Fiscal Policy

Whither Indian Economy?
24 September, 2018, Sunanda Sen
While there are ongoing discussions on rupee depreciation amidst an atmosphere of apprehension about the economy and polity of the country, official sources have continued to deny any possible threat to the economy. The defensive position advanced from the official quarters do not, however, stand scrutiny if one recognises the fact that none of those indicators of a robust economy will be sustainable in the face of slippages running through the economy.
GST: One more NDA failure
24 September, 2018, C.P. Chandrasekhar
From the beginning of its implementation it was clear that under the new tax regime it was unfeasible to have a single tax on all commodities, given the inequality in the country. The multi-tax structure adapted does not simplify the system much, and only promises to do away with the cascading effects of the erstwhile excise duties and sales taxes.
George Soros on The Current Conjuncture
25 June, 2018, Prabhat Patnaik
Factors like the U.S. sucking out finance capital from the rest of the world; the appreciating dollar; the looming crisis for the third world; the refugee problem for Europe are together pushing world capitalism into a serious crisis as put by George Soros. A Marshall plan may save the system but the basic foundations of capitalism are against this proposal.
The Nirav Modi Scandal
23 February, 2018, Prabhat Patnaik
Nirav Modi’s is not a case of crony capitalism supplanting genuine capitalism; it is rather a case of genuine capitalism coming out to display its fundamental unworkability, as a system based on the pursuit of private gain. Having institutional restraints can stem the rot, but not for long.
Window Dressing Budgetary Figures
31 January, 2018, C.P. Chandrasekhar
Budget 2018-19 will feature a window dressed Revised Estimate to ensure that the fiscal deficit is on target. The government’s decision to sell its stake in HPCL to ONGC is only one more step in that direction.
The Crisis in Agriculture
24 October, 2017, C.P. Chandrasekhar & Jayati Ghosh
The dilution of government intervention in the form of minimum support prices, procurement and public distribution is undermining the medium-term viability of agricultural production in India.
Downturn Blues
18 September, 2017, C.P. Chandrasekhar
The most recent deceleration in growth is the result of the inability of the system to sustain the artificial stimuli that the neoliberal policy environment facilitated. It is a problem that does not lend itself to easy resolution.
Economy Plunging Headlong into Recession
16 August, 2017, Prabhat Patnaik
The few days old Volume II of the Economic Survey by Ministry of Finance shows a GVA growth rate much less than that of the previous year, and that too artificially boosted by seasonal variations in non-core sectors. This deceleration is most likely to continue, with growing NPAs and plunging exports, and interest rate cuts will not help in a demand-constrained economy unless the government starts thinking beyond “fiscal rectitude”.
Financing Education
08 August, 2017, Prabhat Patnaik
The central governments’ Draft National Education Policy promotes privatization of education to meet its target, which is not only logically absurd but also legitimizes inequality. Solutions like student loans are impractical with educated unemployment, and fee subsidies turn counterproductive. The one efficient way is to extract the private funds through progressive direct tax, but that seems impossible in this neo-liberal era.
The Roots of the Agrarian Distress In India
29 June, 2017, C.P. Chandrasekhar
The policy shifts of the reform era have not been in favor of agriculture. Trade liberalisation, deregulation and a greater role for market forces have not benefited the farmer, who is trapped in a persisting crisis. It is time for today's policy makers to recognise their own disconnect, and learn from the evidence at hand.
Interest Rates and the Use of Cash
08 March, 2017, Prabhat Patnaik
It is ironic that under the most advanced form of capitalism today demands are being made which would push us back into the age of gold-money from where mankind had begun its journey into the realm of money.
Budget 2017-18: The Macroeconomic Perspective
03 March, 2017, C.P. Chandrasekhar
One reason why the government chose fiscal consolidation instead of an expansionary budget in the wake of demonetisation is its erroneous belief that demonetisation in itself would deliver fiscal benefits.
Before UBI, We must First Get Social Spending Basics Right
13 February, 2017, Anjana Thampi & Ishan Anand
Providing a UBI in place of existing schemes will not change the fundamentally unequal income distribution in the country. The way to resolve the crisis is a redistribution from the rich to the poor.
The Budget after Demonetisation
21 December, 2016, C.P. Chandrasekhar
If the government adheres to its deficit targets, this could imply a substantial cut in capital expenditures or social expenditures or both which would worsen the contraction set off by demonetisation.
Supreme Court should Frame an Eleventh Question on Demonetisation
15 December, 2016, Prasenjit Bose and Zico Dasgupta
Whether the demonetisation scheme declared through the November 8 notification qualifies as a fiscal or economic policy is a vital question that merits the attention of the Supreme Court.
Who's Afraid of the Fiscal Deficit?
19 October, 2016, Jayati Ghosh
The FRBM Act has generated one of the biggest practical problems of increasing the propensity of the government in many countries to evade it by making various off-budget expenditures through SPVs and other such devices.
Federalism and the Goods and Services Tax
16 September, 2016, Prabhat Patnaik
The introduction of the Goods and Services Tax as currently visualized amounts to an interference with the “basic structure” of our Constitution of which federalism constitutes a prominent part.
The Flawed Premises of GST
30 August, 2016, Chirashree Das Gupta
The author in this article takes a second look at the biggest tax reform in a long time and points out where the rationale for the goods and services tax is flawed.
The Global "New Normal" Is Not New- But it is still a real concern
21 June, 2016, C.P. Chandrasekhar & Jayati Ghosh
Global growth rates of the last five years are similar to those in the past, but now they are accompanied by unprecedented monetary expansion that seems to have little impact.
The Debate on GST
19 August, 2015, Prabhat Patnaik
Transition to a GST regime involves various issues; of which reduction in the powers of the states and the regressive nature of its distributive impact deserve greater attention.
Why the Fight for a GST?
06 August, 2015, C.P. Chandrasekhar
The claims of the government that the transition to a GST regime would increase revenues mobilised and raise GDP growth are based on models that are by no means robust.
The Spectre of the Thirties
07 July, 2015, Prabhat Patnaik
The world economy today is reminiscent of the 1930s where competitive easing of monetary policy is not boosting aggregate demand and fiscal policy is barred by finance capital.
Fiscal Consolidation through Austerity
25 May, 2015, C.P. Chandrasekhar
The government's attempt at fiscal consolidation through austerity would not only affect growth adversely, but also has damaging effects on welfare.
Statistical Jugglery, Reverse Redistribution and Corporate Absolutism
13 March, 2015, Amiya Kumar Bagchi
Statistical jugglery practised by the government in order to please big investors and the bid to privatise important public sector units need to be resisted at all costs.
The Myth of Increased Resources for States
12 March, 2015, Sona Mitra
The Government's claim of increased resources to the States is misleading unless the resource pool is substantially increased to cover for cuts in Centrally Sponsored Schemes.
Who's Really Paying for Oil
07 January, 2015, C.P. Chandrasekhar & Jayati Ghosh
As the central government raises excise duties on petroleum products yet again, it is the poor that end up paying the price.
Fiscal Correction versus Democracy in India
12 December, 2014, Jayati Ghosh
The current government’s strategy of imposing sweeping cuts to important areas of public spending without any public scrutiny and discussion is deeply anti-democratic.
The Gathering Clouds of Recession
24 November, 2014, Prabhat Patnaik
The world capitalist economy's slide into a new downturn is likely to be a harbinger of major economic and political changes within the structure of world capitalism.
An Obsession to Sell
30 October, 2014, C.P. Chandrasekhar
The NDA government’s strategy of accelerating the process of privatisation is fiscally irrational and unsustainable that will adversely affect the workers in the public sector.
The Logic of Neoliberal Anti-Populism
27 August, 2014, C.P. Chandrasekhar
Pursuing fiscal consolidation by providing large transfers to the rich while trimming expenditures that benefit the poor is the best example of the ideology of anti-populism.
Incentivising Risk-taking Abroad
28 July, 2014, C.P. Chandrasekhar
Tax concession provided on dividends received by Indian firms from their foreign subsidiaries increases the foreign exchange risk exposure of the country.
The Budget and BJP's Economic Policy
25 July, 2014, C.P. Chandrasekhar
The Union Budget for 2014-15 is a deflationary budget in the name of "fiscal consolidation," and chalks out a strategy to make India a labour-intensive manufacturing hub.
How "Buoyant" are Central Government Taxes?
22 July, 2014, C.P. Chandrasekhar & Jayati Ghosh
The authors here suggest that the fiscal optimism is misplaced while projecting substantial increases in tax revenues despite many tax sops in the Budget for this year.
Corporate Karza Maafi at Rs. 36.5 Trillion
21 July, 2014, P. Sainath
Since 2005-06 a cumulative amount of Rs. 36.5 trillion has been given away to corporate sector in terms of various sops in corporate income tax, excise duty and customs duty.
The Way Forward for the Economy
07 July, 2014, Prabhat Patnaik
The Indian economy cannot be revived by the neo liberal policies of austerity and incentives as only fiscal intervention can break the deadlock of stagflationary tendencies.
The Offensive against Transfers to the Poor
22 May, 2014, Prabhat Patnaik
The demand by corporate magnates to roll back the relief measures for the poor is nothing but an expression of the class animosity of corporate capital towards the working poor.
Is There a Case for Fiscal Stringency in India Now?
11 December, 2013, C.P. Chandrasekhar & Jayati Ghosh
The authors examine the evidence on central government’s receipts and expenditure thus far and consider the validity of the case for fiscal stringency at this point.
Is Fiscal Profligacy the Cause of the Crisis?
10 September, 2013, Prabhat Patnaik
Current account deficit is a major reason behind lack of demand and slowdown. Government spending on food security can boost demand for domestic goods and chance of a revival.
The Cost of Reliance on Gas
28 June, 2013, C.P. Chandrasekhar
The new proposed policy of pricing natural gas is another example of the State acting on behalf of private capital at the expense of social welfare.
The Corruption System
29 May, 2013, C.P. Chandrasekhar
The greater corruption witnessed under liberalisation reflects an aggravation of the systemic tendency towards primitive accumulation of capital characteristic of capitalism.
Economic Crises and Women’s Work: Exploring progressive strategies in a rapidly changing environment
11 March, 2013, Jayati Ghosh
Analysis of women’s employment and decent work in the context of the global economic crisis shows that gender sensitive policy responses are more likely to be successful.
Is this Really a Budget for Women?
06 March, 2013, Jayati Ghosh
Many of the policies implicit or explicit in the Budget statement have implications that are adverse for most women because they involve cuts in essential public spending.
Bad Economics, But Worse Politics
06 March, 2013, C.P. Chandrasekhar
There is nothing in the budget to reverse the stagflation, even as the opportunity to take effective measures aimed at showing concern for the common man has been missed too.
The Neo-liberal Paralysis
06 March, 2013, Subhanil Chowdhury
India's commitment to neo-liberalism and enticement of global finance capital forbid it to undertake any policy aimed at ameliorating the current condition of the economy.
Tax Concessions to Companies
05 March, 2013, C.P. Chandrasekhar & Jayati Ghosh
Revenue foregone due to direct tax concessions to the corporate sector has become a huge element in the Budget, and one that is increasingly coming under public scrutiny.
The Dangers of Fiscal Austerity
04 March, 2013, Jayati Ghosh
Despite fiscal austerity measures proving to be counterproductive in dealing with economic contractions worldwide, the Indian government is poised to implement similar policies.
Niggardly on Essential Spend
01 March, 2013, Jayati Ghosh
Given that the Indian electorate would soon see what the real implications of the budget 2013-14 are, it is surprising that his own party let Chidambaram get away with this.
A Recipe for Continuing Stagflation
01 March, 2013, Jayati Ghosh
Budget 2013-14 will deliver neither higher growth nor improved conditions of life — instead it is likely to worsen the stagflationary tendencies in the economy.
A Plan for Corporate India
09 January, 2013, C.P. Chandrasekhar
Even though talk of planning is a travesty, the Twelfth Five Year Plan document is still a shocker, because of its unashamed advocacy of measures that favour private capital.
Hawking the Deficit
08 January, 2013, C.P. Chandrasekhar & Jayati Ghosh
While the government proclaims the need to reduce fiscal deficit, its actual performance in recent years has been well below projections, especially due to lower receipts.
Polishing the Nation's Silver
03 January, 2013, C.P. Chandrasekhar
Avoiding taxation route and relying more on non-debt capital receipts has led to the failure of the government on the fiscal front in terms of its deficit reduction target.
On Deregulation in the Petroleum Sector in India
17 October, 2012, Surajit Das
The policy of oil price deregulation in the face of rising international price of oil would have direct detrimental effects on growth, inflation and 'macroeconomic stability'.
The Parthasarathi Shome Committee Report
10 September, 2012, Prabhat Patnaik
The Shome Committee Report has recommended that the introduction of GAAR should be kept in abeyance until April 1, 2016 and that the capital gains tax be done away with altogether. These are all a reflection of the Manmohan Singh government’s keenness to legitimise its efforts to start another stock market “bubble”, which it thinks will stimulate growth by attracting more speculative finance capital into the country.
The Allocation of Coal Blocks
03 September, 2012, Prabhat Patnaik
The allocation of captive coal blocks to private parties raises a number of issues, which includes the fact even the auction route does not recoup the entire loss to the exchequer on account of the handing over of exhaustible resources to the private sector. Further, by handing over coal blocks that constitute stocks, the government is not just assuring the private players of flows, it is actually promoting monopoly. This is the larger loss to the nation.
The Blame Game around Oil
13 June, 2012, C.P. Chandrasekhar
It is not that the UPA government is running out of alternatives to tackle the woes caused by the oil and currency shocks. The absence of decisive policies and lack of inner consensus have trapped the government in a debate on who would bear the burden and how the burden should be shared. A combination of subsidies and tax reforms can address the issue. But it calls for easing the grip of neoliberal thinking over the UPA.
Time to End the Madness
16 May, 2012, C.P. Chandrasekhar
Irrational insistence on fiscal conservatism has led to widespread growth slowdown not only in the European countries, but also in emerging economies like China and India. The political backlash in major eurozone economies rekindles hope that governments embracing growth stunting fiscal tightening would soon switch back to sound economic policy-making.
Is a Universal Pension Scheme Feasible in India?
16 May, 2012, Jayati Ghosh
In an economy like ours, a universal pension scheme must be part of a broader development strategy that focuses on public investment in physical and social infrastructure, which will ensure supply of necessary goods and services while increasing demand from the population in a stable and inclusive way.
Growing Differences in State Per Capita Incomes
15 May, 2012, C.P. Chandrasekhar & Jayati Ghosh
The period of economic liberalisation has been marked by growing differences in per capita incomes across states, although the trend has varied across decades. In this article, the authors examine the evidence on per capita Net Domestic Product at the state level since 1980, and consider some possible explanations for the observed trends.
For a Universal Old-age Pension Scheme
10 May, 2012, Prabhat Patnaik
The basic argument behind the demand for a universal, non-means-related, non-contributory pension scheme is derivable from the rights-based approach and stands unimpaired. For raising the resources necessary for such a publicly-funded pension scheme, tax proposals similar to those in international discussions can be worked out for India as well.
In the Middle of a Muddle
21 April, 2012, C.P. Chandrasekhar
While the RBI is being advised to cautiously stimulate demand and growth, at the same time keeping a close watch on inflation, the Finance Ministry is being cajoled into stoking inflation by hiking a range of prices.
Budget 2012: The price of reform
28 March, 2012, C.P. Chandrasekhar
By hiking indirect taxes that would be passed through to buyers, and slashing subsidies that would raise the prices of petroleum products and fertilisers, the Finance Minister has exposed a nation already reeling under the effects of a prolonged price rise to another bout of cost push inflation.
An Inequitable Path: The ritualistic exercise in fiscal management
23 March, 2012, Amiya Kumar Bagchi
Ignoring all the evidences of the fact that growth does not trickle down, the Budget 2012-13 has emphasised the target of raising the rate of growth at any cost without bothering about the majority of Indian population. Instead what was needed for managing the economy was a progressive system of taxation, employment creation and universalisation of the public distribution of food grains.
Employment and Social Spending in Budget 2012-13
21 March, 2012, Jayati Ghosh
Highly regressive in both taxation and spending terms, the Budget 2012-13 has managed the remarkable feat of upsetting almost everyone and making no aam aurat and aam aadmi happy. It provides conclusive proof of the UPA government having lost its way as it seems to have forgotten the importance of its own "flagship schemes".
The Return to Orthodoxy
20 March, 2012, Prabhat Patnaik
The 2012-13 budget represents a return with a vengeance to neo-liberal orthodoxy and a snuffing out of the “Left-inspired” (UPA-I) and the “Keynesian” moments. India will have to bear the impact of the global crisis in an exacerbated manner because of its own “drive to austerity” that is being undertaken at the expense of the people.
The Great Fuel Subsidy Hoax
20 March, 2012, C.P. Chandrasekhar & Jayati Ghosh
In his Budget Speech, the Finance Minister signalled his intent to reduce subsidies, particularly the fuel subsidy, by an estimated Rs 25,000 crore. In this article, the authors consider the retail prices of petrol and diesel in India relative to some other countries, and examine the validity of the claim that the petroleum sector is actually a burden on the exchequer.
Budget 2012-13
17 March, 2012, Jayati Ghosh
Highly regressive in terms of taxation, the Budget 2012-13 will obviously lead to rising prices with continuing shortfalls in employment. Hence it emerges that the greatest losers from this budget will be the Indian consumers, particularly the poorer sections.
Taking American Business Back Home
06 March, 2012, C.P. Chandrasekhar
Evidence suggests that Barack Obama’s ploy to justify tax concessions to corporations in a country where they are effectively undertaxed may help to ensure the return home of American business. v
Prof. Jagdish Bhagwati on the Gujarat Economy
06 February, 2012, Indira Hirway
This article refutes the argument made by Professor Bhagwati that the Gujarat economy is doing very well, not only in terms of economic growth but also in social sectors. The author contends that the growth model in the state seems to have discouraged inclusion of the excluded, both in the growth process as well as in the redistribution process.
''Planning'' for Whom?
12 October, 2011, C.P. Chandrasekhar
There are some fundamental changes in the Planning Commission's current perspective relative to the earlier periods. In the post-Independence years, pursuit of profit was not seen as being in the social interest and this was reflected in the nature of development planning. But now, profit is the sole motive and the role of the state is to merely facilitate this by incentivising corporate activity.
Afterword on a Movement
07 September, 2011, Prabhat Patnaik
Any undermining of parliamentary democracy represents a huge social retrogression. But a positive fall-out from the Hazare movement hopefully is self-rectification by the ''democratic State'' in the face of this challenge. However, the Hazare group's assault on parliamentary institutions and exclusive emphasis on corruption within the state machinery, to the exclusion of the corporate sector and civil society groups, could turn out to be a part of an agenda of converting Indian democracy into a ''corporatocracy''.
Public Spending on Education in India
29 June, 2011, Jayati Ghosh
The failure of the government to provide universal access to quality schooling and to ensure equal access to higher education among all socio-economic groups as well as across gender and region has significant implications for equitable socio-economic advancement. Ensuring a reasonable quality of education to all children will necessarily require a significant expansion of the public resources to be provided.
The Siren Song of Cash Transfers
10 March, 2011, Jayati Ghosh
Cash transfers are the latest fad of the international development industry, as the preferred strategy for poverty reduction. And now Indian policy makers are busy catching up. The idea was mooted in the Government's Economic Survey for 2010-11, and the Finance Minister made an explicit announcement in his Budget Speech for replacing some subsidies on goods with cash transfers.
Budget 2011-12: The wages of cynicism
10 March, 2011, C.P. Chandrasekhar
This budget is afflicted to a far greater degree than before by a kind of cynicism that leads to policy paralysis. It lacks any focus or strategy whatsoever, and sticks to fiscal conservatism. Thus while paying lip service to ''inclusion'', it delivers little of it, since very few of the incremental expenditure allocations are significant when measured as a ratio to GDP.
Budget 2011-12 and Education
09 March, 2011, Jayati Ghosh
The budget allocations for the education sector are not sufficient for fulfilling the commitments made by the Centre in the sector. In particular, it seems that the financial burden of ensuring the right to education is to be thrust on the state governments, which might find it difficult to raise the required resources.
The Budget and the Indian Economy
07 March, 2011, Jayati Ghosh
The Budget certainly benefits the Indian elite class, but the conditions of the majority of people whose lives continue to languish in dreadful conditions are not going to get better. This is because it has not addressed the two major issues that matter for most people, namely food inflation as well as productive and gainful employment.
Budget 2011-12
07 March, 2011, Jayati Ghosh
The Budget is remarkable for its effective rejection of the interests of the common people. Instead of focusing on measures that will increase food supply and food distribution, the government has curtailed allocation for food subsidy. In the case of employment, the presumption seems to be that economic growth on its own will deliver more jobs; but this is not likely.
Fiscal Discipline and All That
27 July, 2010, Jayati Ghosh
There was a sudden resurgence in Keynesian ideas everywhere when the global financial crisis broke in September 2008. But, equally suddenly, financial markets have once again turned back on state intervention and policy makers are giving in to demands for massive cuts in public expenditure that would require enormous sacrifices from their populations.
Fiscal Policy and Global Growth
27 July, 2010, C.P. Chandrasekhar & Jayati Ghosh
Barely three years since the Great Recession first affected the world economy, the focus of global attention has shifted from the crisis and its origins to the legacy left by the stimulus measures adopted by governments in response to it.
The Oil Price Hike
28 June, 2010, Jayati Ghosh
What on earth are they thinking? In the midst of an almost unprecedented and continuous increase in the price of necessities, which is increasingly translating into generalised inflation, the UPA government has chosen to ''free'' the price of petroleum products, to bring them in line with international prices.
The Political Economy of the Enabling State
10 March, 2010, Jayati Ghosh
While this year’s Economic Survey identifies the basic goal of economic policy as inclusive growth, this is to be delivered by a change in focus to an enabling government from an actively interventionist one. This vision excludes the possibility that the process of market-driven economic growth itself generates greater material insecurity and impoverishment for a significant section of the population.
Controlling Food Prices
23 February, 2010, C.P. Chandrasekhar & Jayati Ghosh
As usual when the Union Budget is presented, all eyes will be on the Finance Minister and his speech will be thoroughly scanned for all the implications on the economy. But this time, there is one particular reason why ordinary citizens will be specially focussed on the Budget: the hope that the Government is finally going to act decisively to contain food price inflation.
Who Needs these Taxes?
01 September, 2009, C.P. Chandrasekhar
If increasing its fiscal manoeuvrability and greater transparency and equity were the objectives that the government was pursuing through a tax reform, then a revamp of the existing tax law to get rid of a wide range of unnecessary exemptions would have been adequate. However, the draft direct tax code is a signal that UPA II plans to continue with the policy of cajoling private capital into investing for growth with concessions that have adverse equity and welfare implications.
Alternative Perspectives on Panchayati Raj
08 May, 2009, Prabhat Patnaik
While decentralization of resources and decision-making to Local Self-Governing Institutions run by elected representatives, which is now built into our Constitution, is almost universally supported, there are at least two distinct perspectives underlying this support.
How to Spend the Money
06 March, 2009, Jayati Ghosh
One of the significant impact of the financial crisis on the world of ideas is that it has brought to the forefront the recognition of the role of the government expenditure in mitigating recessions, as was advocated by Keynes and Kalecki. This article makes a theoretical case for undertaking Keynesian measures to cope with the recession.
Blowing Bubbles at the Bust
07 January, 2009, C.P. Chandrasekhar
With the elections behind it, the government has chosen to unveil the promised second instalment of the economic package that it claims will stimulate a slowing economy. Given the global fashion these days, some media observers have wrongly described this as the Centre's second ''fiscal stimulus'' package.
In Search of a Real Stimulus
11 December, 2008, Jayati Ghosh
Now that the economic slowdown is clearly making itself felt in both economic activity and employment, the central government has finally decided to do something about it. The trouble is that the economic package announced on Sunday is simply too feeble to go very far and, even combined with the monetary policy measures announced earlier
Engineering Stagflation
08 July, 2008, C.P. Chandrasekhar
The Indian economy has been at tipping point for some time now, poised to enter a period characterised by slow growth and high inflation. The decision of the government to hike the prices of petrol, diesel and LPG could well be the final push. In the government’s view the hike was inevitable, given the sharp increase in the international prices of crude and India’s dependence on imports to meet much of its consumption.
A Note on Fiscal Devolution and the Centrally Sponsored Schemes
26 May, 2008, Jayati Ghosh
Under the Constitution, State governments have always had very significant responsibilities (for law and order, infrastructure development, health, education, agriculture – to name just a few). However, at the same time they have not had commensurate powers either to raise resources or to influence broader trends that create the context or enabling condi"tions for fulfilling these responsibilities.
The State of Fiscal Devolution
23 April, 2008, C.P. Chandrasekhar & Jayati Ghosh
It is often said that "India lives in its states". This is obviously true, but it is also increasingly becoming a means of passing on governmental responsibility from central to state levels. Under the Constitution,
Boosting a Rising Profit Rate
05 September, 2007, C.P. Chandrasekhar & Jayati Ghosh
Corporate results for recent quarters in India point to a rapid growth in profits. Quarter-on-quarter increases in net profits of more than 20 per cent are the norm in recent times. Interestingly, despite this sharp improvement in profitability, the clamour for a reduction in corporate tax rates has only increased.
Budgetary Policy in the Context of Inflation
30 March, 2007, Prabhat Patnaik
Negating the impact of the current inflationary episode in India on the poor requires both the ensuring of appropriate supplies through imports, and a transfer of purchasing power from the profit earners to the workers. Hence, even if augmentation of supplies through resorting to imports, as the government is doing now in the case of foodgrains, succeeds in ending inflation, there is still the need to put additional purchasing power in the hands of the poor so that they regain their earlier real income. The author argues that the basic problem with the 2007-08 budget is that it is oblivious of these social demands of a situation of profit inflation.
Is the Centre Resource-stretched?
20 December, 2006, C.P. Chandrasekhar & Jayati Ghosh
Speaking on the need for more inclusive growth at the recently held National Development Council meeting to approve the Approach to the XIth Plan, Prime Minister Manmohan Singh reportedly said: ''We cannot escape the fact that the Centre's resources will be stretched in the immediate future and an increasing share of the responsibility will have to be shouldered by the States.''
An Aspect of Neo-liberalism
19 December, 2006, Prabhat Patnaik
The standard argument for the proposition that a capitalist class is at all socially necessary is that this class undertakes productive investment: it thereby causes the development of the productive forces, which is a condition for social progress. The social legitimacy of capitalism thus lies in the fact that capitalists undertake investment.
Resources for Equitable Growth
07 December, 2006, Economic Research Foundation
The declared aims of the Planning Commission's Approach to the XIth Plan, all of which require substantially increased public expenditure in physical infrastructure and social sectors, simply cannot be met within the confines of a restrictive fiscal policy stance. The need to rethink policies of resource generation and financial regulation is therefore urgent. In this context, this paper seeks to examine the effects of the three perceptions underlying the prevailing fiscal conservatism, questions their validity and offers some alternatives for mobilising resources for development.
Government Health Expenditure in India: A Benchmark Study
30 October, 2006, Economic Research Foundation
In spite of large positive externalities associated with health spending, in India it is until now largely privately financed. The relatively low spending by the government, a trend aggravated during the liberalisation era,
Making the Poor Pay for Health
28 September, 2006, Jayati Ghosh
The inadequate level of public health spending, which has been a constant and unfortunate feature of Indian development in the past half century, has deteriorated further. If India is to achieve even a small part of the potential that our leaders are so proud of declaring, government health expenditure to be substantially increased from the current abysmally low levels
Fallacies and Silences in the Approach to the Eleventh Plan
26 July, 2006, C.P. Chandrasekhar & Jayati Ghosh
It has already been pointed out in a previous column that in its Approach to the Eleventh Five-Year Plan, the Planning Commission has adopted an uncritical ''trickle-down'' approach to economic growth, by making the basic objective the achievement of a certain target annual GDP growth figure - either 7.8 or 9 per cent per annum - and effectively assuming that all social goals will be achieved by this.
A Background Note on the Approach Paper to the Eleventh Five Year Plan
15 July, 2006, Prabhat Patnaik
This background note prepared on behalf of the Kerala State Planning Board by Prabhat Patnaik, the Vice-Chairman of the Board, discusses the various reservations of the Board on the Approach Paper to the Eleventh Five Year Plan released by the Planning Commission. The paper also makes a number of initial proposals towards advancing the regional consultations to be carried out by the Planning Commission.
Approaching the Eleventh Plan
11 July, 2006, C.P. Chandrasekhar & Jayati Ghosh
The most remarkable thing about the Planning Commission's Approach to the Eleventh Plan is that there appears to be no planning in it. Planning in the economic sense requires, at the minimum, a constrained maximisation exercise - that is, a clear definition of the social goals, which are then sought to be attained as far as possible subject to the prevailing resource, economic, social and technological constraints.
Repeated Sins of Commission
30 June, 2006, Jayati Ghosh
It is hardly news that state governments in India continue to deny citizens their basic rights of rehabilitation, or that they continue to flout the law even after repeated court strictures in this regard, all in return for dubious promised social benefits. Yet even in this sorry background, the saga of the Maheshwar Dam project in Madhya Pradesh is discouraging.

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