the Indian economy. Its latest move in this direction is the Financial Resolution and Deposit Insurance (FRDI) Bill which was introduced in parliament on the last day of the winter session and is now with a Select Committee. What this Bill proposes is the setting up of a Resolution Corporation, consisting largely of central government officials, which, in the case of stressed banks whose condition is considered “critical”, will use creditors’ money, including that of depositors, to overcome the default by borrowers. Until now…
Marx and Naoroji Prabhat Patnaik
In the early 1850s Karl Marx, living in Dean Street in London’s Soho, was working on his opus Capital, of which a preliminary fragment was published in 1859 as A Contribution to the Critique of Political Economy. He had little income, but whatever he had was earned from writing occasional articles for the New York Daily Tribune, among which were a series of remarkable pieces on British rule in India. The trips he made to the British museum for consulting documents for Capital must have also been used by him for reading on India which provided the material for the…
Banks and Non-performing Assets Prabhat Patnaik
What exactly constitutes a non-performing asset (NPA) of a bank is not easy to determine. Since banks tend to roll over credit to borrowers, whether the request for such a roll over arises in the normal course of business or owing to a fundamental inability to pay back the loan, is difficult to decide. The tendency of late therefore has been to see NPAs as an extreme case of a wider category called “stressed assets” which are defined according to certain criteria. The problem of NPAs has arisen in a serious form in recent times because of the change in…