What is really happening in Indian Manufacturing? C.P. Chandrasekhar & Jayati Ghosh

Data on organised manufacturing production do not really capture the impact of demonetisation and its effects on demand, but looking at some sub-sectors of consumer non-durable goods provides more insight. Indian_Manufacturing (Download the full text in PDF format) (This article was originally published in the Business Line on August 14, 2017.)

Beyond Fantasies of Industry 4.0, Where Global Capital Has No Answers Erinç Yeldan

Together with the collapse of the Soviet system, China’s and India’s opening up to the global markets have added 1.5 billion new workers to the world’s economically active supply of wage-labor.  This meant almost a doubling of the global labor force and a reduction of the global capital-labor ratio by half.  With intensified pressures of unemployment looming everywhere, wage earners had witnessed a race to the bottom not only of their wage remunerations, but also of their social rights and work conditions. Complemented with the neoliberal policies invoking flexibility and privatization, global wage-labor had suffered serious informalization and vulnerability, consequent…

Power: The web of debt C. P. Chandrasekhar

The state of Jharkhand has reportedly stopped payments to the Damodar Valley Corporation (DVC) for the 700 MW of power the later supplies it every day. The evident reason is that it has not been able to cover payments for the power it acquires from the generators and supplies to its customers, resulting in deficits that are covered with debt that it is no longer able to service. A consequence of this would be an inability to purchase power from the generators, increasing their losses and affecting the debt they in turn owe the banks. With this debt being a…

Demonetisation and India Inc C. P. Chandrasekhar

In Finance Minister Arun Jaitley’s pre-Budget meeting with members of India’s Chambers of Commerce and Industry and other special category capitalists like exporters, the latter reportedly told him that while demonetisation is a welcome move, the government must “offset the immediate downturn that industry will go through”. This was accompanied by a range of demands varying from reduced corporate taxes to special export incentives and accelerated privatisation. In sum, India Inc had its own ideas of how the short term pain of demonetisation could be converted into long term gains for itself, though the policies recommended to ensure the realization of…

Uncertain Media Future C. P. Chandrasekhar

In today’s troubled times, mega-mergers are the norm. Announcements of marriages like that between AB Inbev and SABMiller in the beer industry or Bayer and Monsanto in the agribusiness sector attract attention that soon fades, even as the difficult task of getting clearances from the regulators continues. But the just announced agreement to merge by AT&T and Time Warner, in a $85 billion deal, is likely to remain in public discussion for some time. If it does not, it should. This is a mega merger not just in any industry like the production of cigarettes or beer, but in the…

Housing Market Frenzy in China C. P. Chandrasekhar and Jayati Ghosh

The urban housing market in China is experiencing a bubble that is driving property prices to unbelievable levels in some of the major cities. But the divergence in recent trends in house prices suggests that this bubble may soon burst. housing_market_china (Download the full text in PDF format) (This article was originally published in the Business Line on October 11, 2016-11-03)

Structural Change Servaas Storm

There has been a renewed interest in industrialization and structural change in the mainstream of development economics, which, however, doesn’t imply a rejection of the neoliberal approach to development; the default recommendation is still the market and static comparative advantage and the main task of governments is to impose institutional reforms and improve governance. structural_change (Download the full text in PDF format) (This article was originally published in Development and Change, by International Institute of social Studies, The Hague)

Another Setback for the Tatas C.P. Chandrasekhar

At the end of March, Indian private sector steel major Tata Steel, flagship firm of the Tata group, announced that it was closing its steel operations in the UK that are reportedly bleeding losses at the rate of one million pounds (approximately Rs. 9.5 crore) a day. Its board meeting in Mumbai, had rejected a plan to turn the UK company around, on the grounds that it was unaffordable and did not make sense, preferring sale of the business. However, with no suitors coming forward to buy out the assets, expectations are that it would soon just close its British…

Tata Tried to Turn the Tables on Britain. It Failed Jayati Ghosh

Thousands of steelworkers’ jobs are threatened as Indian company Tata threatens to walk away from its loss-making business in the UK. The move is causing shockwaves over the health of Britain’s manufacturing industry; but it is also a strong indicator of changing political and economic winds in India. When Tata Steel acquired the steel giant Corus in 2007, it generated some cheers in India, but also raised eyebrows. The cheers were loudest among those who saw this as a macho declaration of Indian corporate arrival on the global scene. The purchase by Tata Steel of a company that was four…

A Different Oil Shock C.P. Chandrasekhar

In a curious shift in perception, low and falling crude oil prices are increasingly being viewed as a disadvantage rather than a benefit to the global economy. The spot price of Brent crude has fallen from just above $100 a barrel at the beginning of September 2014 to around $27 a barrel in mid-January 2016—a close to 75 per cent collapse over a 17-month period. The decline is giving rise to jitters on what it would do to an already sluggish global economy. That marks a shift, since initially the downturn in oil prices, which had been fluctuating in the…