The Reserve Bank on Demonetisation

THE Reserve Bank of India has just come out with a document titled Macroeconomic Impact of Demonetisation: A Preliminary Assessment, which, while conceding that demonetisation did have an adverse impact on output, suggests that this impact would have got over by mid-February, because of the re-monetisation that has occurred in the interim. As the document puts it, “…the impact of the liquidity shock was assessed to largely dissipate by mid-February…”

Narendra Modi on Poverty

IN his speech to BJP workers in Delhi after the assembly election results had been declared, Narendra Modi announced that his policy henceforth would be to empower the poor by providing them with opportunities, instead of handing out doles to them, which, he believes, is what the various “pro-poor” welfare programmes amount to. Newspapers were quick to underscore, and in general laud, this shift in approach from “welfarism” to “development”. Since government policy is set to reflect this shift from now on, its implications are worth examining.

The Latest GDP Estimates

PERHAPS no other public policy debate in post-independence India has seen as much of an “inversion of reason” on the part of the government as the demonetisation debate. When critics were pointing, on the basis of government statistics themselves, to the palpable failure of the demonetisation measure to achieve its purported objective, which was to cripple the black economy, the government kept harping, in its justification, on the extraordinary“boldness” of the move.

Interest Rates and the Use of Cash

FINANCE capital is always opposed to the use of fiscal measures for stimulating an economy. This is because any such fiscal stimulation undermines the social legitimacy of capitalism, and especially of that segment of it which constitutes the world of finance and which is peopled with “functionless investors” in Keynes’ words or of “coupon clippers” in Lenin’s words, ie, of entities that play no role in the production process. If State intervention comes to be seen as necessary for stimulating the economy, then the question may arise in the public mind: why do we need all these entities?

“Government by Discussion”

Professor Amartya Sen in his new book Collective Choice and Social Welfare which is a considerably expanded and updated version of his 1970 book with the same title, emphasizes that democracy must be understood as “government by discussion”. The idea of democracy being “government by discussion” really belongs to John Stuart Mill, though this particular phrase was coined by Walter Bagehot.

Differing Concepts of Populism

The same term is often employed by different people with different meanings, and this can be a source of immense confusion. The World Bank has done this to good effect in the past, taking over terms that are being used in a particular sense, especially by the Left, and using them in a very different sense, in order to create deliberate confusion and exploit in some way the sympathetic feeling that the term had attracted from people in its initial usage. “Structural adjustment” is a prime example of such appropriation by the World Bank.

The 2017-18 Budget: Aggravating Recession

THE annual budget has an impact on the economy over the year it covers; additionally it is also an indicator of the direction of policy of the government for the future years. Any budget has to be judged on both these counts. And on both counts, the Modi government’s 2017-18 budget is ominous for the people. It will worsen the recessionary crisis unleashed above all by the demonetisation measure; and it also portends an economic strategy that, in the face of the protectionism being introduced by Donald Trump, will further import unemployment into the economy.

Neo-Liberal Capitalism and India’s Nationhood

INDIA’S anti-colonial struggle was not just about getting independence from foreign rule. In fact, this struggle would not even have succeeded if it had been only about that.

The Reserve Bank’s Fall

THE point here is not that the Reserve Bank of India imposed on the working people of this country an utterly witless and utterly oppressive demonetisation; the point is rather that it had very little say in the matter.

The Demonetisation Fiasco

THE demonetisation of 86 percent of the currency of the country, a virtually unprecedented measure anywhere in the world, has brought immense hardship to the working people of the country, and will damage their living standards permanently (since the Modi government plans not to replace the entire value of the demonetised notes by printing new ones). Many however believed that it was a step being taken for the greater social good, for achieving certain important social goals.

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Peoples Democracy

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