ECONOMIC NOTES

The 2018-19 Union Budget

THE union budget for 2018-19 sets a new record for cynical dissimulation. To be sure there is a certain amount of “window dressing” in all budgets, but the announcement of fantabulous schemes with scarcely a paisa earmarked for them, as has happened this year, is quite unprecedented in the annals of budget-making in India.

The Dramatic Rise in Wealth Inequality

OXFAM has just produced a report in which it highlights the dramatic increase in wealth inequality that is occurring in India. The basic data it uses are from Credit Suisse which regularly brings out a Global Wealth Databook; and according to Credit Suisse the top 1 per cent of the population in India cornered 73 per cent of the additional wealth generated in the year 2017.

Arun Jaitley on Electoral Bonds

ARUN Jaitley had outlined a scheme of electoral bonds in his budget speech on February 2, 2017. Now, exactly 11 months later, the notification of the scheme and some details of it have finally been announced in a Press Information Bureau release on January 2, 2018. Along with this release, Jaitley himself has also written an explanation-cum-defence of the scheme, from which it is clear that the scheme, far from countering the threat to democracy arising from large-scale corporate funding of elections, does not even address this issue.

The 99 Per Cent Failure!

IN assessing the impact of the Modi government’s demonetisation measure on the black economy, the fact that nearly 99 per cent of the outlawed currency came back to the RBI has been widely taken to indicate that the measure was a failure – its costs far outweighing any benefits. The obvious reason for this is that the return of almost all the notes establishes the fact that hardly any black wealth was destroyed as its immediate direct outcome.

A Year of Willful Economic Disaster

THE uniqueness of 2017 lies in the fact that never before has the country seen a government-caused economic crisis as serious as was witnessed in this year. There have certainly been worse years for the people, such as 1965-66, 1966-67, and 1973-74, each of which saw massive inflation. But these were years when economic hardships occurred for reasons that had nothing to do proximately with government policy. 1965-66 and 1966-67 when the “Bihar famine” had occurred, had seen a sharp drop in food grains output, a drop that had lasted two years.

India’s Industrial Sector: Myth and Reality

ONE of the elements of the so-called revival in GDP growth in the second quarter of the current year (2017-18) was an apparent rebound of manufacturing sector growth. The year-on-year growth rate of manufacturing, which had dipped to 1.2 per cent in Q1 of 2017-18 jumped to 7.0 per cent in Q2. On the face of it, therefore, the industrial sector is back on track after a brief demonetisation induced slowdown.

Marx on Imperialism

ON February 19, 1881, Karl Marx had written a remarkable letter to NF Danielson, the renowned Narodnik economist who had also gone under the name of Nikolayon and whose work had been much discussed by Lenin. In that letter Marx had said the following:

A Dangerous Move on Banks

THE BJP government, it appears, cannot remain content without inflicting irreparable damage on the institutions of the Indian economy. Its latest move in this direction is the Financial Resolution and Deposit Insurance (FRDI) Bill which was introduced in parliament on the last day of the winter session and is now with a select committee.

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