Economy Plunging Headlong into Recession Prabhat Patnaik

Volume II of the Economic Survey which was brought out by the Ministry of Finance a few days ago paints an extremely grim picture of the Indian economy. The growth rate of real Gross Value Added (GVA which is the appropriate thing to look at, since the GDP measure includes net indirect taxes and hence does not truly reflect output trends), was 6.6 percent for 2016-17 as a whole, compared to 7.9 percent for 2015-16. More importantly, the quarterly growth rate (i.e. the growth rate of GVA in a particular quarter over the corresponding quarter of the preceding year) kept…

Beyond Fantasies of Industry 4.0 Erinç Yeldan

As global capitalism advances through the second decade of the 21st century, three observations stand out: Deflation, i.e. collapse of all prices (inclusive of wages and interest rates) Stalled productivity growth Widening income inequalities and deepening of fragmentation and social exclusion. While the mainstream attempts to trivialize these as the new normal, the deflationary environment leads to the deceleration of the rates of profit along with commodity prices, and restrains the re-production opportunities of global capital. In the meantime, fragmentation of income strata and heightened social exclusion constitute the main source of irregular migration and increased social violence globally. Concomitantly,…

After neoliberalism, what next? Jayati Ghosh

We may be living through one of those moments in history that future historians will look back on as a watershed, a period of flux that marked a transition to quite different economic and social arrangements. Unfortunately, in human history a ‘moment’ can be a very long time, so long that it could be decades before the final shape of the new arrangements are even evident; and in the interim, there could be many ‘dead cat bounces’ of the current system. What is clear is that the established order – broadly defined as neoliberal globalised finance capitalism – is no…

Financing Education Prabhat Patnaik

The Draft National Education Policy unveiled by the central government puts forward a bizarre line of reasoning. Education, it is argued on the basis of a long-held and honourable belief going back to the Kothari Commission, should have an annual expenditure of around 6 percent of the Gross Domestic Product; we have come nowhere near this figure even after so many years and cannot do so on the basis of government effort owing to our stretched budgetary resources; hence, to realize this target, which most right-thinking persons in the country would accept, we must draw the private sector into the…

Twenty Years after The Asian Financial Crisis Prabhat Patnaik

Exactly twenty years ago, a major financial crisis had hit the countries of East and South East Asia in July 1997. This crisis was a watershed in the history of third world development, in the sense that these “tiger economies” which had seen extraordinarily high growth rates until that time, remained permanently crippled thereafter. Just around the time that they were shaking off the effects of the 1997 crisis on their respective economies, the collapse of the “housing bubble” in the United States plunged the entire world capitalist system into a crisis which also affected them, so that they could…

NPAs: All talk and no action C. P. Chandrasekhar

The media are full of it. Viral Acharya, a recently inducted Deputy Governor of the Reserve Bank of India (RBI), has declared publicly that resolving the problem of bank stress resulting from large non-performing assets (NPAs) on their balance sheets is the RBI’s priority, taking precedence over measures such as interest rate reduction to spur growth. The issue here is not just one of preventing bank insolvency, but of keeping the credit pipe open. Banks burdened with NPAs are likely to be less willing to expand their loan books, and if interest rates are too low, banks may be unwilling…

RCEP: Is the mega FTA leading us into non strategy? Smitha Francis

As the 19th Round of the RCEP (Regional Comprehensive Economic Partnership) negotiations winds up in Hyderabad, India, there are many grounds for being apprehensive about the direction in which it has moved. RCEP is one of the two proposed mega free trade agreements (FTAs) aiming at greater integration in the Asia-Pacific region, the other being the Trans-Pacific Partnership (TPP). Beginning in May 2013, the RCEP negotiations are being undertaken between the ten member countries of ASEAN and its six FTA partners Australia, China, India, Japan, New Zealand and South Korea. The initiative was launched to address concerns about the ‘noodle…

Progressive Mobilization in Europe Jayati Ghosh

Meetings of global leaders – such as recently occurred in the G20 meeting at Hamburg – increasingly have a ring of farce about them. The inability to come to agreement on pretty much anything of significance is leavened only by sideshows and media obsession with which global leader met with whom for how long, who sat in for which President at the “high table”, and similar trivia. Meanwhile, there is abject failure on the part of these leaders to recognize the pressing need for urgent and co-ordinated global action to solve so many current problems, ranging from the terrible state…

Three Deaths Prabhat Patnaik

When one reaches a certain age, one has to steel oneself to the idea of hearing periodically the news of one’s friends passing away. But when the passing of several friends gets concentrated within a very short span of time, when each of them has been a brilliant person whose loss the country, not just one personally, can ill-afford, and when their deaths, by modern-day standards, are pre-mature, then such news become difficult to bear. Three such outstanding individuals passed away in the course of the last six or seven weeks. I received the news of each passing with a…

The Hamburg Fiasco C. P. Chandrasekhar

The summit of the leaders of G20 meetings that met in Hamburg early July was nothing short of a fiasco. Outside the meeting, the massive protest demonstration and the unwarranted aggression of a huge police force made clear that these leaders lacked legitimacy. Inside, all that could be achieved was a “unanimous” communique, in which in language rendered almost meaningless by diplomacy, the contrary opinions of the leaders, especially the differences between the US and the other 19, were spelt out. To the credit of the drafters of the declaration it must be said that they managed one half-truth at…