Prabhat Patnaik — The Indian Economic Scheme Inwards A Tailspin

The Indian economic scheme is inwards a tailspin. This cannot last attributed exclusively to innocence inwards economical matters of the command-centre of the NDA government. While that is indubitably a contributing factor, the electrical flow travails of the economic scheme hollo for to something deeper, namely the dead-end to which neo-liberalism has brought the economy. Without moving away from the neo-liberal trajectory, the economic scheme cannot come upwards out of its electrical flow difficulties....

Neoliberal solutions that rely on exclusively a few factors, such the reliance on fundamental depository fiscal establishment involvement charge per unit of measurement setting in addition to cost rationing inwards markets, are insufficient for dealing alongside the complicated issues of a modern society, its politics, in addition to its economy, peculiarly inwards a province every bit large in addition to various every bit India. Influenza A virus subtype H5N1 constellation of issues in addition to causal factors must last identified in addition to address comprehensively, peculiarly growing inequality.

This applies inwards detail to countries that must import vital resources, peculiarly petroleum, hence, are subject on global cost fluctuations over which they convey no control.

A combination of straight import controls on inessential items, reduction of petro-product prices, measures for reducing the consumption of such products, in addition to straight taxation, peculiarly on wealth, is the obvious agency of getting out of the tailspin inwards which the Indian economic scheme is currently caught. But this combination of measures which is desirable, non merely for getting out of the electrical flow travails, but on other, to a greater extent than long-term considerations every bit well, runs reverse to the direction of neo-liberalism. There is withal no choice to them if nosotros are to avoid the fate of countries that eventually run to the International Monetary Fund in addition to teach caught inwards the vice-like traveling pocket of “austerity”....

Although the writer doesn't lift it, this too applies to Republic of Republic of India inwards that USA involvement charge per unit of measurement policy affects everyone, since basis economic scheme uses the USD every bit the dominant global reserve currency. When the Fed increases the policy rate, this constitutes a global cost charge per unit of measurement inwards the cost of credit.

Moreover, USA sanctions, inwards detail sanctions on the export of Iranian oil, too flora an number for Republic of Republic of India inwards that sanctions comport upon the render side of a vital resources that must last imported inwards quantity, alongside Republic of Republic of India using a groovy bargain of Iranian oil owing to the proximity of Iran.

Peoples Democracy
The Indian Economy inwards a Tailspin
Prabhat Patnaik | Indian Marxist economist in addition to political commentator, retired Professor at the Centre for Economic Studies in addition to Planning inwards the School of Social Sciences at Jawaharlal Nehru University, New Delhi, in addition to the vice-chairman of the Planning Board of the Indian province of Kerala from June 2006 to May 2011