By Anirban Kar
Even in this era of finance and globalization rural land ownership still occupies a central position in political economy of India. Peoples’ resistance, be it in Sompeta or in Narayanpatna, has revolved around similar aspirations; that of secured ownership of land. On the other hand, opposition to tenancy reform in Bihar and disbanding of Amir Das commission investigating Laxmanpur Bathe massacre show how desperate big landowners are to hold on to their privileges.
by Ramaa Vasudevan An observer of US politics would be struck by the absurdity of the US Congress scuttling a proposal to let the Bush tax breaks expire for households with incomes over $250,000, as part of the deal for letting unemployment insurance be extended, at a time when most American people are still struggling […]
By Debarshi Das, Sanhati
This is the second and concluding part of the article examining development of agrarian capitalism through the lens of capital accumulation. First part discussed changing pattern of agrarian investment in India from a macroeconomic viewpoint (http://sanhati.com/excerpted/2905/). We found that investment in agriculture has not been significant. This probably has its roots in the plummeting levels of public investment. The effect has been the preponderance of small and marginal plots which can seldom be called capitalist farm. In this second part of the article, survey of some villages in Bihar has been discussed.
By Debarshi Das, Sanhati
Summary: Our study is divided into two parts. In part one we examine evidence from aggregate macroeconomic data. Part two discusses a field survey we undertook in the summer of 2010 in a few villages in Bihar. The choice of villages or respondents was not based on a proper random sampling procedure. However we have tried to take as representative a sample as possible. In the second part we investigate not only whether capital formation has been taking place, we go beyond. Advantages afforded by primary data collection exercise have been exploited: causes of low/high investment have been probed as far as possible, policy implications have been attempted to be formulated.
By Amit Basole, Sanhati
Earlier on Sanhati (paper here), we have published a study that attempts to understand the evolution of relations of production under which the majority of the working people in India labour. Using aggregate level data for agriculture and informal industry, and drawing on several case studies of the unorganized sector, we have highlighted key aspects of Indian capitalism. One of the major lacuna of that study was the absence of reference to micro/village level studies of agrarian change. This article is part of series of short pieces (the first one was on Bihar) that summarize crucial aspects of the dynamics of agrarian change observed at the village level. Here we take a brief look at Haryana and Uttar Pradesh. Subsequent essays in the series will examine state and village-level evidence from Western and Southern India.
By Deepankar Basu, Sanhati
In the backdrop of the growing peoples’ movement in the country against the logic of neoliberal capitalist development, Basole and Basu (2009) [available here] had revisited the “mode of production” debate of the 1970s to understand the evolution of relations of production and modes of surplus extraction in India over the last five decades. Using aggregate level data for agriculture and informal industry, which together employ about 94 percent of Indian’s working population, the paper had highlighted key aspects of contemporary Indian capitalism. The analysis was meant to link up with and inform attempts at radically restructuring Indian society in a socialist direction.
Though Basole and Basu (2009) had used several case studies related to the unorganized/informal industrial sector to complement the story emerging from aggregate level data, the paper had failed to do a similar analysis of the agrarian sector. The major lacuna of the paper, therefore, was its failure to draw on micro/village level studies of agrarian change to supplement aggregate level trends derived from sample survey and census data. In this article, we take the first step towards addressing that shortcoming by summarizing crucial aspects of the dynamics of agrarian change in rural Bihar over the last few decades based on three village-level studies.
A Sanhati Intervention
Based on the recommendations of the Kirit Parikh Committee, the Government of India (GOI) on 25 June, 2010 announced the full deregulation of the prices of two crucial petroleum products: petrol and diesel. Henceforth, prices of these two products will be determined by the unfettered play of market forces and government “subsidies” on these products, which worsen the fiscal situation, will be completely removed. In one deft move, therefore, government control over the determination of the prices of these key commodities was willingly ceded to the magic of the market, presumably to “rationalize” prices and to wipe away losses of state-run Oil Market Companies (OMCs) to the tune of Rs. 22,000 crore.
By Ramaa Vasudevan, Sanhati
The threat of a full-fledged trade war between US and China no longer seems so imminent. The battle over the China’s exchange appears to have been averted. The biannual report on exchange rate which was to be released on April 15th has been strategically postponed once Hu Jintao, the Chinese President, announced his particpation at the April nuclear summit. There has been a mounting pressure to name China as a currency manipulator in this report, and unleash a battery of trade sanctions. The US has stopped ratcheting up the pressure and China has sent out cautious signals that suggested that the peg was just a temporary special measure and it was considering letting the remnibi float up. Ruffled feathers seem to have been smoothed and the strategic summit currently underway, is not raising any diplomatic dust. The euro woes might postpone the loosening of the remnibi peg, but for the time being a truce has been declared.
So what was the storm all about?
By Deepankar Basu, Sanhati
The Eurozone seems to have temporarily averted a serious sovereign debt crisis in its periphery. This sovereign debt crisis had the potential to quickly spread from Greece to Portugal, Spain and possibly even wider afield while morphing into a full-blown banking and financial crisis – with a nearly 750 billion euro bail-out plan . The plan requires European governments to commit about 500 billion euros for emergency loans through a special purpose vehicle (SPV), the IMF to promise another 250 billion euros if the need arises, countries receiving emergency loans to agree to harsh “austerity measures” and the European Central Bank to agree to purchase bonds of member countries. With the real fear of contagion spreading across the Atlantic, the US Federal Reserve has reopened swap lines to provide dollar funding to European banks, again, if needed.
Do 600 Million Cellphone Accounts Make India a Rich Country? A Lesson in Economics for Mr. Chidambaram
A note prepared by Sanhati members
A sizeable section of the poor, predominantly the urban section, does own mobile phones. A mobile phone has become a necessity for the poor because of their very vulnerability and the precariousness of their employment in an unorganized and informal labour market. The very recent surge in poor people acquiring mobile phones has been facilitated by the dramatic reduction in the prices of such services and even a minor increase in prices may drive a lot of such users to give up using them.
As asides, we mention that bizarre anomalies arise if one uses mobile phones as markers of affluence – for example, one concludes that there is no poverty in Delhi. And finally: land-lines are probably a more plausible indicator of the middle class.
By Shiv Sethi, Sanhati
The recent crisis in Greece is the new addition to the long list of casualties of the global financial and economic crisis that started in 2007. It has called into question financial institutions as diverse as the public accounting system to the common currency policy of the Euro zone.
In October 2009, the newly-elected government of Greece revealed that the country’s budget deficit was far higher than previously thought: more than 12% as opposed to less than 3%, as required for membership in the EU. Ever since, the deficit has been revised upwards and currently hovers around 13.6%. In addition, the sovereign debt of Greece is nearly 400 billion dollars, close to 120% of its GDP and it runs a current account deficit of nearly 14% in the Euro zone. These data together strongly imply that Greece has invested more than it saved (i.e.,private and public sector savings taken together), supporting this extra investment by borrowing from the rest of the world. In short, Greece appears to have lived beyond its means.
Merely the other face of Congress?: Probing the real motive behind the Left Front’s land reforms in West Bengal
By Krishanu Mandal. April 16 2010 I Introduction It is well known that the non-left electoral political parties – Congress, BJP, Trinamool, etc. – represent the different faces and facets of the Indian ruling class: the coalition of dominant powers in non-urban areas maintaining a stranglehold on inputs for production (including, but not exclusively, land) […]
By Debarshi Das, Sanhati
Elaborating on how in a democratic republic capital exercises its power by means of corruption and by an alliance of the government and the stock exchange, Lenin writes “[a] democratic republic is the best possible political shell for capitalism, and, therefore, once capital has gained possession of this very best shell … it establishes its power so securely, so firmly, that no change of persons, institutions or parties in the bourgeois-democratic republic can shake it.” (The State and Revolution, 1917)
Amazing continuity of neo-liberal policy for the last two decades is a testimony that capitalism is getting ever more entrenched in India. Phases of NDA, UF, UPA + Left, UPA sans the Left notwithstanding, each budget has become a familiar exercise for redistributing wealth of the nation to the already-wealthy, thus securing domination of the powerful over the powerless. Strange too is the reiteration of phrases such as inclusive growth. One finds it right at the top of the budget documents: as one of the three priorities of the government. The substance of the budget, of course, flies in the face of this putative priority. Let us see how.
What is Neo-liberalism, Practically? – A Picture of Finance Capital, or The Income Pyramid Under Capitalism
By Deepankar Basu, Sanhati
The ideology of neoliberalism: trickle down theory of growth and distribution. The reality a tad different: the gushing up of income and wealth. But, in a manner of speaking, we always knew that this is what neoliberalism was all about; we knew, in other words, that the neoliberal turn of the late 1970s was meant to facilitate the flow of income, wealth and power up the societal pyramid, that it was meant to restore the economic and political clout that “finance capital” had lost during the post World War II period. We knew that it was meant to efficiently pump the economic surplus out of the working people and channel it up the income ladder to the top fraction of the capitalist class. That neoliberalism performed this role even more effectively than expected by its hardest-core champions emerges clearly from recent studies of income and wealth trends of the past few decades.
By Deepankar Basu, Sanhati. (Department of Economics, University of Massachusetts, Amherst)
In a previous paper [Basole and Basu (2009)] an attempt to begin an analysis of social classes in contemporary India organized around the idea of economic surplus was initiated, by revisiting the 1970s mode of production debate. The focus in Basole and Basu (2009) was on the rural classes and the unorganized industrial and service sector workers. In this paper, I extend that analysis by shifting attention to the classes that had been left out in Baole and Basu (2009): the industrial bourgeoisie and what might be called the middle class.
By Deepankar Basu, Sanhati
What is of course interesting is that the school of macroeconomics popularised by Professor Mulligan’s distinguished colleagues at the University of Chicago and elsewhere known as the Real Business Cycle (RBC) view of macroeconomics does not even recognize the existence of unemployment. In case you have missed that, let me state it again: for the RBC view of macroeconomics, unemployment, as we understand that term, is a fiction; it does not exist. So, how does this strand of macroeconomics view the fluctuations of employment that goes with the typical business cycle? Here is the story they tell.
Failure of economics to failure of capitalism? : A summary and new perspectives on the Great Recession
By Deepankar Basu, Sanhati.
On a visit to the London School of Economics last year, the Queen of England, expressed surprise at the apparent failure of the economics profession to predict the financial crisis and the Great Recession that came in its wake. “Why did no one see this coming?” asked the Queen to Luis Garicano, a professor of economics at LSE. Garicano’s colleague and economist Tim Besley and eminent historian of government Paul Hennessy stepped up to the task and attempted to answer the Queen in a short letter [PDF] written to her on behalf of the British Academy. In the letter they concluded that “the failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole.”
By Ramaa Vasudevan. Guest columnist, Sanhati
The present regime is caught between exigencies of continuing to roll forth the neo-liberal juggernaut that has allowed the corporate elite to reap a bonanza of profits and the recognition that the pernicious impact of these policies is fomenting deep distress and discontent amongst the working poor. The union budget is in a sense a signal of policy direction and provides some critical insights into the political economy of the Indian state. The crucial question is whether the budget reflects any shift in the neo-liberal tide with a genuine attempt to address the inequities of the recent economic growth process.
By Sushovan Dhar. July 14, 2009.
The first-ever summit of the BRIC countries (Brazil, Russia, India, China) took place at Yekaterinburg at Russia on 16th June 2009 calling for a more diversified international monetary system (BRIC refers to the fast growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001.Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world). The core focus of the meeting, attended by President Dmitri Medvedev of Russia, the Indian Prime Minister Manmohan Singh, Chinese president Hu Jintao and Brazilian President Luis Inacio Lula da Silva was to improve the current global financial situation, to discuss how the four countries could collectively work better in the future and to reform the financial institutions. At the end of the summit, the BRIC nations suggested the need for a new global reserve currency that is ‘diversified, stable and predictable’.
By Amit Basole and Dipankar Basu, Sanhati
Assessing the nature and direction of economic development in India is an important theoretical and practical task with profound political and social implications. After all, any serious attempt at a radical restructuring of Indian society, if it is not to fall prey to empty utopianism, will need to base its long-term strategy on the historical trends in the evolution of the material conditions of life of the vast majority of the population. Attempting to contribute to past debates and as part of on-going attempts at radical transformation of Indian society, this paper tries to provide a summary account of the evolution of some key structural features of the Indian economy over the last few decades.
By Amit Basole and Dipankar Basu, Sanhati. May 11 2009.
Abstract: This paper uses aggregate-level data as well as case-studies to trace the evolution of some key structural features of the Indian economy, relating both to the agricultural and the informal industrial sector. These aggregate trends are used to infer: (a) the dominant relations of production under which the vast majority of the Indian working people labour, and (b) the predominant ways in which the surplus labour of the direct producers is appropriated by the dominant classes. This summary account is meant to inform and link up with on-going attempts at radically restructuring Indian society.
By Debarshi Das, Sanhati
What we mostly find in India is not open unemployment but underemployment. This is principally because going without jobs is a luxury in a country having non-existent unemployment benefits. Employed kith and kin cannot be of much help either if one is jobless because the wage levels are barely enough to sustain one. However a person doing a job which neither she nor others consider gainful employment should not be counted as employed . Her right to labour and dignity is yet to be realised. As pressure of global capital tightens and the organised sector shrinks, workers are made to take up more and more of such unpaying and hazardous jobs, whose remuneration stagnates as the rest of the economy surges past. All this is perhaps not much surprising. What is amusing is the eagerness with which dominant economic tradition of the day ties itself in knots.
By Dipankar Basu, Sanhati. This series will also appear parallely on Radicalnotes
The global economic crisis currently underway is, by all accounts, the deepest economic crisis of world capitalism since the Great Depression. It is necessary for the international working class to understand various aspects of this crisis: how it developed, who were the players involved, what were the instruments used during the build-up and what are it’s consequences for the working people of the world. This understanding is necessary to formulate a socialist, i.e., working class, response to these earth shaking events. In a series of posts here on Radical Notes, I will share my understanding of the on-going crisis as part of the larger collective attempt to come to grips with the current conjuncture from a socialist perspective, to understand both the problems and the possibilities that it opens up.
Dipankar Basu and Debarshi Das, Sanhati. Open for comments.
Sifting through the divergent viewpoints thrown up by attempts to make sense of the recent political history of West Bengal, one is led to the conclusion that the tumultuous events have taken many, if not most, by surprise. With the benefit of hindsight one can probably say this: a combination of an insensitive state power, an arrogant ruling party, lapping-it-up corporate interests, and cheerleaders-of-corporate-sector-doubling-up-as-media orchestrated a veritable assault – a perfect storm. Yet the peasantry, initially without the guiding hand of a political party – indeed at times against the writ of the party – fought on. Through this episode Indian political economy seems to have stumbled upon the peasantry while it was looking for a short-cut to economic growth through SEZs.
Farewell to the Tatas: Costs and benefits of the Tata-Singur Project, a detailed dissection of the deal
By Dipankar Basu, Sanhati. Open for comments
Costs: the total cost of the Tata-Singur project incurred by the exchequer, and hence ultimately the tax payers, will be approximately be Rs. 3000 crores on a net present value basis when we add up the costs pertaining to the land subsidy, the tax holidays, the soft loan, the real estate gift and the subsidized electricity using an interest rate of 11%. This is about 58% of the total realized industrial investment in the state of West Bengal in 2007.
By Alita Nandi, Sanhati. Open for comments.
In the early 1990s various liberalisation policies had been introduced in India and India had started to experience higher growth rates (compared to pre-liberalisation period). The official poverty estimates published by the Planning Commission showed a decline in absolute poverty levels from 36% in 1993-94 to 26% in 1999-00. The question that became important at this juncture was, “Did the advantages of this high economic growth reach all echelons of society, in particular the ‘poor’?” And so the official reports at this time showing a reduction in absolute poverty levels created a stir. Some old issues about poverty measurement and some new ones were brought into the foreground and heavily debated and discussed. Here I attempt to trace out the key issues of this debate.
By Partho Sarathi Ray, Sanhati. Comments enabled
Where is the “Great Indian Middle Class”? Where are those conspicuously-consuming, frequently-flying, gizmo-toting, big car-driving, globalized offsprings of our jet-setting “new economy”? Don’t we see them all around us: living in highrises with blue-tiled swimming pools, with people living a few miles away getting water once in three days, shopping in glittering malls built on the land of evicted slums, driving around in Toyotas and Chevrolets on roads choked with traffic? From all accounts, and appearances, we have reached the heady days when the Indian middle class has finally arrived. They are the ones who supposedly constitute one of the biggest markets in the world, for whom multinational corporations are falling over one another to invest in India, for whom our governments’ policies are directed, for whom roads and airports are built, for they ARE the “people” of India. This great middle class is our hope, the engine of growth for our economy. So – where is it?
By Dipankar Basu, Sanhati
The debate over economic “reforms” in India has been going on for quite a long time now. This long and heated debate has been centered around the effects of what has been called “economic reforms”, a sharp change in the policy regime governing the Indian economy. It might be useful to recall that the policy regime in India gradually started changing right after Rajiv Gandhi came to power towards the end of 1984; of course the change was considerably accelerated after Manmohan Singh, the current prime minister, became the finance minister in the Congress government in 1991. Since then there has been no looking back; whether it is a coalition government led by the centrist Congress or led by the right-wing Bharatiya Janata Party (BJP), economic reforms have continued apace. In fact, consensus about the necessity and desirability of reforms is evident across the whole political spectrum, ranging from the right-wing BJP to the social democratic communist parties, CPI and CPI(M).
By Partho Sarathi Ray
I started following this interesting discussion rather late but would like to make a few layman’s observations. A crucial point which seems to have not been considered in detail in this discussion on the “neo-liberal” economic reforms in India is globalization. What Dipankar has stated about Adam Smith’s observation that “division of labour” being the cause of prosperity of an economic system (by “economic system” I refer to anything from an enterprise to a society or a national economy, better word), is true, because in division of labour lies the efficiency of extracting profit, and for generating the so-called virtuous spiral. Although Adam Smith describes this division of labour as “parts of a complex production process can be separated into different points of production, which may be located in different firms, or even different geographic regions”, he considers this division to still work in a sort of unified economic system, as in a corporation or a national economy.