Crop Insurance: Another dressed up scheme C. P. Chandrasekhar

Among the pro-farmer policies that the NDA government claims to have initiated, one often flagged is the modified crop insurance scheme titled Pradhan Mantri Fasal Bima Yojana (PMFBY). Effective as of kharif season 2016, this scheme is supplemented with the Restructured Weather Based Crop Insurance Scheme (RWBCIS). While in the former crop loss is computed by comparing actual yield in a season based on crop cutting experiments by state government agencies with an indicator of expected or ‘threshold’ yield, in the latter it is computed using leading weather indicators. Together, the schemes promise enhanced and more reliable crop insurance for…

Institutional Investors and Indian Markets C. P. Chandrasekhar and Jayati Ghosh

These are uncertain times for emerging market economies (EMEs) like India. They have been important destinations for investments financed by the cheap liquidity that was pushed into the financial system by developed country central banks attempting to address the financial crisis of 2008 and after. The result has been the accumulation of large sums of portfolio investments in their equity and debt markets. This has generated fears that, as central banks in the US, EU and elsewhere unwind their easy money policies and raise interest rates from their historic lows, this capital will exit the emerging markets. Once access to…

Capitalism’s Discourse on “Development” Prabhat Patnaik

Capitalism’s discourse on “development” which has become quite influential all over the third world in the neo-liberal period proceeds as follows: (i) “development” must consist in shifting the work-force from the traditional (petty production) sector which is overcrowded with low labour productivity, and hence constitutes a repository of poverty,  to the modern (capitalist) sector which has much higher labour productivity. (ii) For this shift to occur, the modern (capitalist sector) must be allowed to grow as rapidly as possible, for which all impediments to capital accumulation must be removed. (iii) Even if, in the process of the modern (capitalist) sector’s…

Argentina: The risk of transforming a currency crisis into a financial crisis Alejandro Vanoli

Despite past experiences, the recent agreement between Argentina and the IMF includes unrealistic projections. On Friday, July 13th, the IMF staff report on its Argentina agreement was released. There, the staff has sought to protect itself, warning of the risks inherent in the dynamics of the Argentine situation. But the tango between the IMF and Argentina is inconsistent and unsustainable  because of the unrealistic projections incorporated in the agreement, the rigidity generated by the limitations in the use of monetary and exchange rate instruments to face the crisis, and the validation of policies that will aggravate the crisis. The agreement…

The Devaluation of the Academia Prabhat Patnaik

We are about to witness a major change. Academics are going to be marginalized in the process of decision-making relating to academic matters. An implicit marginalization has been going on for some time, but now it will get the imprimatur of a parliamentary legislation. A legislation drafted by the Ministry of Human Resource Development seeks to abolish the University Grants Commission altogether. Its fund-distributing role will be taken over by the Ministry itself, while its supervisory role will be implemented by a newly created Higher Education Commission of India. The composition of this proposed Higher Education Commission will be as…

Did developing countries really recover from the Global Crisis? C. P. Chandrasekhar and Jayati Ghosh

We are nearing the tenth anniversary of the collapse of Lehman Brothers in the United States that sparked a Global Financial Crisis,affecting every economy in significant ways. That crisis generated extraordinary monetary policy responses in the advanced economies, with low interest rates and unprecedented expansion of liquidity, in an effort largely driven by central banks to keep their economies afloat. By contrast, expansionary fiscal policy was barely used after the first initial stimulus. In the event, even with these incredibly loose monetary policies, the advanced economies have generally spluttered along, with periodic hopes of recovery dashed by repeated slowdowns –…

A Legacy of Vulnerability C. P. Chandrasekhar and Jayati Ghosh

Recent months have been marked by an exit of foreign investors from India’s financial markets, triggered by the end of quantitative easing in the US and Europe and hikes in policy interest rates in the former. This has resulted over the last few weeks in a sharp depreciation of the rupee relative to the dollar, which not only raises the rupee costs of imports, but also the rupee equivalent of payments made to service foreign debt. That has meant that India is now paying the price for a legacy of debt built up during the years when the Federal Reserve…

The Indiscreet Aggression of the Bourgeoisie C. P. Chandrasekhar

Neoliberal economic policy—the framework of measures that preaches market fundamentalism but uses the state to engineer a redistribution of income and assets in favour of finance capital and big business—has lost its legitimacy. A huge financial crisis and a decade of recession or low growth, that have hurt most sections except the elite 1 per cent, have convinced the majority in many countries that neoliberalism is no alternative. That change in mood was revealed by the Brexit vote and the Trump victory among other developments. However, this has not setback but unleashed a new aggression on the part of the…

It is imperative to reconstruct the Internationale of workers and peoples Samir Amin

For the last thirty years the world system has undergone an extreme centralization of power in all its dimensions, local and international, economic and military, social and cultural. Some thousand giant corporations and some hundreds of financial institutions that have formed cartels among themselves, have reduced national and globalized production systems to the status of sub-contractors.  In this way the financial oligarchies appropriate a growing share of the profits from labour and from companies that have been transformed into rent producers for their exclusive benefit. Having domesticated the main right-wing and left-wing parties the unions and the organizations of the…

Has Donald Trump Already Changed US Trade? C.P. Chandrasekhar and Jayati Ghosh

There is no doubt that President Trump is upending global trade. He has unleashed a trade war with China as well as with some of the US’ s purported allies, using grounds of “threats to national security” to impose tariffs on many US imports. The likely retaliation will obviously affect some US exports in turn. The trajectory of world trade suddenly looks quite uncertain – and this will also depress investment across the trading world. So the Trump effect on world trade is clearly just beginning. But the naked self-interest of Trump’s moves, the “America first” orientation declared by the…