Privatization Promotes Collusion and Corruption Jomo Kwame Sundaram

At the risk of reiterating what should be obvious, the question of private or public ownership is distinct from the issue of competition or market forces. Despite the misleading claim that privatization promotes competition, it is competition policy, not privatization, that promotes competition. Privatization the problem, not the solution Instead, privatization has typically been accompanied by collusion, which undermines competitive pricing. Formal and, more commonly, informal collusion is rife. Informal collusion is more likely among those involved in public or transparent bidding to provide privatized or contracted-out services. Transparent institutions and arrangements, such as public auctions and open, competitive bidding…

Unemployment, Poverty and The Modi Years Prabhat Patnaik

Numerous agencies from the Labour Bureau of Shimla to the Centre for Monitoring the Indian Economy to Oxfam have been drawing attention to the grim unemployment situation in India at present. The government however not only continues to be in a denial mode, but has actually suppressed all official statistics that go against its claims. But like the proverbial thief hiding behind curtains whose shoes nonetheless are visible from outside, the government’s hiding behind suppressed statistics is of no avail; its own figures given in other places, like the thief’s shoes, reveal the truth. And these other places are not…

Making hay in the markets C. P. Chandrasekhar

India’s stock markets seem to be riding one more bubble. Between 19th February and 29th March, the Sensex rose by 9.3 per cent. The trend has not been restricted to a few stocks. The S&P BSE 100, which tracks 100 and not just 30 stocks, also rose by 9.8 per cent between those dates. In fact, financial year 2018-19 as a whole seems to have been a good period for punters, with the Sensex outperforming many global markets. Among the explanations doing the rounds is that confident of a return of a market-friendly, Modi-led government, investors are making hay in…

World Bank Dispossessing Rural Poor Jomo Kwame Sundaram and Anis Chowdhury

The World Bank's Enabling the Business of Agriculture (EBA) project, launched in 2013, has sought agricultural reforms favouring the corporate sector. EBA was initially established to support the New Alliance for Food Security and Nutrition, initiated by the G8 to promote private agricultural development in Africa. The New Alliance has been touted as "a new model of partnership" for agricultural transformation in Africa. The Bank has used the EBA to address the land issue in developing countries, particularly in Africa. The effort is strongly supported by the US and UK governments as well as the Gates Foundation, all strong proponents…

The NYAY Scheme of the Congress Prabhat Patnaik

My attitude to the NYAY scheme of the Congress is similar to my attitude to a benevolent monarchy. While a benevolent monarchy is better than a tyrannical one, any monarchy is repugnant compared to a republic. Likewise compared to the current neo-liberal regime any scheme of transfers to the poor is welcome. But NYAY amounts to a largesse by the government, an act of charity towards the bottom quintile, not the institution of a universal economic right to decent living. I find targeted transfer schemes like NYAY repugnant compared to a regime of universal rights. Poverty and unemployment in society…

Has Privatization Benefited the Public? Jomo Kwame Sundaram

In most cases of privatization, some outcomes benefit some, which serves to legitimize the change. Nevertheless, overall net welfare improvements are the exception, not the rule. Never is everyone better off. Rather, some are better off, while others are not, and typically, many are even worse off. The partial gains are typically high, or even negated by overall costs, which may be diffuse, and less directly felt by losers. Privatized monopoly powers Since many SOEs are public monopolies, privatization has typically transformed them into private monopolies. In turn, abuse of such market monopoly power enables more rents and corporate profits.…

The Modi Years Prabhat Patnaik

In its attack on civil liberties, its restructuring of the State to effect an acute centralization of power, and its pervasive purveyance of fear, the Modi years resemble Indira Gandhi’s Emergency. But the resemblance stops there. In fact the two differ fundamentally in several ways. First, there were no lynch mobs, and street thugs, terrorizing people and giving them lessons in “nationalism” during the Emergency. It was only the State that repressed people then; but now we also have gangs of Hindutva hoodlums, who force critics of the government to apologize for their “misdemeanor”, with the additional threat of arrests…

The Political Economy of the Modi Regime C. P. Chandrasekhar

At the end of its five-year term, the NDA government’s claim that the Indian economy has experienced rapid growth during its tenure sounds shallow. The GDP numbers many observers argue are wrong and possibly fabricated. The GDP figures have since 2011-12 been computed using some new data sources and a changed methodology, showing the economy in much better light when compared with the series with 2004-05 as base. But the change was so drastic that for the official statistical agency could not for long put out a “back series” that allowed comparison of performance across time. Scepticism about the GDP…

How to deliver a real minimum income guarantee to India’s citizens Jayati Ghosh

The Congress Party’s recent declaration that if voted to power, it will seek to ensure a minimum income to 20 per cent of the poorest households in the country is laudable in intent. It also brings back policy attention to the penury and insecurity that continue to plague much of India’s population, and particularly the most destitute. But as presented, it is completely unworkable – and if the Congress Party is really serious about this goal of eliminating poverty, it will have to think of a different way of reaching it. Consider the broad outlines of the scheme that was…

The Abysmal State of Economic Decision Making Prabhat Patnaik

The minutes of the Board meeting of the Reserve Bank of India just prior to the announcement that currency notes of Rs.500 and Rs.1000 denomination were being demonetized are now available in the public domain, thanks to an RTI query. And what they reveal is the abysmal state of decision-making on economic policy that prevails under the Modi government. To be sure, economic decision-making has always been informed by class bias; but that is not what I am referring to here. Even when a decision is taken on the basis of the interests of the ruling classes, the argument for…