To Eliminate Poverty, Better Understanding Needed Jomo Kwame Sundaram and Anis Chowdhury

As the United Nations' Second Decade for the Eradication of Poverty (2008-2017) comes to an end, more self-congratulation is likely. Claims of victory in the war against poverty will be backed by recently released poverty estimates from the World Bank, entrusted by the UN system to monitor poverty. Mismeasuring Poverty The latest Bank data on global poverty suggests that 767 million people, or 10.7% of the world's population, live in extreme poverty, compared to some 42% of the world's population in 1981. Earlier figures suggested that most progress was due to East Asia, especially China. The Bank's international poverty line…

The Current Upsurge of Fascism Prabhat Patnaik

There is at present an upsurge of fascism all over the world, though it is often described as “nationalism” or “Right-wing populism”. Such terms however are misleading, and reflect a neo-liberal mindset. The pejorative use of the term “nationalism” serves implicitly to laud neo-liberal globalization as its contrast; it is also misleading because it does not distinguish between the “nationalism” of a Gandhi and the “nationalism” of a Hitler. Likewise, the term “populism” is used these days to characterize all redistributive or Welfare State measures, contrasting them unfavourably with neo-liberal measures of “development”; to apply it to the current fascist…

Hunger in Africa, Land of Plenty Jomo Kwame Sundaram and Anis Chowdhury

Globally, 108 million people faced food crises in 2016, compared to about 80 million in 2015 – an increase of 35%, according to the 2017 Global Report on Food Crises. Another 123 million people were ‘stressed', contributing to around 230 million such food insecure people in 2016, of whom 72% were in Africa. The highest hunger levels are in Sub-Saharan Africa (SSA) according to the Global Hunger Index 2016. The number of ‘undernourished' or hungry people in Africa increased from about 182 million in the early 1990s to around 233 million in 2016 according to the FAO, while the global…

The de-digitisation of India Jayati Ghosh

So it’s official: cash use is back in almost full force in the Indian economy. Cash withdrawals from ATM machines – a reasonable if incomplete proxy for the use of cash in the economy – are nearly back to the level of just before the demonetisation shock of 8 November 2016. RBI data on use of debit and credit cards to withdraw money from ATMs show that such withdrawals, which had collapsed to only Rs 850 billion in December 2016 largely because of the sheer unavailability of cash with such machines, amounted to Rs 2.27 trillion in July 2017, only…

Strangulating the Informal Economy Prabhat Patnaik

The fact that there has been a slowdown of late in the rate of growth of the Indian economy is accepted by all, including even Narendra Modi in his all-over-the-place diatribe against critics on October 4. The government however sees it as remediable since the economy, it believes, “is on the right track”. The first question to ask however is: why should it matter if the year-on-year quarterly GDP growth-rate has been slowing down for the last six consecutive quarters and is now down to 5.7 percent in the first quarter of 2017-18 (which is the lowest for any quarter…

Create a crisis and make it worse C. P. Chandrasekhar

On August 10, the government tabled a new bill in Parliament, with the aim of using its majority to push through a desperate policy initiative in the form of the Financial Resolution and Deposit Insurance (FRDI) Act. The Act seeks to create an ostensibly ‘independent’ FRDI Corporation, which would take over the task of resolution of failing financial firms from the Reserve Bank of India and other regulators. To that end, it is to be armed with special and near draconian powers to implement its mandate, and given control of the deposit insurance framework currently managed by the Deposit Insurance…

The Class Content of the Goods and Services Tax Prabhat Patnaik

The discussion on the Goods and Services Tax (GST) until now has focused almost exclusively on the distribution of its burden across commodities, on the difficulties of meeting its stringent bureaucratic demands, and on the delays in obtaining claims for refunds. Even the view that it is pushing the economy into a recession has attributed this looming recession merely to its stringent procedural demands which supposedly have tied most sellers in knots. In all this however the class content of this new tax regime has been missed. Indeed many would even ask: if one kind of indirect tax regime which…

Greater Cooperation To Strengthen Taxation Jomo Kwame Sundaram

Since the 1950s, there has been a popular dance called the ‘limbo rock', with the winner leaning back as much as possible to get under the bar. Many of today's financial centres are involved in a similar game to attract customers by offering low tax rates and banking secrecy. How Low Can You Go?  This has, in turn, forced many governments to lower direct taxes not only on income, but also on wealth. From the early 1980s, this was dignified by US President Ronald Reagan's embrace of Professor Arthur Laffer's curve which claimed higher savings, investments and growth with less…

The Growing Income Inequality Prabhat Patnaik

Thomas Piketty and Lucas Chancel have just written a paper as part of their work for the World Inequality Report discussing the movement of income inequality in India. And their conclusion is that the extent of income inequality in India at present is greater than it has ever been at any time in the last one hundred years. Their estimates go back to 1922 when the Income Tax Act became operational in India. The share of the top 1 percent of the population in total income at that date was around 13 percent. It increased to 21 percent by the…