Ayushman Bharat Prabhat Patnaik

The fraudulence of the claim made by the Modi government with regard to the “Ayushman Bharat” scheme launched recently surpasses all its previous efforts. This is hardly surprising for a government for which what matters is not what it actually does but how it creates perceptions about what it is doing. The Ayushman Bharat scheme consists of two separate parts. One is the creation of 150000 “Health and Wellness Centres” which are simply the old primary health centres given a new fancy name, and for each of which the 2018-19 Union budget allocates a mere Rs.80000. This obviously cannot even…

The Fall Of The Rupee Prabhat Patnaik

The rupee’s current tendency to fall is hardly surprising. India’s growth experience, unlike China’s, was built on the quicksand of a more or less persistent trade and current account deficit on the balance of payments. But there was always enough financial inflow not just to cover the current account deficit but even to add to our foreign exchange reserves. Initially this inflow was stimulated by the sheer fact of the economy’s being opened up to such flows: wealth-holders abroad got a chance to diversify their portfolios by buying into hitherto- unavailable Indian assets. Later, the higher interest rates in India…

GST: One more NDA failure C. P. Chandrasekhar

July 2018 marks the first month of the second year in which the much-heralded Goods and Service Tax (GST) regime has been in place. When launched 13 moths earlier, in a propaganda blitz that (wrongly) claimed that this “one nation, one tax” system was a game-changer, the government had promised that the new regime would help the Centre and the states to efficiently mobilise the resources needed to put India on a high growth trajectory. In fact, demonetisation and the GST regime were presented as the two initiatives of the Modi government that would transform India. Demonetisation, as the government’s…

The Indian Economy in A Tailspin Prabhat Patnaik

The Indian economy is in a tailspin. This cannot be attributed only to innocence in economic matters of the command-centre of the NDA government. While that is indubitably a contributing factor, the current travails of the economy point to something deeper, namely the dead-end to which neo-liberalism has brought the economy. Without moving away from the neo-liberal trajectory, the economy cannot come out of its current difficulties. India’s success in raising the GDP growth rate, the main selling point for the neo-liberal regime, was, unlike China’s, built upon the quicksand of a persistent trade and current account deficit on the…

Whither Indian Economy? Sunanda Sen

Growing concerns on the current state of the Indian economy, which have been met with responses filled with assurances and proposals from official circles for remedial actions on part make it urgent to delve into the issues which spell out the reality. Apprehensions relating to the economy are at the moment centred on further escalations in the high prices, of fuel and other goods in the domestic market, affecting the daily lives of people. As is generally held, the major reasons behind this include the rising dollar price of crude oil in international market and the steady declines in the…

The larger crisis that NPAs signal C. P. Chandrasekhar

Having overcome a legacy of extreme shortage of supply, India’s power sector is in the midst of a crisis with ramifications of a wholly different kind. The crisis arises because firms accounting for significant proportion of power sector assets have defaulted on their debt servicing commitments, and banks are not able to find ways of restructuring that debt or recouping their money. So the RBI’s guidelines requires that the assets should be liquidated to recover whatever is possible and compensate banks from which these firms had taken loans and then defaulted. But the assessment is that liquidation would yield the…

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 –…

Did This Straw Break the Finance Sector’s Back? T. Sabri Oncu

I will define the straw and start with quoting from my July 2017 H T Parekh Finance Column titled “Debts That  Cannot Be Paid Will Not Be” (Öncü 2017). With my June 2015 H T Parekh Finance Column article titled “When Will the Next Financial Crisis Start?” [Öncü 2015a] I initiated an investigation of the possibility of a new phase in the ongoing global financial crisis (GFC) that started in the summer of 2007. [This article was retitled on the Policy Research in Macroeconomics website as “What Straw Will Break the Finance Sector’s Back?” when it was republished three days…

George Soros on the Current Conjuncture Prabhat Patnaik

Billionaire financier George Soros has set financial markets aflutter by suggesting that a new world financial crisis is in the offing. In a speech he gave recently to a think-tank, he underscored the outflow of finance capital from the third world which is likely to catch these economies in a cycle of exchange rate depreciations and austerity. And he talked specifically of the European Union facing an “existential crisis” on account of three factors: its territorial disintegration as exemplified by Brexit, austerity, and the refugee crisis. The solution he offered for Europe was a typically Keynesian one which included a…