A Government Unequal to the Task Prabhat Patnaik
A striking aspect of the 24 per cent decline in GDP in the first quarter of 2020-21 compared to the previous year’s first quarter is the decline by 10.3 per cent in public administration, defence and other public services. This is a sector where the GDP is estimated not by the “output” of the sector but by the government expenditure incurred under these heads. The decline in the GDP originating in this sector therefore means a decline in public expenditure. This is surprising for two reasons: first, it shows that government expenditure, instead of being “counter-contractionary” has been “pro-contractionary”; second,…
The Indian Economy on the Verge of Collapse Prabhat Patnaik
The GDP growth in the first quarter (April-June) of 2020 over the first quarter of the previous year has been minus 24 per cent according to preliminary official estimates. But most knowledgeable people believe that even this is an underestimate of the actual contraction brought about by the lockdown. In fact, a former chief statistician of India, Pronab Sen, believes that the actual contraction would have been about 32 per cent. Others put the figure even higher. But even at the official figure of minus 24 per cent, India’s first quarter contraction has been greater than that of any other…
GST Compensation: Centre’s Bizarre Stand Prabhat Patnaik
When the Goods and Services Tax was introduced, and the states virtually gave up the power to levy indirect taxes which they had enjoyed under the constitution, the centre had solemnly promised that it would compensate them for a period of five years for any revenue shortfall arising from the shift to GST. The shortfall was to be assessed relative to what revenue should have been, assuming a 14 per cent rate of growth. It is this promise which had persuaded many states to fall in line behind the GST. And parliament had enacted the GST (Compensation to states) Act…
Hindutva Politics and the Indian Economy: An interview with Prabhat Patnaik by Subho Ranjan Dasgupta
Question 1 In one of her recent lecture, eminent Historian Romila Thapar, said that the Indian Republic is teetering on the border line. On one side of the border stands the secular Indian Republic and on the other side the Hindu Rashtra. Do you endorse this point of view ? Yes, I agree that the Republic is teetering on the cusp of a momentous transition; but I see the two sides of this cusp somewhat differently. On one side is a secular, democratic, federal republic where citizens are free of fear and enjoy a set of political rights defended by…
The Protracted Crisis of Capitalism Prabhat Patnaik
There is a commonly-held view that the current crisis in capitalism, which has resulted in a massive output contraction and increase in unemployment, is because of the pandemic; and that once the pandemic gets over, things will go back to “normal”. This view is entirely erroneous for two reasons. The first which has been often discussed in this column, has to do with the fact that even before the pandemic the world economy was slowing down. In fact ever since the financial crisis of 2008 following the collapse of the housing bubble, the real economy of the world had never…
An Elementary Misconception about the Hindu Rashtra Prabhat Patnaik
The BJP as we know is a Hindu-supremacist party. It is the political front of the Rashtriya Swayamsevak Sangh, a fascistic organisation which believes in establishing a Hindu rashtra. Though the BJP itself cannot openly espouse this vision because of its need to remain within the four corners of the constitution, it is trying its best to realise this vision de facto. But what does a Hindu rashtra really mean? The fact that it entails the subversion of secularism and the reduction of the Muslim minority, in particular, to the status of second class citizens, is clear. But many believe…
Lebanese Portents Prabhat Patnaik
The tragic events unfolding in Lebanon are a portent of things to come for the entire third world. Lebanon, a small, highly import-dependent country, has been in the grip of an economic crisis for quite some time as the world recession has become more acute; and with the coronavirus crisis, Lebanon’s economy has been reduced to utterly dire straits. Its two major sources of foreign exchange, tourism and remittances from the Gulf and elsewhere, have virtually dried up owing to the pandemic, causing its currency to depreciate massively, its external debt to be impossible to service, and its ability to…
Detainees during the Pandemic Prabhat Patnaik
It is a common practice all over the world that when those incarcerated face a threat to life, the authorities send them home. Even Benito Mussolini had been forced by an international campaign to shift the Italian Communist Leader Antonio Gramsci, when the latter’s health had deteriorated greatly, first to a clinic in Formia, then to a clinic in Rome, and finally to release him after he had served eleven of his twenty years sentence; it was however already too late by then and Gramsci died within a week of his release. In India when Communists were arrested in large…
New Education Policy: India’s great leap backward Prabhat Patnaik
In a document like the New Education Policy, one must distinguish platitudes from new provisions, including within the latter even the dropping of old platitudes. Thus phrases like “education is a public good”, “6 per cent of GDP should be earmarked for education” are just platitudes, unless some concrete suggestions are advanced to realize to them. In short, repeating old platitudes is inconsequential; it is only not repeating them that has some significance. But such inconsequential repetition of old platitudes in the New Education Policy has impressed many otherwise well-informed observers, and explains the strange phenomenon of their according some…
Income Decline before the Pandemic Prabhat Patnaik
The pandemic and the lockdown are certainly causing an absolute shrinkage in the Gross Domestic Product of the Indian economy. But these tend to obscure something very serious that was happening even earlier, namely a real income decline for vast numbers of working people. There are several pointers to this fact. The rate of chronic unemployment in 2018-19 was the highest ever in the last 45 years at 6 per cent compared to the usual 2 to 3 per cent. The per capita real consumption expenditure in rural India according to the 2017-18 National Sample Survey was 9 per cent…