Why the Corrupt Rich will Welcome Modi’s ‘Surgical Strike on Corruption’ Jayati Ghosh

Narendra Modi came to power in India on a promise to end corruption. Halfway into his tenure, little seems to have happened to achieve this goal. The most obvious steps – such as taking a strong line on the known illegal accounts held in Swiss banks and tax havens, or ending the ability to hold shares without revealing your identity, or making funding of political parties transparent – have simply not been taken. People were beginning to murmur that the government had not lived up to its grandiose promises. So last week Modi did some more of the smoke and…

The Political Economy of Demonetising High Value Notes Jayati Ghosh

The Modi government is extremely adept at optics, at policy measures presented in a blaze of publicity that dazzles the public, rather than with the required attention to detail that might ensure their success. The latest announcement of the demonetisation of high value bank notes is of the “shock and awe” variety of measures. While presented as evidence of the government’s supposedly firm resolve to root out black money, in reality it will barely touch the problem of generation of black money, even as it is being implemented in a way that causes immense economic harm to ordinary people and…

Demonetization of Currency Notes Prabhat Patnaik

Narendra Modi went on national television at 8 p.m. on November 8 to announce that from midnight of that very date, i.e. in a mere four hours’ time, 500 and 1000 rupee notes would cease to be legal-tender. The justification advanced for this bizarre move was that it would strike at “black money”. An additional argument was thrown in, to the effect that fake currency notes used by “terrorists” would now cease to be effective; and some particularly enthusiastic supporters of the government even went to the extent of calling it a “surgical strike against terrorism”. I shall come to…

The Hegemony of Finance C. P. Chandrasekhar

Three parallel developments that caught media attention over the last month point to the restoration of the hegemony of Finance Capital in the years since the 2008 crisis. They also reveal the likely consequences of the neoconservative backlash, led by Finance, against post-crisis financial sector reform in the US and other developed countries. One was the decision of the Financial Sector Protection Bureau (FSPB) of the US, an institution created after the 2008 crisis, to arrive at a settlement with Wells Fargo (WF) in an investigation relating to a rather shocking discovery. More than 5000 employees of the bank had,…

An Overburdened Instrument C. P. Chandrasekhar

On August 9, RBI Governor Raghuram Rajan released the last bi-monthly monetary policy statement that would be drafted under his leadership. No changes were made: the benchmark ‘repo’ rate was kept at 6.5 per cent, the cash reserve ratio at 4 per cent and the Statutory Liquidity Ratio at 21.5 per cent. According to the RBI, growth in this fiscal is projected at 7.6 per cent because of the beneficial effects of the good monsoon and the expansionary effects of the implementation of the 7th Pay Commissions recommendations. So growth is not an immediate problem. But, in the view of…

Revised Version of India’s New Model Bilateral Investment Treaty Andrew Cornford

Introduction The initial 2015 draft of a new model Indian bilateral investment treaty contained stringent provisions concerning the definition of investment covered, non-applicability, the obligations of the two parties in the case of claims, and exceptions. [The initial draft was reviewed in SUNS 8094, 17 September and SUNS 8095, 18 September]. These provisions were criticised at the time as likely to hinder foreign direct investment and thus as counterproductive. Revisions of the model in a new draft have introduced greater flexibility under some but not all of these headings and have also included some extensions of rules in the initial…