SALWA Judum Continues as Ruling RSS ZIONIST MARXIST UPA Hegemony Pumps Blood into Warmonger Money Machine! Devaluation of Money with Problem of Rupee Intensifying because of Supplyline for the Majority Undermined and Market Aborts Basic Commodity Line Up to Create Demand and Profit in LPG, FII, FDI, SEZ, Retail Realty Raj as Land, Property, Habitate,Resource, Livelihood, Life and Nature ENDANGERED!
Economic reforms, capital inflows and macro economic impact in India
Author info | Abstract | Publisher info | Download info | Related research | Statistics| Author Info |
| Abstract |
The study attempts to explain the effects of inflows of private foreign capital on some major macroeconomic variables in India using quarterly data for the period 1993-99.The analyses of trends in private foreign capital inflows and some other variables indicate instability. Whereas net inflows of private foreign capital (FINV),foreign currency assets,wholesale price index,money supply,real and nominal effective exchange rates and exports follow an I(1)process,current account deficit is the only series that follows I(0).Cointegration test confirms the presence of long-run equilibrium relationships between a few pairs of such cointegration except in two cases:cointegration exists between foreign currency assets and money supply and between nominal effective exchange rate and exports,even after controlling for FINV. The Granger Causality Test shows unidirectional causality from FINV to nominal effective exchange rates-both trade-based and export-based-, which raises concern about the RBI strategy in the foreign exchange market. Finally, instability in the trend of foreign currency assets could be partially explained by the instability in FINV with some lagged effect.
| Download Info |
If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cds.edu/download_files/wp311.pdfFile Format: application/pdf
File Function:
Download Restriction: no
| Publisher Info |
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 47 pages
Date of creation: Jan 2001
Date of revision:
Handle: RePEc:ind:cdswpp:311
Contact details of provider:
Postal: Prasanth Nagar, Trivandrum 695 011, Kerala
Phone: +91 471 448 884
Fax: +91 471 447 137
Email: cdsedp@vsnl.com
Web page: http://www.cds.edu
More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: pujar@igidr.ac.in (Shamprasad M. Pujar).
| Related research |
Find related papers by JEL classification:
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
References listed on IDEAS
Please report citation or reference errors to Jose.Barrueco@uv.es, or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March. [Downloadable!] (restricted)
- Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May. [Downloadable!] (restricted)
- Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July. [Downloadable!] (restricted)
- Reinhart, Carmen & Khan, Mohsin, 1995. "Macroeconomic Management in APEC Economies: The Response to Capital Inflows," MPRA Paper 8148, University Library of Munich, Germany. [Downloadable!]
- Abul M. M. Masih & Rumi Masih, 1994. "Temporal Causality Between Money and Prices in LDCs and the Error-Correction Approach: New Evidence from India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 29(1), pages 33-35, January.
- Corbo, Vittorio & Hernandez, Leonardo, 1996. "Macroeconomic Adjustment to Capital Inflows: Lessons from Recent Latin American and East Asian Experience," World Bank Research Observer, Oxford University Press, vol. 11(1), pages 61-85, February.
- Ghosh, Atish R, 1995. "International Capital Mobility amongst the Major Industrialised Countries: Too Little or Too Much?," Economic Journal, Royal Economic Society, vol. 105(428), pages 107-28, January. [Downloadable!] (restricted)
| Statistics |
Did you know? You can use convenient plug-ins to search directly IDEAS from your browser.
This page was last updated on 2010-3-17.
This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.
Salwa Judum - Wikipedia, the free encyclopedia
| Salwa Judum (meaning "Peace March" in Gondi language) is an anti-Naxalite movement in Chhattisgarh, India, which started in 2005 as a people's resistance ... http://en.wikipedia.org/wiki/Salwa_Judum - 65k - Cached - Similar pages |
Salwa Judum: When state makes war on its own people
| A report onn violations of people's rights during the Salwa Judum campaign in Dantewada, Chhitsgarh, April 2006 Since June 2005, Dantewada District ... http://www.pucl.org/Topics/Human-rights/2006/slawajudum.htm - 11k - Cached - Similar pages |
Salwa Judum - menace or messiah? - The Times of India
| 20 Mar 2010 ... In 2005, when Chhattisgarh decided to arm the tribal population against Maoists, the Salwa Judum - 'peace march' in Gondi dialect - was born ... http://timesofindia.indiatimes.com/india/Salwa-Judum--menace-or-messiah/articleshow/5704885.cms - 54k - Cached - Similar pages |
 | Dantewada diary: Notes from Ground Zero - 1 day ago These settlements, officially designated 'internally-displaced persons' (IDP) camps, are more commonly known as Salwa Judum camps. ... Times of India - 781 related articles | |
| 14 May 2009 ... Salwa Judum (literally "purification hunt") is a state sponsored counterinsurgency campaign started in Dantewada district of the Indian ... http://www.otherindia.org/dev/index.php%3Foption%3Dcom_content%26view%3Darticle%26id%3D25%26Itemid%3D87 - 27k - Cached - Similar pages |
What is Salwa Judum? « Campaign for Peace and Justice in Chhattisgarh
| However the fact is that the Salwa Judum is being actively supported by the Chhattisgarh Government. Far from being a peaceful campaign, Salwa Judum ... http://cpjc.wordpress.com/what-is-salwa-judum/ - 36k - Cached - Similar pages |
Fact finding reports on Salwa Judum « Campaign for Peace and ...
A lesser known truth is that, as a consequence of the Salwa Judum, the lives of
thousands of people in the region are being torn apart in the course of what ...
http://cpjc.wordpress.com/reports-by-fact-finding-teams-on-salwa-judum/ - 46k - Cached - Similar pages
Maoist movement in India and "Salwa Judum," - State sponsored ...
| 19 Jul 2006 ... According with the government of Chhattisgarh, Salwa Judum began as a legitimate people's movement, uprising on the part of the villagers ... http://www.asiantribune.com/node/1141 - 29k - Cached - Similar pages |
Salwa Judum: Strategy that backfired
| 19 Jun 2008 ... What kind of strategy is it where you create 50000. http://www.rediff.com/news/2008/jun/19guest.htm - 37k - Cached - Similar pages |
www.outlookindia.com | Disband Salwa Judum
| At the very outset, we wish to register our outright condemnation of any kind of violence, whether it is committed by the Maoists, Salwa Judum or by ... http://www.outlookindia.com/article.aspx%3F231861 - 85k - Cached - Similar pages |
| Aruna Roy, a political and social activist, gave up her career in the Indian Administrative Service in 1975 to devote her time to social work and social ... http://www.binayaksen.net/topic/salwa-judum/ - 57k - Cached - Similar pages |
| A Few Myths and Facts About Salwa Judum ... A short documentary about: 1. Forcefully displaced indigenous tribal people in Chhattisgarh, India, 2. Corporate invasion of tribal lands, 3. Salwa Judum ... 20 min - http://video.google.com/videoplay%3Fdocid%3D-3961678725848974726 |
 | Public Rally against Salwa Judum in Dantewada On 14th November 2006, a huge rally was taken out in Dantewada to protest against Salwa Judum and illegal land acquisition by private firms like Tata ... 9 min -  http://www.youtube.com/watch%3Fv%3DiVyYg5xFtBI |
-
Dantewada diary: Notes from Ground Zero
Times of India - 1 day ago
These settlements, officially designated 'internally-displaced persons' (IDP) camps, are more commonly known as Salwa Judum camps. ...
Asian News International (ANI)
Indian villagers in crossfire of Maoist conflict - BBC News
Road to heaven, but less travelled - Daily News & Analysis
Nepali Times - Bangalore Mirror
all 781 news articles » -
Need for nuanced approach among parties over tackling Naxals
Hindustan Times - 4 minutes ago
Chhattisgarh, which had been part of undivided Madhya Pradesh till a decade ago, is itself divided on the issue of Salwa Judum, a form of civilian ... -
In hotbed of violence, this village is happy staying aloof
Times of India - Ranjit Deshmukh - 3 days ago
The villagers say their problems aggravated after the government-sponsored Salwa Judum movement (armed civil resistance against Maoists) began. ... -
Ground zero beneath their feet
Times of India - Freny Maneksha - 4 days ago
One of the counter-Maoist strategies here has been the Salwa Judum ('peace march'). The state maintains that it's a peaceful people's movement that sprang ... Asian News International (ANI)
Chinks in Chhattisgarh's armour bared - Daily News & Analysis
Activists blame govt operations - Indian Express
Wall Street Journal (blog) - The Hindu
all 2474 news articles » -
Salwa Judum - menace or messiah?
Times of India - 19 Mar 2010
In 2005, when Chhattisgarh decided to arm the tribal population against Maoists, the Salwa Judum — 'peace march' in Gondi dialect — was born, ... -
Villagers torn between Naxals, cops
Times of India - Keshav Pradhan - 2 days ago
"Look, what the Salwa Judum boys have done to my home," says Padamdeva Moriya, a sarpanch, pointing to his charred house. "They called me a Maoist simply ... -
What Chhattisgarh can learn from Andhra Pradesh
Daily News & Analysis - 14 hours ago
There is another class of Koyas, who are now part of the Salwa Judum movement. This class is just 20 per cent of the total tribal population in the state, ... -
Long march to hope
Times of India - 19 Mar 2010
Among the major players in this human saga is the Salwa Judum, the precursor to ... Not that men in the Salwa Judum and their families haven't faced ... -
PC accepts the buck, PM ducks
Calcutta Telegraph - Sujan Dutta - 1 day ago
That day, the Cobras with the 62nd CRPF, special police officers (from Salwa Judum) and Chhattisgarh police entered the jungles between Chinta Gufa and ... -
Young tribal villagers are being recruited by both maoists and police
Daily News & Analysis - Jaideep Hardikar - 27 Mar 2010
Bajaar, who is only a little older than Bhunesh, says the youth in Salwa Judum camps have no regrets about helping the police, because otherwise they would ...
| 1 | 2 | 3 | 4 | 5 | Next |
"It is a horrific tragedy that hit the CRPF. Seventy-four of the 76 personnel killed were from CRPF. The CRPF is under my charge and the tragedy happened under my watch. So I said the buck stops at my desk," he said.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| |||||||
In an embarrassing turn of events for the government on the Civil Nuclear Liability Bill, it has now emerged that there is no extraneous legal compulsion to cap the overall liability amount at 300 million special drawing rights (SDRs)!
SALWA Judum Continues as Ruling RSS ZIONIST MARXIST UPA Hegemony Pumps Blood into Warmonger Money Machine! Devaluation of Money with Problem of Rupee Intensifying because of Supplyline for the Majority Undermined and Market Aborts Basic Commodity Line Up to Create Demand and Profit in LPG, FII, FDI, SEZ, Retail Realty Raj as Land,Hebiyaye, Property, Resource, Livelihood, Life and Nature ENDANGERED!Home Minister P Chidambaram on Saturday said he had decided to quit after the Dantewada massacre because the Central Reserve Police Force that lost 75 men came under his charge. But he added that the resignation was a closed chapter. The Planning Commission is expected to submit its estimate on the number of below the poverty line (BPL) families within 10 days to the government, which will help it finetune the food security bill. "We will have it within 10 days," Planning Commission deputy chairman Montek Singh Ahluwalia told PTI.Paucity of funds and delayed payments have forced the Micro and Small Enterprises (MSEs) sector to perform below capacity, a study conducted by the industry lobby Assocham said Sunday.Despite government initiatives like debt waiver and higher minimum support prices for their produce, farmers in India struggle to earn a decent living. They do not get a fair deal because of uncertain markets, poor productivity and inability to add crop value.
The tussle between market regulator Securities and Exchange Board of India (Sebi) and the Insurance Regulatory and Development authority of India (IRDA) over regulating unit linked insurance products (ULIPs) has intensified with the Sebi banning 14 insurance companies from launching and advertising ULIPs and IRDA saying it will address the issue "expeditiously in the appropriate forum in acco.The share index on Wednesday climbed above 18,000 points for the first time in more than two years, driven by robust earnings expectations and firm global equities.
-
Economic Capital
www.riskbooks.com Economic capital models, Basel & Solvency 2 explained. Order online!
Search Results
- [PDF]
Foreign Capital Inflow into India: Determinants and Management
File Format: PDF/Adobe Acrobat - Quick View
Foreign Capital Inflow into India: Determinants and Management. Soumyen Sikdar. 2006. Soumyen Sikdar is Professor, Department of Economics, Calcutta ...
www.adb.org/Documents/Papers/INRM-PolicyBriefs/inrm4.pdf - Similar - [PDF]
Macroeconomic Implications Of Capital Inflows In India
File Format: PDF/Adobe Acrobat - Quick View
Tariq Masood, Research Scholor Dept. of Economics AMU, Aligarh, India ... The analyses of trends in private foreign capital inflows and some other ...
www.wbiconpro.com/16.Izhar.pdf - Similar -
Economic reforms, capital inflows and macro economic impact in India
by I Chakraborty - 2001 - Cited by 4 - Related articles
The analyses of trends in private foreign capital inflows and some other ... New Evidence from India," Indian Economic Review, Department of Economics, ...
ideas.repec.org/p/ind/cdswpp/311.html - Cached - Similar -
Business Portal of India : Current State of the Indian Economy ...
Current State of the Indian Economy: Capital Inflows, Previous Page ... The foreign direct investment (FDI) stood at US $ 27426 million, while the portfolio ...
business.gov.in › ... › Current State of the Indian Economy - Cached - Similar -
Foreign Capital Inflows to China, India and the Caribbean: Trends ...
Arindam Banik has contributed to Foreign Capital Inflows to China, India and the Caribbean: ... He teaches International Finance, Development Economics and ...
www.infibeam.com/.../Foreign-Capital-Inflows...India.../140390040X.html - Cached - [PDF]
Foreign Capital Flows in India: Compositions, Regulations, Issues ...
File Format: PDF/Adobe Acrobat - Quick View
Marjit, S., U. Broll and S. Mitra (1997) 'Targeting Sectors for Foreign Capital Inflow in a Small. Developing Economy', Review of International Economics, ...
wwwarc.murdoch.edu.au/wp/wp155.pdf - Similar -
'Large capital inflows may impact India's growth' - The Hindustan ...
"The Indian economy is witnessing a robust growth for four years in a row. ... Noting that the return of foreign capital inflows would likely help the two ...
www.encyclopedia.com/doc/1P3-1394591021.html - Cached -
Flipkart.com: Foreign Capital Inflows to China, India and the ...
Focussing on China, India and the Caribbean, it analyzes foreign capital inflows from the perspective of both the source and destination countries. ...
www.flipkart.com/foreign-capital-inflows...india/140390040x-xnx3fruvlc - Cached - Similar -
abstract on foreign capital inflow into india - PDFQueen - PDF ...
Regional FDI inflows into India have also been ... http://www.uq.edu.au/economics/eaerg/dp/0405.pdf. pdf. FOREIGN CAPITAL INFLOW, NON-TRADED INTERMEDIARY, ...
www.pdfqueen.com/.../abstract-on-foreign-capital-inflow-into-india/ - Cached -
Legal Regime Of Foreign Capital Inflow In A Deregulated Economy ...
The Indian Penal Code, 1860. Loading... Central India Law Quarterly. LEGAL REGIME OF FOREIGN CAPITAL INFLOW IN A DEREGULATED ECONOMY THE NIGERIAN EXPERIENCE ...
www.indiankanoon.org/cached/1408459/ - Cached
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Next |
The BJP and Left on Saturday asked the UPA government to come clear on the need for the nuclear liabilities bill if the private sector was barred from nuclear power generation. The Economic Environment and health of US war Economy seem to be very POOR and suffers from south Asian Heatwaves as US stocks declined Wednesday after a private survey suggested that March was a worse than expected month for the struggling US labour market.
Marketmen said firm global cues and higher capital inflows from overseas investors on the back of a strong rupee will keep the market move up, however, there could be some volatility in the market as investors may book profit at every rise in the key indices. Analysts, however, cautioned that during the week there would be some correction as the market has advanced really up.
"The markets will see consolidation as it needs a breather after nine weeks of continued gains," Bonanza Portfolio assistant vice-president for research-equity Avinash Gupta opined. IT bellwether Infosys will kick start the fourth quarter earnings season on Tuesday and the markets will closely watch the revenue outlook by the company.
"Investor sentiment is upbeat ahead of the fourth quarter earning announcements and markets are likely to see some sharp rally," Geojit BNP Paribas Financial Services research head Alex Mathews said. Over the past week, the Bombay Stock Exchange''s 30-share Sensex gained 1.35 per cent to settle at 17,933.14 points, stretching the weekly gaining streak to nine in a row, on the back of sustained buying by FIIs since early February.
During the week, the barometer touched the 18,000-point level, the highest level in more than 25 months. "FIIs are bullish about emerging markets and the domestic markets will continue to witness good inflow in coming days," Jain added.
Foreign funds have put in over Rs 24,255 crore (USD 5.35 billion) in the market so far this year. In just six-trading sessions in April, overseas fund houses have made a net investment of Rs 3,610 crore in the domestic equities.
Over the weekend, the global markets closed firm with Dow Jones settling higher by 0.64 per cent to 10,997.35 and S&P 500 ending up by 0.74 per cent to 1,194.37. The Dow Jones crossed the 11,000-level on Friday, first time in 18 months.
In Asia, China''s Shanghai closed with a gain of 0.85 per cent, Japan''s Nikkei rose 0.32 per cent and Hong Kong''s Hang Seng jumped 1.56 per cent.
| Business |
|
Colourful future in motion for e-readers
Obama is likely to enlist India's support for a renewed drive to impose fresh sanctions against Iran. But given the domestic sensitivity of the issue, Manmohan Singh is expected to reiterate India's position on dialogue and diplomacy as the best option to resolve the Iranian nuclear impasse.
Officials said the Prime Minister's meeting with Kazakh President Nursulatan Nazarbayev is being viewed as very important as Kazakhstan has been one of the leading advocates of nuclear non-proliferation since it became independent in 1991, and also for having signed important nuclear civil cooperation deals with India. There is a possibility of India seeking Kazakhstan's support for a permanent seat in the UN Security Council.
The meeting with French President Nicholas Sarkozy is likely to focus on an upgrading its relations, of which the civil nuclear agreement forms a big part.
Dr. Singh's meeting with his Canadian counterpart Stephen Harper will be the first after India and Canada signed a nuclear agreement a few months ago.
A cut motion puts to test the strength of the government in the Lok Sabha. If the motion is adopted, it amounts to defeat of the government on a money matter and it has to resign.
The second phase of the budget session is beginning on April 15 in the shadow of the Dantewada massacre bringing unprecedented concern over the Maoist menace that saw Home Minister P Chidambaram offering to resign. Tomorrow''s meeting is significant as it is for the first time that these parties are making a common cause on the issue of price rise since the Congress-led UPA came to power for the second time in May last year.
Left parties, which are spearheading the move, are working towards a strategy so that the entire Opposition, including the BJP, could vote on a single cut motion in the Lok Sabha. "Though every party is planning to move cut motions on the Finance Bill, we want to ensure that all the MPs (of Opposition) together vote on a single cut motion -- the one on rolling back the customs and excise duties on petrol and diesel," CPI General Secretary A B Bardhan said.
It will be the first time that Samajwadi Party, which had deserted the Left on the issue of Indo-US nuclear deal, will be back in the fold. SP chief Mulayam Singh Yadav will attend the April 12 meeting along with Prakash Karat of CPM, A B Bardhan of CPI, Lalu Prasad of RJD and leaders of AIADMK, Telugu Desam Party, Biju Janata Dal, Rashtriya Lok Dal, Indian National Lok Dal, JD(S), Forward Bloc and Revolutionary Socialist Party.
While these parties have expressed their willingness to attend the meet, the BSP is yet to respond to the invitation, CPI leader D Raja said.
Sun, Apr 11 04:46 AM
In an embarrassing turn of events for the government on the Civil Nuclear Liability Bill, it has now emerged that there is no extraneous legal compulsion to cap the overall liability amount at 300 million special drawing rights (SDRs). In fact, the international convention India wants to join sets the amount only as a minimum floor for eligibility and not as an upper ceiling.
This has now prompted a rethink on the operative portions of the Bill. In fact, sources said, the advice of the Ministry of External Affairs during consultations was to treat the amount as a "floor" and yet the Bill ended up projecting it as a cap. More importantly, the government seemed to justify that this was done to meet the pre-conditions of the Convention on Supplementary Compensation (CSC) for Nuclear Damage.
It's, however, learnt that while detailing the specifics the Bill needs to address for India to become eligible to join the CSC, the MEA had made it known that 300 million SDRs was the floor and not a cap and also that the liability needs to be fixed on the operator and not the supplier.
Still, the Department of Atomic Energy retained the language which capped the amount. Now, after all the opposition, the DAE is said to be coming in for sharp criticism within the government for keeping the drafting of the Bill such a "secret affair" even though the PMO too was involved in the process.
The details about the liability were meant to mirror the requirements marked in Article III of the CSC, which spells out the "undertaking" a country wanting to join the regime needs to make. It states: "The Installation state shall ensure the availability of 300 million SDR or a greater amount that it may have specified to depository at any time prior to the nuclear incident."
Yet, India's Civil Liability for Nuclear Damage Bill, which has become a controversy even before its introduction, states: "The maximum amount of liability in respect of each nuclear incident shall be the rupee equivalent of three hundred million Special Drawing Rights."
Given that there was no need to specify a "maximum amount", sources said, the Bill could just have identified this as the "minimum" amount available on the table in case of an incident while remaining silent on the upper limit. Instead, the Bill caps the liability which was a step beyond what was needed.
There is still no clarity on the reasoning behind limiting the government's overall liability when it is well known that the government will have to go to any extreme in case a disaster of this nature were to happen.
With the government now having no choice but to refer the Bill to the Parliamentary Standing Committee on Energy headed by Mulayam Singh Yadav, the DAE is now taking a relook at the draft Bill. Sources said changes are being explored, especially on the issue of the liability amount and suggestions like having a fixed amount per megawatt too are being examined.
Further, it's learnt that the PMO has asked the DAE to have wider consultations than to keep the matter under wraps. Much of the criticism of the Bill, sources explained, has been due to a lack of clarity on various technical and legal issues which are becoming clear only after the Bill ran into rough weather.
As for US companies, sources said, there should be no major issue there because the Bill makes it clear that the liability lies solely with the operator and not the supplier, which in the Indian context is the Nuclear Power Corporation of India Ltd.
THE PROBLEM OF THE RUPEE:
ITS ORIGIN AND ITS SOLUTION
(HISTORY OF INDIAN CURRENCY & BANKING)
________________________________________________________________________________________
<!--[if !supportEmptyParas]--> <!--[endif]-->
B. R. AMBEDKAR
Sometime Professor of Political Economy at the Sydenham
College of Commerce and Economics, Bombay.
<!--[if !supportEmptyParas]--> <!--[endif]-->
LONDON P. S. KING & SON, LTD. ORCHARD HOUSE, 2 & 4 GREAT SMITH STREET WESTMINSTER 1923
<!--[if !supportEmptyParas]--> <!--[endif]-->
MY
FATHER AND MOTHER
AS A TOKEN OF MY ABIDING GRATITUDE FOR THE
SACRIFICES THEY MADE AND THE ENLIGHTENMENT
THEY SHOWED IN THE MATTER OF MY EDUCATION.
<!--[if !supportEmptyParas]--> <!--[endif]-->
Printed in Great Britain by Butler & Tanner Ltd., Frome and London
<!--[if !supportEmptyParas]--> <!--[endif]-->
Contents
<!--[if !supportEmptyParas]--> <!--[endif]-->
Preface To The Second Impression<!--[if !supportNestedAnchors]--><!--[endif]-->
Foreword By Professor Edwin Cannan<!--[if !supportNestedAnchors]--><!--[endif]-->
Chapter I - From A Double Standard To A Sliver Standard
Chapter II- The Silver Standard And The Dislocation Of Its Parity
Chapter III- The Silver Standard And The Evils Of Its Instability
Chapter IV -Towards A Gold Standard
Chapter V - From A Gold Standard To A Gold Exchange Standard
Chapter VI - Stability Of The Exchange Standard
Chapter VII- A Return To The Gold Standard
<!--[if !supportEmptyParas]--> <!--[endif]-->
PREFACE TO THE SECOND IMPRESSION
THE PROBLEM OF THE RUPEE was first published in 1923. Ever since its publication it has had a great demand : so great that within a year or two the book went out of print. The demand for the book has continued, but unfortunately I could not bring out a second edition of the book for the reason that my change-over from economics to law and politics left me no time to undertake such a task. I have, therefore, devised another plan : it is to bring out an up-to-date edition of the History of Indian Currency and Banking in two volumes, of which The Problem of the Rupee forms volume one. Volume two will contain the History of Indian Currency and Banking from 1923 onwards. What is therefore issued to the public now is a mere reprint of The Problem of the Rupee under a different name. I am glad to say that some of my friends who are engaged in the field of teaching economics have assured me that nothing has been said or written since 1923 in the field of Indian Currency which calls for any alteration in the text of The Problem of the Rupee as it stood in 1923. I hope this reprint will satisfy the public partially if not wholly. I can give them an assurance that they will not have to wait long for volume two. I am determined to bring it out with the least possible delay.
Bombay,
7-5-1947.
<!--[if !supportEmptyParas]--> <!--[endif]-->
PREFACE TO THE FIRST EDITION
In the following pages I have attempted an exposition of the events leading to the establishment of the exchange standard and an examination of its theoretical basis.
In endeavouring to treat the historical side of the matter, I have carefully avoided repeating what has already been said by others. For instance, in treating of the actual working of the exchange standard, I have contented myself with a general treatment just sufficiently detailed to enable the reader to follow the criticism I have offered. If more details are desired they are given in all their amplitude in other treatises. To have reproduced them would have been a work of supererogation; besides it would have only obscured the general trend of my argument. But in other respects, I have been obliged to take a wider historical sweep than has been done by other writers. The existing treatises on Indian currency do not give any idea, at least an adequate idea, of the circumstances which led to the reforms of 1893. I think that a treatment of the early history is quite essential to furnish the reader with a perspective in order to enable him to judge for himself the issues involved in the currency crisis and also of the solutions offered. In view of this, I have gone into that most neglected period of Indian currency extending from 1800 to 1893. Not only have other writers begun abruptly the story of the exchange standard, but they have popularised the notion that the exchange standard is the standard originally contemplated by the Government of India. I find that this is a gross error. Indeed, the most interesting point about Indian currency is the way in which the gold standard came to be transformed into a gold exchange standard. Some old, but by now forgotten, facts had therefore, to be recounted to expose this error.
On the theoretical side, there is no book but that of Professor Keynes which makes any attempt to examine its scientific basis.
But the conclusions he has arrived at are in sharp conflict with those of mine. Our differences extended to almost every proposition he has advanced in favour of the exchange standard. This difference proceeds from the fundamental fact, which seems to be quite overlooked by Professor Keynes, that nothing will stabilise the rupee unless we stabilise its general purchasing power. That the exchange standard does not do. That standard concerns itself only with symptoms and does not go to the disease : indeed, on my showing, if anything, it aggravates the disease.
When I come to the remedy, I again find myself in conflict with the majority of those who like myself are opposed to the exchange standard. It is said that the best way to stabilise the rupee is to provide for effective convertibility into gold. I do not deny that this is one way of doing it. But, I think, a far better way would be to have an inconvertible rupee with a fixed limit of issue. Indeed, if I had any say in the matter, I would propose that the Government of India should melt the rupees, sell them as bullion and use the proceeds for revenue purposes and fill the void by an inconvertible paper. But that may be too radical a proposal, and I do not therefore press for it, although I regard it as essentially sound. in any case, the vita! point is to close the Mints, not merely to the public, as they have been, but to the Government as well. Once that is done, I venture to say that the Indian currency, based on gold as legal tender with a rupee currency fixed in issue, will conform to the principles embodied in the English currency system.
It will be noticed that I do not propose to go back to the recommendations of the Fowler Committee. All those, who have regretted the transformation of the Indian currency from a gold standard to a gold exchange standard, have held that everything would have been all right if the Government had carried out in toto the recommendations of that Committee. I do not share that view. On the other hand, I find that the Indian currency underwent that transformation because the Government carried out those recommendations. While some people regard that Report as classical for its wisdom, I regard it as classical for its nonsense. For I find that it was this Committee which, while recommending a gold standard, also recommended and thereby perpetuated the folly of the Herschell Committee, that Government should coin rupees on its own account according to that most naive of currency principles, the requirements of the public, without realising that the latter recommendation was destructive of the former. Indeed, as I argue, the principles of the Fowler Committee must be given up, if we are to place the Indian currency on a stable basis.
I am conscious of the somewhat lengthy discussions on currency principles into which I have entered in treating the subject. My justification of this procedure is two-fold. First of all, as I have differed so widely from other writers on Indian currency, I have deemed it necessary to substantiate my view-point, even at the cost of being charged with over-elaboration. But it is my second justification, which affords me a greater excuse. It consists in the fact that I have written primarily for the benefit of the Indian public, and as their grasp of currency principles does not seem to be as good as one would wish it to be, an over-statement, it will be agreed, is better than an understatement of the argument on which I have based my conclusions.
Up to 1913, the Gold Exchange Standard was not the avowed goal of the Government of India in the matter of Indian Currency, and although the Chamberlain Commission appointed in that year had reported in favour of its continuance, the Government of India had promised not to carry its recommendations into practice till the war was over and an opportunity had been given to the public to criticize them. When, however, the Exchange Standard was shaken to its foundations during the late war, the Government of India went back on its word and restricted, notwithstanding repeated protests, the terms of reference to the Smith Committee to recommending such measures as were calculated to ensure the stability of the Exchange Standard, as though that standard had been accepted as the last word in the matter of Indian Currency. Now that the measures of the Smith Committee have not ensured the stability of the Exchange Standard, it is given to understand that the Government, as well as the public, desire to place the Indian Currency System on a sounder footing. My object in publishing this study at this juncture is to suggest a basis for the consummation of this purpose.
I cannot conclude this preface without acknowledging my deep sense of gratitude to my teacher, Prof. Edwin Cannan, of the University of London (School of Economics). His sympathy towards me and his keen interest in my undertaking have placed me under obligations which I can never repay. I feel happy to be able to say that this work has undergone close supervision at his hands, and although he is in no way responsible for the views I have expressed. I can say that his severe examination of my theoretic discussions has saved me from many an error. To Professor Wadia, of Wilson College, I am thankful for cheerfully undertaking the dry task of correcting the proofs.
<!--[if !supportEmptyParas]--> <!--[endif]-->
<!--[if !supportEmptyParas]--> <!--[endif]-->
FOREWORD
I am glad that Mr. Ambedkar has given me the opportunity of saying a few words about his book.
As he is aware, I disagree with a good deal of his criticism. In 1893, I was one of the few economists, who believed that the rupee could be kept at a fixed ratio with gold by the method then proposed, and I did not fall away from the faith when some years elapsed without the desired fruit appearing (see Economic Review, July 1898, pp. 400—403). I do not share Mr. Ambedkar's hostility to the system, nor accept most of his arguments against it and its advocates. But he hits some nails very squarely on the head, and even when I have thought him quite wrong, I have found a stimulating freshness in his views and reasons. An old teacher like myself learns to tolerate the vagaries of originality, even when they resist "severe examination " such as that of which Mr. Ambedkar speaks.
In his practical conclusion, I am inclined to think, he is right. The single advantage, offered to a country by the adoption of the gold-exchange system instead of the simple gold standard, is that it is cheaper, in the sense of requiring a little less value in the shape of metallic currency than the gold standard. But all that can be saved in this way is a trifling amount, almost infinitesimal, beside the advantage of having a currency more difficult for administrators and legislators to tamper with. The recent experience both of belligerents and neutrals certainly shows that the simple gold standard, as we understood it before the war, is not fool-proof, but it is far nearer being fool-proof and knave-proof than the gold-exchange standard. The percentage of administrators and legislators who understand the gold standard is painfully small, but it is and is likely to remain ten or twenty times as great as the percentage which understands the gold-exchange system. The possibility of a gold-exchange system being perverted to suit some corrupt purpose is very considerably greater than the possibility of the simple gold standard being so perverted.
The plan for the adoption of which Mr. Ambedkar pleads, namely that all further enlargement of the rupee issue should be permanently prohibited, and that the mints should be open at a fixed price to importers or other sellers of gold, so that in course of time India would have, in addition to the fixed stock of rupees, a currency of meltable and exportable gold coins, follows European precedents. In eighteenth-century England the gold standard introduced itself because the legislature allowed the ratio to remain unfavourable to the coinage of silver: in nineteenth-century France and other countries it came in because the legislatures definitely closed the mints to silver, when the ratio was favourable to the coinage of silver. The continuance of a mass of full legal tender silver coins beside the gold would be nothing novel in principle, as the same thing, though on a somewhat smaller scale, took place in France, Germany, and the United States.
It is alleged sometimes that India does not want gold coins. I feel considerable difficulty in believing that gold coins of suitable size would not be convenient in a country with the climate and other circumstances of India. The allegation is suspiciously like the old allegation that the " Englishman prefers gold coins to paper," which had no other foundation than the fact that the law prohibited the issue of notes for less than £ 5 in England and Wales, while in Scotland, Ireland, and almost all other English-speaking countries, notes for £ 1 or Less were allowed and circulated freely. It seems much more likely that silver owes its position in India to the decision, which the Company made before the system of standard gold and token silver was accidentally evolved in 1816 in England, and long before it was understood, and that the position has been maintained, not because Indians dislike gold, but because Europeans like it so well that they cannot bear to part with any of it.
This reluctance to allow gold to go to the East is not only despicable from an ethical point of view. It is also contrary to the economic interest not only of the world at large, but even of the countries, which had a gold standard before the war and have it still or expect soon to restore it. In the immediate future, gold is not a commodity, the use of which it is desirable for these countries either to restrict or to economize. From the closing years of last century it has been produced in quantities much too large to enable it to retain its purchasing power and thus be a stable standard of value, unless it can constantly be finding existing holders willing to hold larger stocks, or fresh holders to hold new stocks of it. Before the war, the accumulation of hoards by various central banks in Europe took off a large part of the new supplies and prevented the actual rise of general prices being anything like what it would otherwise have been, though it was serious enough. Since the war, the Federal Reserve Board, supported by all Americans who do not wish to see a rise of prices, has taken on the new " White Man's Burden " of absorbing the products of the gold mines, but just as the United States failed to keep up the value of silver by purchasing it, so she will eventually fail to keep up the value of gold. in spite of the opinion of some high authorities, it is not at all likely that a renewed demand for gold reserves by the central banks of Europe will come to her assistance. Experience must gradually be teaching even the densest of financiers that the value of paper currencies is not kept up by stories of " cover " or " backing " locked up in cellars, but by due limitation of the supply of the paper. With proper limitation, enforced by absolute convertibility into gold coin which may be freely melted or exported, it has been proved by theory and experience that small holdings of gold are perfectly sufficient to meet all internal and international demands. There is really more chance of a great demand from individuals than from the banks. It is conceivable that the people of some of the countries, which have reduced their paper currency to a laughing stock, may refuse all paper and insist on having gold coins. But it seems more probable that they will be pleased enough to get better paper than they have recently been accustomed to, and will not ask for hard coin with sufficient insistence to get it. On the whole, it seems fairly certain that the demand of Europe and European-colonised lands for gold will be less rather than greater than before the war, and that it will increase very slowly or not at all.
Thus, on the whole, there is reason to fear a fall in the value of gold and a rise of general prices rather than the contrary.
One obvious remedy would be to restrict the production of gold by international agreement, thus conserving the world's resources in mineral for future generations. Another is to set up an international commission to issue an international paper currency so regulated in amount as to preserve an approximately stable value. Excellent suggestions for the professor's classroom, but not, at present at any rate nor probably for some considerable period of time, practical politics.
A much more practical way out of the difficulty is to be found in the introduction of gold currency into the East. If the East will take a large part of the production of gold in the coming years it will tide us over the period which must elapse before the most prolific of the existing sources are worked out. After that we may be able to carry on without change or we may have reached the possibility of some better arrangement.
This argument will not appeal to those who can think of nothing but the extra profits which can be acquired during a rise of prices, but I hope it will to those who have some feeling for the great majority of the population, who suffer from these extra and wholly unearned profits being extracted from them. Stability is best in the long run for the community.
Two top Maoist leaders plotted Dantewada massacreTimes of India - - 11 hours ago NEW DELHI: Investigators have made headway in identifying the masterminds of the Dantewada massacre as Ramanna Paparao and Ramanna, two powerful Maoist leaders operating in the region, even as some details of "fieldcraft" errors committed by the ... Chidambaram: States have bigger role in tackling NaxalsTimes of India - 10 hours ago PUDUCHERRY: Union home minister P Chidambaram on Saturday reiterated his stand that state governments had a greater responsibility and role in tackling Maoists than the Centre. At a press meet here, he said the Centre's role, according to the mandate ... The Maoist empire Rs 1500 crore & countingTimes of India - 14 hours ago BHUBANESWAR/RANCHI/KOLKATA: A yearly turnover in excess of Rs 1500 crore. Targets raised by 15% every year, investments here, cutbacks there, acquisitions made, salaries paid, perks for the star performers...That's the mid-sized corporation called the ...
Jawans reportedly flouted instructions alerting NaxalsEconomic Times - 13 hours ago NEW DELHI: Even though the CRPF contingent butchered by the Maoists in Dantewada was specifically directed to move only on the periphery of the Chintalnar village and make do with dry rations during the three-day area domination exercise starting April ... Maoist menace: States not backing ChidambaramIBNLive.com - 19 hours ago New Delhi: Union Home Minister P Chidmabaram on Saturday confirmed that he indeed offered to resign in the wake of the Dantewada massacre, but also added that it was now a closed chapter. "CRPF is under my charge. The tragedy happened under my watch. ... The buck starts and stops with the jawanDaily News & Analysis - 14 hours ago Bastar (Chattisgarh): Even as a debate rages on where the buck should stop, the reality on the ground is that it's the CRPF jawan left holding the can. With the civil administration and local politicians unwilling to stick their necks out, ... Resignation a closed chapter: ChidambaramEconomic Times - Apr 10, 2010 PUDUCHERRY: Home Minister P Chidambaram on Saturday said he had decided to quit after the Dantewada massacre because the Central Reserve Police Force (CRPF) that lost 75 men came under his charge. But he added that the resignation was a "closed ... We have reached the turning pointHindustan Times - 15 hours ago If there is one thing we are all agreed on, it is this: last week's ambush of a Central Reserve Police Force (CRPF) party by the Maoists which left around 76 soldiers dead must be condemned in the strongest possible terms. No matter which side of the ... PC's resignation will mean victory for Naxals: BJPIndian Express - 20 hours ago The BJP on Friday said it did not agree with Home Minister P Chidambaram's offer to resign "as it would mean a victory for Naxals". "The BJP does not want Chidambaram to resign at this stage. His resignation at this stage would mean a victory for ... Dantewada attack not to determine govt policy on Naxalism: SourcesDaily News & Analysis - 18 hours ago PTI Washington, DC: The worst-ever Naxal attack in Chhattisgarh's Dantewada district will "not determine" the government's strategy of dealing with the "most serious threat" to internal security, Indian government sources have said. ... | Timeline of articlesNumber of sources covering this story
Images The Hindu  BBC News  Calcutta Telegr...  BBC News  Indian Express  Indian Express  Daily News & An...  Indian Express  Deccan Herald |
Experts fear more affected by radiation in Mayapuri
Nitish questions strategy against Naxals
Sikkim lawyers seek CM's help
Email this story
Sebi Irda battle it out?
Email this story
Major fire in plastic scrap market in NW Delhi
Email this story
3G bids inch up on second day of auction
Email this story
Need to revisit financial sector rules: FM
Email this storyIndia: What Ails the Giant? - Interview with Prabhat Patnaik
Jayati Vora
Between 1997 and 2005, one Indian farmer committed suicide every thirty-two minutes in India. Since then, it's dropped to one suicide every thirty minutes. Last year, India fell two spots to rank 128th in the UN Development Program's Human Development Index--behind El Salvador, Guatemala, Botswana, Sri Lanka and the Occupied Palestinian Territories. Yet, even in the face of massive rural and substantial urban distress, pundits continue to praise India for being a "powerhouse economy" and a "stirring giant."
The agrarian crisis is the most glaring--yet mostly ignored--aspect of economic policy gone wrong in India. In a country where more than two-thirds of the population is engaged in some form of agriculture, the agrarian sector has been the hardest hit. Since India's economy was opened up in the late 1980s, successive governments have withdrawn their support to Indian farmers competing against billions of dollars of government financial aid to their counterparts in the United States, causing the worst economic and humanitarian crisis in India since independence in 1947. Many farmers are killing themselves over debts of as little as a few hundred dollars.
Prabhat Patnaik, professor of economics at Jawaharlal Nehru University in New Delhi, is one of many who blame the current crisis on the Indian government's retreat from agriculture, adherence to WTO-imposed reductions on import duties and the thrust toward neoliberalism. He has been a vocal critic of their negative impact on the Indian economy.
The 62-year-old professor is vice-chairman of the State Planning Board in the southern Indian state of Kerala and was the chairman of the Second State Finance Commission. He is the author of several books, including Economics and Egalitarianism (1991), Whatever Happened to Imperialism and Other Essays (1995) and Accumulation and Stability under Capitalism (1997). He answered questions recently at Columbia University, where he was delivering a series of lectures.
Do the pundits have it right? Is India truly the powerhouse they claim it is?
The rate of growth means nothing to me--and in that, John Stuart Mill is my illustrious predecessor. The object, instead, is to raise the living conditions of the bulk of the population. Mahatma Gandhi said that one must wipe away the tears from every Indian's eyes. Yes, there was a period of high growth, but there also was sharply increased inequality and absolute misery for a certain population. According to one Washington, DC, study [by the International Food Policy Research Institute], our malnutrition index is below that of Ethiopia. So in terms of nutritional poverty, there has been an impoverishment of the people. In 1993-94, 74.5 percent of rural India did not access the poverty level. In 2004-05 the figure was 87 percent. In 1993-94, 57 percent of urban India did not access it, and by 2004-05, the number went up to 64 percent.
Why are people more impoverished now?
It's the high rates of labor productivity. High growth doesn't alleviate poverty because it doesn't absorb labor. In any society--especially India and China--that has been colonized and de-industrialized, there's unemployment, underemployment and disguised unemployment. Take the shoeshine boy--that's disguised unemployment. These people are poor. And because they exist, they pull down the wage rate of employed people to subsistence level. So the existence of this army of laborers is the root cause of poverty. Unless employment begins to rise, poverty won't disappear.
The Kerala model used to be famous for its universal healthcare and high literacy rates. Can you explain what has worked and what hasn't? [Kerala has had a Communist government for many decades.]
Well, in Kerala's history there were widespread land reforms. But now those reforms are being threatened. There are private plantations that have hundreds of acres of land; government land is being grabbed [by private interests]; people are being dispossessed; there is real estate speculation. The tax revenue hasn't increased in Kerala, so government expenditure hasn't increased. It's behind what's required to maintain the high levels of healthcare and education. So the model is falling apart.
What can be done to stop it?
Kerala is in acute crisis because it's functioning within India, which is governed by neoliberal economic policies. In Kerala there is significant cash crop production. International prices are falling, so there have been high suicide rates among the farmers. Also, there aren't many industrial units in the state. Ninety-five percent of people are engaged in petty, small-scale, unorganized production. These sectors have also been hit. We are trying to set up a debt-relief commission on a case-by-case basis. The National Rural Employment Guarantee (NREG) scheme is also helping a lot. It puts income in the hands of peasants and other petty producers. To survive, you renovate, upgrade your technology. If that happens under capitalist conditions, you will be thrown out of employment. We're trying to do it on a cooperative basis. What you lose out on wage income, you gain in profit income. It's an attempt at development from below, which doesn't destroy small producers and adds value. We also do IT and tourism in Kerala; those are our sunrise industries.
Can you talk some more about the NREG? What does it mean for poor people in India?
To my mind, the NREG is the most important piece of legislation in post-independence India. It gives you the right to apply for work, and if you're not given employment in fifteen days, you're entitled to unemployment allowance. It promises you up to 100 days of work per household. The government doesn't know the significance of this scheme, because people are not aware of their rights and are not demanding them, but awareness is growing. I've visited Wayanad district in Kerala several times, where the NREG is actually making a difference to people. When people get this extra money, they can spend it and help other businesses.
What are the differences in economic policy between the BJP [Bharatiya Janata Party] and the Congress party governments?
Both the BJP and Congress are following neoliberal policies. But you have to remember that it's not just the Congress that's in power now, it's the UPA (United Progressive Alliance), a coalition government that is supported by the left. So it's UPA versus BJP. Thus the left is putting a check on the neoliberal thrust of the government.
Why isn't the government doing anything to relieve rural distress?
The eleventh five-year plan says we need "inclusive growth"--that's the government's admission. So the government is supposed to intervene to take the benefits of growth to the people. But intervention can also answer the demands of the few. To meet the increasing demand for holidays abroad, the government is forced to increase the number of airports rather than spend on healthcare for the poor. Government investment gets pulled in the direction of elite demand, so there's less money left to build roads in villages. What the government should have done earlier is income redistribution, public transport investment.
Why aren't the farmers protesting?
In India, the form the protests are taking is suicide; it's an inward-looking protest. Usually, the peasant class gets organized through middle-class leaders and intellectuals. Unfortunately, the middle class is a big beneficiary of neoliberal policies. The middle class in India has seceded from the country, from what's going on with the peasantry. There are some peasant movements, for example against the Special Economic Zones, where the government has seized land from peasants ostensibly for industrial development but in some cases for land speculation. But there are no big peasant movements.
Why isn't the left doing more?
The left parties are demanding government debt relief commissions, but [Prime Minister] Manmohan Singh has still not given debt relief, only interest relief and debt rescheduling, so they can pay later. But that doesn't write off the loan. When Singh went to Vidharba [district in the state of Maharashtra, one of the worst hit by the farmers' suicides], he did not promise price support to the peasantry. Everybody wanted raw cotton prices to be remunerative to peasants, which they are not. [But] that would mean going back on the neoliberal agenda.
Do you think the forthcoming US recession will have any impact on the Indian economy?
A. Prime Minister Singh and [Finance Minister] P. Chidambaram are saying that the US recession won't have much of an impact, since India is not a substantial net exporter. It's true that we import more than we export. But if there's a recession in the United States it will push down prices for primary commodities. And if cash crop prices drop, that could lead to more farmer suicides. This would also be true of Africa and other similar societies. That's the trade effect: world prices for commodities go down relative to manufacturing prices, so peasants become impoverished unless there's a procurement scheme [price supports] or tariff protection. But the current government is following the WTO's neoliberal policy and gradually eliminating both tariff protections and procurement schemes.
What are your thoughts on the hype around microcredit?
After bank nationalization in the 1970s, there was substantial credit going to the countryside. But rural institutional lending has declined in recent years because commercial banks have closed down many of their rural branches. Commercial banks are now into credit cards, not rural credit. In the place of institutional lenders like the commercial banks, private village money lenders are thriving, often on the basis of bank loans which they access and then pass on at usurious interest rates to the peasantry. You say, Yes, yes, they'll be taken care of by microcredit. But that's a sop, at best.
Much of this microcredit is not for productive purposes. It's for consumption. Microcredit also has a high rate of interest--the National Commission on Farmers said that interest rates should be reduced to 4 percent for rural peasants, and yet it sanctions a 25 percent rate in microcredit for poor women. In addition, microcredit is allowing the proliferation of a new breed of moneylenders. If I organize a microcredit society, I become an intermediary. There's no limit on the number of such societies that I can belong to. That becomes my business. Microcredit actually separates the poor from credit. We should force banks--as Indira Gandhi did--to go into the countryside and support priority-sector lending. The banks are supposed to give a certain percentage of their loans to agriculture, but they're not doing so. Instead of punishing them, we've widened the definition of agriculture. So if Coke sets up a plant in rural India and uses some agricultural raw material, that passes as an agricultural loan.
Courtesy The Nation, NY
Sun, Apr 11 04:46 AM
While suggesting an acceleration of development and strengthening of security in Maoist-infested areas, Bihar Chief Minister Nitish Kumar advised restraint to political leadership while talking about Naxal violence.
"Speaking does not help much," Nitish Kumar said when asked what advice did he have for Home Minister P Chidambaram in the aftermath of the Dantewada massacre. He was responding to questions from media persons at an interaction with members of the Indian Women's Press Corps on Saturday.
Nitish said he could suggest on the basis of his own experience with Jahanabad, which became the hotbed of ultra-Left violence over three decades back, that the government had to tone up the delivery system at the local level, free it of corruption and inefficiency, saturate the area with development and make the PDS effective. Failing this, even if the security forces eliminated Maoists in one area, they were bound to resurface in some other area.
Nitish admitted he and JD(U) president Sharad Yadav differed over the Women's Reservation Bill. "He says the Bill should not be brought without this (a provision for sub-quotas for minorities, OBCs, SCs and STs), I say let the Bill be passed first and the issue of quota within quota can be discussed later." However, he made it clear, both of them stood by the stated party position in favour of reservations for women as well as quotas within quota. There were no differences over any other issue between him and Sharad Yadav, he added.
The Bihar Chief Minister recalled he had given a note of dissent when the joint parliamentary committee headed by CPI member Geeta Mukherjee had submitted its report on the women's reservations. But, he changed his view after he saw the impact of his own decision to introduce 50 per cent quota for women in panchayats.
About the proposed Food Security Bill, Nitish said there was a vast gap between the state and Central figures vis-à-vis BPL families. The Centre accepted only 65 lakh BPL families against 1.40 crore enumerated by the state. This matter could be resolved either through the enforcement of a mutually agreed criteria or the appointment of a statutory commission for the identification of BPL families.
Modi, Varun need not campaign: Nitish hint
NEW DELHI: BJP leaders Narendra Modi and Varun Gandhi are not needed for campaigning for the Assembly elections in Bihar, Chief Minister Nitish Kumar suggested on Saturday. "This is not national elections but state elections. Workers of (state unit of) BJP are capable of putting forth their views before the people," the leader of BJP ally JD(U) said.
Sun, Apr 11 04:46 AM
The Bandi Mukti Committee along with SUCI — Mamata Banerjee's ally — took out a rally in Kolkata on Saturday afternoon demanding the release of Chattradhar Mahato and granting him the status of a political prisoner in jail.
The Committee and SUCI also protested near the Alipore Central Jail and submitted a deputation to the jail superintendent.
Mahato, meanwhile, went on a hunger strike in Midnapore jail on Saturday in protest against the alleged atrocities committed by the jail staff against him. He also filed an application with the Midnapore court on Friday, alleging that the jail staff threatened to kill him.
"On March 17, the IG prisons ordered that interviews of political prisoners will be stopped. We demand a repeal of the directive. Moreover, we demand that people who have been arrested for political reasons should be granted the status of political prisoners," said Choton Das, general secretary of the Committee.
"In Alipore Central Jail, 469 inmates, including Himadri Sen Roy (Maoist leader), are said to have started a relay hunger strike," added Das.
The rally, which included around 100-odd activists of the committee and SUCI supporters, began from Hazra crossing in south Kolkata and ended near Alipore Central Jail. SUCI legislator Debaprasad Sarkar also participated in the rally and lambasted the jail authorities for allegedly ill treating the political prisoners.
Sun, Apr 11 04:46 AM
Moving swiftly to put a stop to conflicting views aired by service chiefs on tackling Naxal problem in the wake of Dantewada attack, the Cabinet Secretariat on Saturday issued an order authorising only the Home Ministry to officially speak on the issue.
According to sources in the government, the directive from Cabinet Secretary K M Chandrashekhar was felt necessary given the contradictory voices that had emanated from topmost functionaries, including the Army and Air chiefs on the Naxal issue. It is understood that the order, which says that only the Home Ministry will be the nodal ministry speaking on the Naxal issue, was at the behest of Prime Minister Manmohan Singh.
Just two days after the attack in which 76 security personnel were killed, Army chief General V K Singh contended that the high casualty was a result of deficiency in training pattern of the CRPF personnel. "There were internal deficiencies in what happened there, in training and other things," General Singh had said, maintaining that training in the Army was more homogenous and therefore, prone to lower casualties.
With such remarks hitting the morale of the CRPF, Union Home Minister P Chidambaram was compelled to immediately come out with a rebuttal asserting that the CRPF was among the finest police forces in the country doing its job in the worst of terrain.
Similarly, Air Chief Marshal P V Naik had contended that the Air Force could not be used "on our own people". Senior Home Ministry officials said the Air Chief's remarks were misplaced as Armed Forces were being used in Jammu & Kashmir as well as the Northeast.
Officials said the latest order was expected to put an end to the inconsistent views, adding that a similar directive authorising only one ministry to brief the media had been issued during the Satyam scandal. "At that time, only the Ministry of Corporate Affairs was asked to make official statements on the Satyam issue," officials said, adding it was done after the IT Ministry gave out contradictory views. The different positions had then adversely impacted prices of Satyam shares.
To avoid such differing voices emanating from the government, recently a decision was taken to set up an empowered committee comprising the Union Home Minister, I&B Minister, Cabinet Secretary, Home Secretary as well as the media advisor to the Prime Minister that would decide on media briefings with only one version coming out.
Officials, however, said the panel would become operational specifically during situations like famines and medical emergencies.
Sun, Apr 11 10:45 AM
New Delhi, April 11 -- The BJP and Left on Saturday asked the UPA government to come clear on the need for the nuclear liabilities bill if the private sector was barred from nuclear power generation. This came after Congress spokesperson Manish Tiwari said that Science and Technology Minister Prithviraj Chavan categorically stated that there was no plan to open the nuclear sector for private players.
"What is the need for the bill if the government has to run all nuclear power plants?" asked BJP leader Murli Manohar Joshi at a seminar on the nuclear liability bill on Saturday. "We asked the same question to the national security adviser (Shiv Shankar Menon) but he gave no answer.
" CPI's D. Raja also said there was no need for a three-tier liability regime as proposed in the bill if private sector is not allowed in the nuclear sector. "We feel that the government is not being truthful to its people in the bill.
It (the bill) is the first step to allow private sector," Raja said. Joshi expressed similar apprehensions, quoting US government officials to point out that companies in America were getting ready to invest in civil nuclear energy in India once the bill was passed by Parliament.
The government had listed the introduction of the nuclear liabilities bill in the first part of budget session, but backtracked when the Opposition made it clear that they would seek voting at the time of introduction. After that, the government had discussed the bill with some Opposition parties.
On the Centre's argument that the bill could be discussed by a parliamentary committee, the leaders of the major Opposition parties said the standing committee recommendations were not mandatory for the government to accept. "We are not against nuclear energy," Raja said.
"But our opposition to the bill will continue till the government states the scientific reason for the liability cap and the need for bringing the bill now." Tiwari said the liability in the bill was better than that in Canada and China, and on a par with that of France, where nuclear energy is 85 per cent of its total energy generation.
Sun, Apr 11 10:05 AM
Kolkata, April 11 -- The CPI(M) has failed to douse class consciousness within a section of its ranks and steer it towards people's movement, Biman Bose, state secretary of CPI(M), has admitted in a recent document being circulated by the party. "The duty of a mass organisation is not just to hold one or two committee meetings and recruit new members.
It is the leadership's responsibility to lead the members into working class movement. It is unfortunate that even after all these years we have failed to introduce the required idealistic change among members.
The party has failed to steer a section of members to emerge as warriors of the working class," Bose has said in the article, which analyses the Maoist movement and unrest in Bengal's tribal belts at length. Significantly, about six months before his death, former CPI(M) state secretary Anil Biswas had prepared a detailed report on decadence in the organisation and warned the leadership of a severe crisis.
But a tremendous victory in 2006 Assembly polls apparently made the leadership too complacent to take action on his report. Till recently, Bose, Biswas' successor, had never made such scathing remarks in documents.
CPI(M) leaders feel the rectification process and the imminent civic polls, which are nothing short of a precursor to the Assembly elections of 2011, has forced the state secretary to lash out. "A section within the party has failed to realise why we are not in power at the Centre though we have ruled Bengal for 33 years.
Now, it has become all the more necessary to follow the eight conditions while inducting new members. The party cannot ignore this process at any level and under any circumstance.
Unless ill or rendered incapable by age, every members has to work for the party," Bose has said. The state secretary has expressed noticeable concern over raising of funds.
"We are aware that the party needs funds to perform. But members should be stopped from approaching rich businessmen, corporate houses and 'undesirable elements' for money.
Money should be raised directly from the masses, though drives in every neighbourhood," said Bose. Earlier, the Left Front chairman had said that rectification in the CPI(M) would begin from the top and his Politburo colleague, Prakash Karat, had said that the party's "glorious history" in West Bengal had been tarnished by the greed for power and money of some.
Attributed the decline in the party's fortunes in Bengal to "bourgeois influence on living standards, Karat had criticised the deviation of Marxists from simple living.
Popularly called 'Pranab da', he even shared a car with West Bengal Chief Minister Buddhadeb Bhattacharjee - archrival of Mamata Banerjee - after a meeting at the prime minister's residence over price rise.
Mukherjee is not believed to be too happy about Banerjee meddling in the central government's handling of problems in the Left-ruled state.
But Banerjee, often addressed as 'Didi', had to be silent on Pranab da's open bonhomie with the Marxists because she fears he may lose his temper, which he often does. She also believes that he has the ability to broker a political alliance with the Communists in the state where she is making an all-out effort to end three decades of leftist rule, they say.
-*-
A Thackeray waits
Is the Congress reluctant to open its doors to Smita Thackeray, who has fallen out with her father-in-law Shiv Sena chief Bal Thackeray? Or has she set her sights too high?
Though it has been over four months since she sent clear feelers to the grand old party, matters haven't moved much. While Smita wants to be invited by no less than Congress president Sonia Gandhi, the party's Maharashtra unit finds no reason for the leadership to indulge her.
State Congress leaders feel she is being over-ambitious and does not merit the prominence she seeks, a little birdie has it. They say she has the option of joining the party the way millions of others do - by filling up a membership form.
-*-
What an idea, madam ji
The Jammu and Kashmir government faced a breakdown over a controversial bill allowing educated youths to apply for government jobs only in one's home district. But it seems the crisis was averted, thanks to 'madam'!
The legislation would mean that Scheduled Caste candidates would have to stick to districts in the Jammu region only as there is nobody from Muslim-dominated Kashmir Valley who falls in that category.
Pitted against each other were lawmakers from the Valley and Jammu until Chief Minister Omar Abdullah knocked on 10, Janpath, the residence of Congress chief Sonia Gandhi.
From there he got a brief to ensure a provision under which Scheduled Caste candidates could apply for government jobs in any of the 22 districts in the state, sources say.
The crisis was defused and the National Conference-Congress coalition saved.
-*-
Azad's tobacco tale
It's health hazard, of course, but there's another reason why Health Minister Ghulam Nabi Azad is working hard to curb chewing tobacco! The story dates back to 1975 when he was a Youth Congress leader.
The minister said a friend from Bhopal once gave him a betel leaf laced with tobacco after a conference here. 'I had never had it before and when I chewed I was down within minutes. My head was reeling and I was feeling giddy for two days. That was my first and last experience with tobacco.'
No wonder, he speaks of bringing in legislation to control the consumption of tobacco.
-*-
`Untamed' Aiyar
Senior Congress leader Mani Shankar Aiyar's entry to the Rajya Sabha in the nominated category has virtually ruled out a place for him in the cabinet. But he is still unflappable.
Aiyar, who was part of the last United Progressive Alliance (UPA) government, says he had seen the system inside out when he was part of the cabinet and 'had no particular desire to be a minister.'
Aiyar now wishes to fulfil his role as an 'untamed' MP, something he could not do earlier as a minister.
-*-
Peer rivalry?
Call it a deliberate slipup or peer rivalry, but prominent lawyer faces of the Congress media team chose to stay away from the national convention of lawyers organised by Abhishek Manu Singhvi, who heads the party's legal and human rights department.
Prominent lawyers Manish Tewari and Jayanthi Natarajan, who are also spokespersons of the party, were conspicuous by their absence at the convention addressed by top Congress leaders, including Prime Minister Manmohan Singh, party president Sonia Gandhi and union ministers Pranab Mukherjee, P. Chidambaram and M. Veerappa Moily.
Tewari and Natarajan were not among the speakers and were apparently not interested in just being listeners. Two other prominent lawyer faces of the party - Kapil Sibal and Anand Sharma - too were not present.
-*-
Operation Azad at AIIMS
After months of severe opposition from within the All India Institute of Medical Sciences (AIIMS), Health Minister Ghulam Nabi Azad has finally had his way.
He has managed to inject A.H. Zargar, a doctor from his home state of Jammu and Kashmir, into the the highest decision making body of the premier medical institute.
Zargar, an endocrinologist from Srinagar hospital, will share the official position with political bigwigs like Leader of Opposition Sushma Swaraj, Rajya Sabha MP R.K. Dhawan, Lok Sabha MP Jyoti Mirdha and Delhi University vice chancellor Deepak Pental.
The recent capture of the Afghan Taliban's second in command Mullah Abdul Ghani Baradar seemed to signal a turning point in Pakistan. But US officials now think that even as Pakistan's security forces worked with their American counterparts to capture Baradar and other insurgents, ISI, quietly freed at least two senior Afghan Taliban figures it had captured on its own, the influential US daily reported Sunday.
The Post cited unnamed US military and intelligence officials as saying the releases, detected by American spy agencies but not publicly disclosed, are evidence that parts of Pakistan's security establishment continue to support the Afghan Taliban - something that India has always maintained.
The officials, it said, declined to identify the Taliban figures who were released citing the secrecy surrounding US monitoring of the ISI, but said the freed captives were high-ranking Taliban members the US would want in custody.
US officials, the Post said, think that 'Pakistan continues to pursue a hedging strategy in seeking to maintain relationships with an array of entities - including the US and Afghan governments, as well as insurgent networks - struggling to shape the outcome in Afghanistan, even as it aggressively battles the Pakistani branch of the Taliban.'
The ISI wants 'to be able to resort to the hard-power option of supporting groups that can take Kabul' if the US suddenly leaves, a US military adviser was cited as saying.
Pakistani intelligence officials told the Post in Islamabad the ISI was committed to dismantling insurgent groups and denied that any Taliban operatives had been released after being captured.
The daily said US officials concur that the collaboration between the CIA and the ISI has improved substantially, but say they see ongoing signs that some ISI operatives are providing sanctuary and other assistance to factions of the Taliban when their CIA counterparts are not around.
CIA officials, according to the Post, think that the ISI's connection to the Taliban is active. But 'it's not clear how high that goes or who knows about it,' a US counterterrorism official was quoted as saying. 'The Pakistanis did a sharp change of policy after 9/11, and it's not certain everybody got the memo - or read it if they did.'
Sensing the situation, VDC members have started keeping a close vigil in the Kalakot region. The VDC members have even started performing night duties in order to make the locals feel safe and secure.
The members feel that if they also start getting salaries for their work, they can perform their duties better.
'The cops can answer Maoist ambush if they are trained to climb trees with their weapons and retaliate,' a senior police official told IANS.
On Saturday, a crash course on firing AK-47 rifles and pistols was conducted for officers in-charge of 124 police stations situated in Maoist-infested areas.
'We were shocked to find a majority of them failed to shoot the target,' said a police official.
'We have issued directions to superintendents of police (SP) of all districts to arrange such firing courses,' Jharkhand Director General of Police Neyaz Ahmad told IANS.
Ahmad Friday called a meeting of officers in charge of Maoist-infested police stations and shared tips on how to tackle the rebels. The meeting was convened in the backdrop of the massacre of 76 security personnel in Dantewada district.
Poland mourns president, elite killed in crash
Poles were in deep mourning on Sunday after President Lech Kaczynski and many of the country's ruling elite were killed in a plane crash. The ageing Tupolev plane crashed in thick fog near Smolensk in western Russia on Saturday, killing all 97 people on board.
 |
| BOYS TO MEN: Youngsters who have been recruited as special police officers in Bhairamgarh police station, Chhattisgarh |
Ranga Baghel hasn't been following his textbooks for a while. Instead, he has been handling bows and arrows.
Four years ago, the 15-year-old villager from south Dantewada was picked up by a group of Maoists when he was returning from school. He hasn't gone back home since then. He attends classes conducted by Bal Sangam, a children's association run by Naxalites in Chhattisgarh.
"My job is to spy on every government or police car that passes by Konta," Baghel says, referring to a busy Dantewada block. "I also inform local Maoist leaders about meetings organised by politicians in nearby villages."
Idma Sodi is in the battle too — but on the other side. He was 15 when the police recruited him as a special police officer (SPO). Sodi was staying in a camp in Dornapal set up by the Salwa Judum — an anti-Maoist militia group supported by the government. "We were told by the police that at least one member of each family would have to join the SPO if we wanted to continue living in the camp. I had no option," says Sodi.
As Maoists and security forces battle each other — Tuesday's massacre of 75 security men by armed rebels is a grim reminder of the ongoing war — the children of Bastar find that they are caught in the crossfire. Both the warring factions are recruiting children, mostly used as spies to gather information or to pass messages.
Seetala Atra, 14, has been doing just that. He joined the Maoists after his village in Dantewada was burnt down in an alleged attack by the Salwa Judum three years ago, killing his parents and brother.
"I would never join the police or the Salwa Judum after what they did to us. Now that I have nothing more to lose, I might as well retaliate," Atra says.
Armed guerillas often use child warriors in their battles. Groups such as the Liberation Tigers of Tamil Eelam have been accused by human rights organisations of recruiting children. Closer home, in the forests of Chhattisgarh, more and more children are being enlisted by the Maoists.
"It is easy to convince a child to join the rebels," says a Dantewada social worker. "No one is suspicious of a child when he collects information while roaming around in a school uniform or herding cattle."
The villagers hold that the trend of recruiting children is on the rise. "Once the Maoists forced their way into our school and tried to interact with our children. But we resisted. So they abducted me for a night and have threatened to kill me if I don't give in to their demands," says Bima Ram Markam, the sarpanch of Nilavaram village in Sukma.
Coercion is the method for recruiting some SPOs as well. Though there are no official figures on the number of minor SPOs in Dantewada and Bijapur — the two worst affected districts in the Bastar belt — a visit to any of the barracks tells a horrifying story. Teenagers, in ragged shorts, shirts and boots, walk around with guns in their hands.
SPO Swayam Butta, 17, says he was forced to join the force after his father and three siblings were killed, allegedly by members of the Mudiya tribe — traditionally Naxal supporters — in Errabore, Dantewada, three years ago. "My mother and I fled to the Salwa Judum camp in the area. To survive in the camp, I had to join the police," says Butta.
But Butta believes he is now on a mission. "I want to take revenge on the Naxals who killed my family," says the frail boy, as his thin shoulders droop under the weight of an AK-47.
The SPOs are trained for five months to use rifles and heavy arms and are paid a monthly salary of Rs 2,150. But the youngsters stress that the battle against the Maoists is an unequal one. "We go out for operations carrying our .303 rifles while they come with hand grenades and AK-47s. Where is the comparison? So we fail in most operations," says Raju Ram Lekha, 17, posted in the Bhairamgarh police station.
The police, however, insist that there are no minors in the force. "It was only in the first year that a few minors were recruited since they insisted on joining the police for protection," says Rajendra Das, additional superintendent of police, Bijapur. "These men look younger than their age."
The Salwa Judum, on the other hand, has no qualms in talking about training the young. "We hold seminars to make children aware of the atrocities perpetrated by the Naxals. We tell them that they should not join them but join the police. It is easier to convince them at this young age," says Ajay Singh, a leader in the Bhairamgarh Salwa Judum camp.
The children, however, have a different story to relate. "The Judum leaders force us to go to the jungles and look for the enemy. We are being trained to use bows and arrows, and daggers and axes," says Kichhiya Shankar, 14, of Bhasaguda camp, Bijapur.
Some youngsters believe their future lies in obeying orders. "If I perform well as a Sangam member, I will be promoted to the Chetna Natya Manch (street theatre group). I am learning some revolutionary songs that talk about our rights to education and health," says Atra, who wants to join the Dalam (armed group of Maoists) in a few years.
But many would rather live in peace. Marwi Joga, 19, posted in the Dantewada police station since 2008, was once an active member of Bal Sangam. And he's had enough. "Though the ideologies of the two sides are different, the purpose they serve is the same. Neither of them is taking us anywhere," says Joga. "Does our life have to revolve around the barrel of a gun?"
Unfortunately for Joga, the battle has just intensified.
Some of the names have been changed
 |
| "The men who must actually lead these boys in operations do not want to train. Some senior officers who came last year left because they were meant to stay their tenure in tents. Ridiculous!" Basant Ponwar |
New Delhi, April 10: India's topmost counter-Naxalite instructor, Brig. Basant Ponwar, has slammed the government and security heads for ignoring the rudiment of training and said their "callous disregard" is responsible for "sending our boys straight to bloody murder".
Speaking to The Telegraph in the aftermath of Tuesday's massacre of 75 CRPF personnel near Sukma in south Bastar, Ponwar said: "The callous disregard of security bosses for proper training is sending the boys straight to bloody murder.
"This is the outcome of the arrogance of our security bosses, pure and simple, if these fellows had had the basic training they wouldn't have suffered such loss. People need to know whose grave error this is, why such outrage is happening."
Ponwar warned that the Sukma slaughter was a sign that the battle against Maoists was about to get uglier. "The terrible sacrifice of lives aside, I know the kind of weapons the Maoists have taken away, you can start a whole new insurgency with that kind of cache, I have been a soldier in the Northeast, I know what such a weapons grab can do for insurgent units, it is really alarming, somebody should wake up."
In his analysis of the carnage, the troopers were "totally under-prepared" to be sent into conflict zones. "It is evident they cannot site, much less recognise, an enemy harbour, they have no notion of who can take positions where, they were sleeping in a trap, that is what it was. But then, they have not been imparted such knowledge, not their fault."
Ponwar, who refuses to label himself retired — "I took this job the day I left the army" — heads the Counter Terrorism and Jungle Warfare College (CTJWC) in Kanker in central Chhattisgarh, but is irate that few use the facility he has created.
Spread across 300 acres of hilly jungle terrain, the CTJWC is India's only institution that runs courses on counter-Naxalite operations for police forces with support from the army which deputes instructors. Ponwar was invited to set up the college after retiring as the commandant of the army's Counter Insurgency and Jungle Warfare School in Vairangte, Mizoram.
None of the Chhattisgarh police units he has trained, Powar claims, has suffered casualties in combat, and five IPS officers who have been through his hands won the President's bravery medal.
"But the problem is the senior people. The men who must actually lead these boys in operations do not want to train. Some senior officers who came last year left because they were meant to stay their tenure in tents. Ridiculous! You cannot train for jungle guerrilla warfare if you want to stay in air-conditioning, my institution is about real terrain training, for jungle war you better get used to living in the jungle," he said.
"I have been pleading with anyone who listens, please come here and get trained before you confront the enemy, fighting Maoists in the jungles requires unique mental and physical qualities. But nobody listens, they are just happy to have our boys killed without giving them the skills to fight the battles they are sent into. I have long said that half-trained men fight half battles, and our boys are not even half trained, many more disasters are in the works."
Following the Lalgarh Maoist upsurge last year, Bengal sought help from Brig. Ponwar's school and was immediately offered it. "After a long delay, 30 fellows finally came, but all of them were sub-inspector and assistant sub-inspector-level, no officers. If the officers do not learn the ropes, who is to lead these boys?"
In the context of the revived debate over training of CRPF personnel, Brig. Ponwar said: "The CRPF do not train with me, although I will be happy to. They do not know how this battle needs to be fought, we at the warfare school do."
Asked why the CRPF had spurned his offers, Ponwar bluntly said: "Because they think they know everything. Pressure should come on them to learn. If we want our soldiers to go into battle, give them a fighting chance, don't feed them as fodder to the enemy."
Ponwar has issues with the mass-contact aspect of forces deployed in Chhattisgarh, too. "You cannot win a campaign if you don't have civilian support," he said. "And little is done to win people over. The forces behave like a feudal army, not a force that has come to the aid of people. That is the main reason why there is such poor intelligence and information available with the forces, they don't have a relationship with the people."
To him, winning public confidence must be the starting point. "Ask the widows if their pensions are coming, ask if water is available, ask if they need medicine, make friends and then you will get support in return. If you have lost the people, you have lost the battle to begin with."
http://www.telegraphindia.com/1100411/jsp/frontpage/story_12327472.jsp|
|
I have never been to Chhattisgarh or Lalgarh. I've never been on a Naxal safari, either the kind where you hunt them for trophies or the kind where you just wander around chatting with them and photographing them while admiring their lithe movements and beautiful stripes. I have never camped with the Greyhounds, the Bauxite Rangers or the Assam Rapists and nor, indeed, have I ever been embedded with the Red Tigers of Szechuanwada or the Revolutionary Older Children's War Group. I have, till now, sadly, completely missed out on partaking of the nutritious ant-marmalade (red ants, naturally) favoured by the fighting Comrades as well as the energy pellets supposedly procured from the Israeli Special Forces' Product Export Wing, the so-called 'Chidu-biscuits' that our 'Elite Forces' allegedly chew on before setting out to make a meal of Communist Insurrectionists.
Like many of us, it seems I have missed out on the haptic hypnosis of both sets of nightmarish fairy tales now being sold to us. Horror-Fairy-Story 1 tells us: there is a huge, beautiful forest in the centre of our country; it is full of poor, lovely-looking, innocent tribals who are being manipulated by camouflage-wearing rakshasas who would destroy everything our democracy stands for and replace it with a dictatorship run from Beijing. If it wasn't for these Naxa-shaitans everything would be just fine in the tribal anchals. Therefore, these rakshasas need to be decimated by any means necessary, even if it means raping or killing a few innocent tribals in order to protect them from their protectors.
Horror-Fairy-Story 2 tells us the opposite: there is a huge forest etc, full of poor tribals (again with beautiful smiles — those smiles stretch over all discourses) and there are huge corporations who are after the tribals' land and the mineral wealth that lurks under that land; these tribals' only hope of survival, their only chance of fending off the profit-hounds (and their puppet government and army) are the selfless comrades of the Revolutionary Vanguard who are leading them in logical and heroic battle; therefore all right-thinking/Left-leaning humanist people should completely support the comrades and, yes, turn a blind eye to the occasional 'excess' or 'mistake' such as summary executions and other types of murder and violence the Revolution might require from time to time
What's interesting is that while trying to put a cartoonish spin on both the competing plot-lines one has no choice but to include statements that are partly true. For instance, it is undeniable that the private sector is out to ravage the specially succulent parts of the tribal areas. For the mining barons, hydro-power-hydras and SEZ-fanatics the protection promised to the adivasis under the Fifth Schedule of the Constitution is a pesky obstacle, one which has to be ignored, circumvented or dismantled. The big seths have (and will again) ruthlessly get killed any serious opponent to their plans, even if these opponents follow strictly non-violent methods.
On the other hand, it is also true that the Neo-Naxals are bent upon imposing their ideal of Red Sharia Raj, which has nothing but contempt for all the gains the common citizen has clawed from our frayed, ramshackle contraption of a democracy over 60 years. It is undeniable that, except for a water-harvesting project or two, these Comrade-wallahs pay unwavering obeisance to a model of revolution screwed together by Mao Zedong and friends nearly 70 years ago, in the shadow of a massive and brutal Japanese invasion of a feudal China that was already falling apart.
Yes, both fairy stories have elements of 'truth' in their components. But they are bloody bedtime tales being spun mainly for adults who want to revert to being small children. Reality is a ripe and grown-up mess and it's not going to go away while people keep sucking on either of these lullaby-lollipops. The facts are un-sexy and mostly require hard work to understand. And neither the Establishment nor the Maoists nor most of the Indian media like to get their hands too dirty with them.
The tribal population of India is huge, as is the land in which the adivasis are rooted. This population is made up of the poorest and most neglected sections of our so-called great, shining Indian society. The mining projects and other real or intended industrial depredations actually affect a small fraction of the overall tribal population of India. The threat of 'developmental' rape is large, horrible and dismaying but neverthless it affects only pockets of adivasi land and population and it's wrong to think that this is the main problem for the poorest of our poor.
Underneath the now speeded up battle between the Naxals and the Chidambdits is a huge, slow, wrestling match going on between different shards and spikes of the 'State' and 'Capital' and the different strained and fractured bones, sinews and musculature of the tribals and the non-tribals working with them. The spectacle of the kung fu battle can perhaps be replicated on a Playstation game: "so many CRPF dead", "such and such Maoist body-counts", "such and such Government Official held hostage", "such and such Naxal leader arrested at such and such bus station" etc, etc, but the larger struggle resists being modelled by any button-driven game-designer. By and large, the bigger fight is not a shoot-'em-up entertainment involving AK-47s, INSAS rifles, IEDs and laser-trackers.
The most spectacular 'match' in this non-game involves something called the Forest Rights Act of 2006, which was the result of prolonged peaceful mobilization by adivasi groups across the country and which secured for the poorest and most vulnerable people a basic resource crucial for their survival. The most tragic and dramatic event in this struggle over adivasi lands and livelihoods involves the cold-blooded murder of one Shankar Guha Niyogi, leader of the inspiring Chhattisgarh Mukti Morcha, but a killing which didn't result in any Mafia-like retaliation on the industrialists who ordered his killing. And the most banal action in this battle involves the Maoists coming and telling an activist to shove off from their area because he was 'watering down' their case against the State by showing that non-violent, slow, small leg-work was actually yielding some results. When he hesitated, the Naxals killed two of his workers. The activist upped sticks and left.
The only adivasi area I've visited recently has been in the districts of Alirajpur and Jhabua, in the north-western corner of Madhya Pradesh, and to the extent that I could observe, there seemed to be no mineral treasure-troves underground, no big multinational corporations, no paramilitary and no Maoists present in this obscenely poor area. However, like much of the rest of adivasi India, this region too has witnessed protracted struggles to gain rights to the forest and to get fair treatment from the State. Through decades of militant yet non-violent collective action, the adivasis here have managed to wrest these rights and secure the resources essential for their survival. This is not an isolated instance. There are hundreds of such groups, labouring in relative obscurity, fighting everyday battles, losing many but winning some.
The point is that these adivasis have chosen to defend their land and to strive for dignity without recourse to arms. They believe in the wisdom of their choice and the worth of their long-term 'war', a struggle that calls upon the State to live up to its rhetoric of development for all. By ignoring these initiatives, we not only dishonour the people who have staked their lives on them, we also risk delivering them into the hands of the Maoists. As Marx said, people "make history under conditions not of their choosing". The Maoists are one such route to making history but they are far from being the only one. In a sense, both the Maoist CEOs such as Kishanji, and Comrade Chidambaram have internalized Henry Ford's famous axiom. Both would have us believe that the choice is simple: the tribals can have any kind of People's War they want as long as it's Maoist and involves AK-47s. There is a logical 'assembly-line' to this kind of war and it's both relatively easy to construct and destroy.
US President Barack Obama demands mine blast action
 President Obama said steps should be taken to prevent similar accidents |
US President Barack Obama has called for an investigation into a mining disaster in West Virginia that killed 29 people.
Mr Obama said the cause of the blast at the Upper Big Branch mine should be determined, to prevent similar accidents from occurring.
The bodies of four missing workers were found on Saturday, ending hopes that any missing miners had survived.
The disaster was the deadliest US coal mining accident in 40 years.
The cause of the blast has not yet been confirmed but officials believe it could be related to high levels of methane in the mine.
Mr Obama called for federal mine safety investigators to look into the cause of the accident.
"We cannot bring back the men we lost," he said in a statement.
"What we can do, in their memory, is thoroughly investigate this tragedy and demand accountability."
Rescue workers are recovering the last bodies from the mine and funerals of the victims have begun to take place.
It is the worst coal mine disaster in the US since 38 people were killed in a Kentucky mine in 1970.
News feedsMOST POPULAR STORIES NOW
- SHARED
- READ
- WATCHED/LISTENED
- Behold, Newstralia
- Poland grieves for dead president
- Spain MP photo used for Bin Laden
- Blood groups 'can be converted'
- Freeman's Pasture a really wild site
- Poland grieves for dead president
- Behold, Newstralia
- Bangkok death toll climbs to 20
- Ship crew charged over reef route
- Looking beyond Poland's 'unprecedented disaster'
- Why colour still defines everything in South Africa
- Kyrgyzstan 'will honour US deal'
- Review due on organ donor blunder
- Italians held over Afghan 'plot'
- Senior Polish figures killed in plane crash
India 'not planning' to deploy army after Maoist attack
India says it has no plans to deploy troops to fight Maoists, a day after rebels killed 76 paramilitary police.
Home Minister P Chidambaram said central paramilitary and state police forces could deal with the threat, but did not rule out using the air force.
Mr Chidambaram urged calm and patience on a visit to central Chhattisgarh state, where the attacks took place.
Correspondents say it is the worst attack on security forces by the rebels since their revolt began.
|  To our offer of talks, they have replied by savage andbrutal acts of violence  P Chidambaram, Indian Home Minister |
An air force transport aircraft has been sent to Chhattisgarh to bring back the bodies of the soldiers killed in the attacks.
State police said the death toll had risen to 76 with the death of another member of the security forces.
Thousands of people have died during the 20-year fight for communist rule.
The Maoists say they are fighting for the rights of the rural poor who they say have been neglected by governments for decades.
'Long struggle'
Mr Chidambaram laid a wreath near coffins of security force personnel and promised that the offensive against the Maoists would continue.
 Mr Chidambaram (right) visited injured troops in hospital |
"We must remain calm and hold our nerves to rid India of this threat," he said after meeting relatives of some of the dead soldiers.
"You cannot expect instant success. This is a long, drawn-out struggle. It will take two to three years, perhaps more [to defeat the rebels]."
He said the Maoists presented the "gravest threat to internal security".
"We are paying the price for the neglect of the last 10-12 years," the home minister said. During that time the Maoist movement has grown in strength in large rural areas in eastern and central India.
But he said they would not be allowed to succeed in their long-term aim of overthrowing the government.
India's main opposition party, the BJP, has said there should now be an all-out offensive against the rebels and the media are full of talk of war against the insurgency.
The BBC's Chris Morris in Delhi says the government has always insisted this is not just a security issue.
Our correspondent says it bitterly condemns Maoist violence, but it acknowledges that chronic poverty, and lack of opportunity and development, are significant factors which have given the insurgency added impetus.
'Totally outnumbered'
Police said the paramilitary troops on patrol in remote jungle in Dantewada district were ambushed by hundreds of heavily-armed insurgents.
|   |
Rescue teams were then ambushed in attacks using landmines and gunfire.
An armoured vehicle was first bombed before rebels on a hillock opened fire, police said.
As security personnel took cover, they found the rebels had booby trapped trees with explosives. Troops in the open were gunned down by the rebels.
"We were totally outnumbered. And they [the rebels] had far too much ammunition," Pramod Kumar, one of seven soldiers who survived the ambush, told The Times of India newspaper.
"How could just 80 of us fight more than 1,000 of them? We got no time and no opportunity to retaliate."
The Maoists have stepped up attacks in recent weeks in response to a big government offensive along what is known as the "red corridor", a broad swathe of territory in rural eastern and central India where the Maoist rebellion has been gathering strength.
Nearly 50,000 federal paramilitary troops and tens of thousands of policemen are taking part in the operation in several states.
Mr Chidambaram has said troops will intensify the offensive if the rebels do not renounce violence and enter peace talks.
The rebels want four senior leaders freed from jail and the offensive halted before any talks.
News feedsMOST POPULAR STORIES NOW
- SHARED
- READ
- WATCHED/LISTENED
- Behold, Newstralia
- Poland grieves for dead president
- Spain MP photo used for Bin Laden
- Blood groups 'can be converted'
- Freeman's Pasture a really wild site
- Poland grieves for dead president
- Behold, Newstralia
- Bangkok death toll climbs to 20
- Ship crew charged over reef route
- Kyrgyzstan 'will honour US deal'
- Why colour still defines everything in South Africa
- Looking beyond Poland's 'unprecedented disaster'
- Review due on organ donor blunder
- Italians held over Afghan 'plot'
- The Turin Shroud's enduring mystery
Sun, Apr 11 09:58 AM
Enlarge Photo Birds sit atop telecommunication towers in Hyderabad May 25, 2009. REUTERS/Krishnendu Halde/Files Bids rose on the second day of India's multi-billion dollar third-generation (3G) auction, with one provisional winning bid for national cover touching 40.85 billion rupees ($922 million), or about a 17 percent premium to the base price, government data showed.
A total of 10 rounds of bidding had been completed by Saturday, India's Department of Telecommunications said on its website, without disclosing which company had bid how much.
The widely-watched auction started on Friday and the multiple-round bidding process is expected to take about two weeks to complete, officials have said.
On the first day, bids were at about a 12 percent premium to the base price of 35 billion rupees for all-India spectrum.
There is no bidding on Sunday. The auction resumes on Monday.
(Reporting by Devidutta Tripathy)
Tuesday, May 13, 2008
THE ACCUMULATION PROCESS IN THE PERIOD OF GLOBALIZATION | PRAGOTI (delivered on 08 May 2008, in Pune)
I can not describe what a great honour it is for a person of my generation to be asked to give a lecture in memory of Professor D.D.Kosambi who was a veritable legend for us. His genius enabled him to make pioneering contributions in a whole range of diverse fields from mathematical statistics to numismatics. But his work that touched us was in the field of Indian history, and it was so breathtakingly original, so unconventional because of its use of literary sources, and, above all, so powerfully persuasive in its totality, that I do not exaggerate when I say that reading The Culture and Civilization of Ancient India made us understand India as never before. It opened up for us, to use Althusser's words, a whole new continent which had remained undiscovered till then.http://ddkosambi.blogspot.com/2008/05/prabhat-patnaik-dd-kosambi-lecture.html
In preparing this lecture my motivation has been to develop a theme, which, whether right or wrong, would have caught Professor Kosambi's fancy. Accordingly I shall devote this lecture to what everyone is concerned about these days, namely the world food crisis. And on this subject, fortunately, much work has already been done by my colleague Professor Utsa Patnaik which I shall be able to draw on .
I
Professor Paul Krugman of M.I.T. whose column appears in several Indian newspapers, had compared, in his column of April 22, the present world-wide excess demand for a number of primary commodities, which inter alia underlies the current inflation, with a similar state of excess demand for commodities that had arisen in the early seventies. He argued that while the earlier state of excess demand was overcome through supply adjustment, such as new oil-strikes in the North Sea and the Gulf of Mexico, and the entry of new land into cultivation, the same might not happen this time around, because the scope for supply adjustment was now much more restricted.
Professor Krugman however is not correct. The resource crisis of 1972-75 was not universally overcome through supply adjustment. In the case of the most vital primary commodity, namely foodgrains, it was overcome, not through any appreciable stepping up of supplies, but through a severe compression of demand, and the latter happened through an income deflation imposed over much of the world. The regime of "globalization" inter alia was a means of enforcing such an income deflation.
It is often not recognized that income deflation plays a role exactly equivalent to that of inflation in compressing demand. Of course the term "inflation" itself is an ambiguous one. The notion of inflation in current orthodox economics refers to a state of affairs where all prices, including money wages, are rising pari passu, so that there is no worsening of the condition of the working masses per se and the only sufferers are those with cash balances, most of whom are likely to be rich. But inflation as we know it in real life, especially in a country like ours, where the bulk of the workers do not have wages indexed to prices, is one that hurts the working masses. Keynes (1930) had called this latter kind of inflation "profit inflation", and had recognized it as a phenomenon of great importance under capitalism. In situations where supply could not be rapidly augmented, it overcame excess demand by raising prices relative to money wages, and thereby bringing about a shift of income distribution from wages to profits (whence the term "profit inflation"), which, because the capitalists tended to save more out of income than workers, had the effect of lowering overall demand.
Now, this demand compressing effect of a profit inflation can also be achieved through an income deflation imposed on the working masses. Starting let us say from a situation where the money wage rate is 100 and the price is 100, a reduction in the wage rate to 50 with price remaining the same has exactly the same effect of lowering workers' demand as a rise in price to 200 with the money wage rate remaining at the original level.
What is more, even though income deflation and profit inflation have exactly identical effects by way of compressing the demand of the working masses, finance capital prefers the former to the latter since the latter entails a decline in the real value (vis a vis the world of commodities) of financial assets, and may in extreme situations make wealth-holders turn to holding commodities in lieu of financial assets altogether. Income deflation therefore, even while keeping excess demand in check, and yet increasing the share of profits earned in the organized sector of the world economy, exactly as a profit inflation would have done, has the added "advantage" of keeping finance capital happy! Income deflation for the working population of the world, which includes, apart from the proletariat proper, the peasantry, the petty producers, the agricultural workers, and other unorganized sector workers, becomes a pervasive phenomenon in the era of globalization, characterized as it is by the rise to hegemony of a new kind of international finance capital based on a process of globalization of finance .
The fact that the inflation of the early-seventies arising out of excess demand for primary commodities disappeared in later years, was because it was substituted by an income deflation on the working people over large tracts of the world, and not because of any significant supply augmentation of non-oil primary commodities, as Professor Krugman believes.
According to the FAO, the total world cereal output in the triennium 1979-81 was around 1573 million tonnes for a population (for the mid-year of the triennium,1980) of 4435 million. For the triennium 1999-01 the cereal output had increased to around 2084 million tonnes for a population (for the mid-year of the triennium, 2000) of 6071 million. This represents a decline in world per capita cereal output from 355 kilogrammes in 1980 to 343 kilogrammes in 2000. Given the fact that during this period per capita income in the world has increased significantly, and given the fact that the income elasticity of demand for cereals (consumed both directly and indirectly via processed food and animal feed) is markedly positive (even if less than one), a stagnant or declining per capita cereal output should have spelled massive shortages leading to a severe inflation in cereal prices. Such an inflation, since it would have occurred in a situation where the money wage rates in the manufacturing sectors around the world, to which manufactured goods' prices are linked, were not increasing pari passu with cereal prices, would have meant a shift in the terms of trade between cereals and manufactured goods in favour of the former.
But this did not happen. On the contrary, cereal prices fell relative to manufactured goods prices by as much as 46 percent over these two decades! This suggests that the decline in per capita cereal output, in a situation of rising world per capita income, did not generate any specific inflationary pressures on cereal prices. The reason it did not is the income deflation imposed over much of the world. It is this, rather than any supply increase as Professor Krugman suggests, that explains the absence of any specific trend inflationary pressures in cereal prices (i.e. ignoring fluctuations) until recently. And this income deflation was imposed over much of the world via the phenomenon of globalization.
II
Income deflation is not a single process but the outcome of a number of different processes, which deflate not just the money wage rate as in the earlier numerical example, but more importantly the level of employment and income, especially in the non-capitalist, petty production sectors. It is income deflation in this comprehensive sense that eliminates the excess demand that would have arisen in its absence, given the fact of sluggish increases in supplies.
There are at least three processes contributing to the phenomenon of income deflation, in this comprehensive sense, over much of the world in the era of globalization. The first is the relative reduction in the scale of government expenditure. Globalization, as mentioned earlier, consists above all in the globalization of finance. Huge amounts of finance capital are moving around the world at a dizzying pace in the quest for speculative gains, so much so that even a fairly conventional economist like James Tobin had to ask for a tax on currency transactions in order to slow down this dizzying pace of movement. Because economies caught in this vortex of globalized finance can be easily destabilized through sudden flights of finance capital, retaining the "confidence of the investors" becomes a matter of paramount importance for every economy, for which their respective States have to show absolute respect to the caprices of globalized finance.
Finance capital in all its incarnations has always been opposed to an interventionist State (except when the interventionism is exclusively in its own favour). An essential element of this opposition has been its preference for "sound finance" ( i.e. for States always balancing their budgets, or at the most having a small pre-specified fiscal deficit as a proportion of the GDP). The argument advanced in favour of this preference has always been vacuous, and was pilloried by Professor Joan Robinson of Cambridge as the "humbug of finance" (Robinson 1962). The preference nonetheless has always been there, and has become binding in the era of globalized finance, when States willy-nilly are forced to enact "Fiscal Responsibility" legislation that limits the size of the fiscal deficit relative to GDP. At the same time, this move towards "sound finance" is accompanied by a reduction in the tax-GDP ratio, owing to tariff reduction and to steps taken by States competing against one another to entice multinational capital to set up production plants in their respective countries.
The net result of both these measures is a restriction on the size of government expenditure, especially welfare expenditure, transfer payments to the poor, public investment expenditure, and development expenditure in rural areas. Since these items of expenditure put purchasing power in the hands of the people, especially in rural areas, the impact of their curtailment, exaggerated by the multiplier effects which are also to a significant extent felt in the local (rural) economy, is to curtail employment and impose an income deflation on the rural working population.
The second process is the destruction of domestic productive activities under the impact of global competition, from which they cannot be protected as they used to be in the dirigiste period, because of trade liberalization that is an essential component of the neo-liberal policies accompanying globalization. The extent of such destruction gets magnified to the extent that the country becomes a favourite destination for finance, and the inflow of speculative capital pushes up the exchange rate.
Even when there is no upward movement of the exchange rate and not even any destruction of domestic activity through the inflow of imports, the desire on the part of the getting-rich-quick elite for metropolitan goods and life-styles, which are necessarily less employment-intensive than the locally available traditional goods catering to traditional life-styles, results in the domestic production of the former at the expense of the latter, and hence to a process of internal "de-industrialization" which entails a net- unemployment-engendering structural change. This too acts as a measure of income deflation.
The third process through which income deflation is effected is a secular shift in the terms of trade themselves against the petty producers of primary commodities, and in particular the peasantry. This may appear paradoxical at first sight. We had argued earlier that the decline in the terms of trade for cereals between 1980 and 2000 was a consequence of income deflation; to argue that income deflation is a consequence of the terms of trade shift seems to contradict the earlier argument and reverse the causation. There is however no contradiction here. A distinction needs to be drawn between an autonomous shift in the terms of trade, which is brought about, say, through pricing policy in the capitalist manufacturing sector, and an induced shift in the terms of trade that arises as a result of the autonomous shift through changes in the state of demand and supply for the primary commodity in question. An autonomous shift in the terms of trade (through, say, an increase, compared to the initial situation, in the administered price of manufactured goods, by monopoly capitalist producers) is like a tax, much the way that Yevgeny Preobrazhensky (1926) had visualized it. The imposition of such a tax may force larger primary commodity supplies from the petty producers which affects the prices they get, and hence a further adverse movement in their terms of trade (provided that manufactured goods prices are not lowered after their initial autonomous increase, because of the lowering of primary commodity prices, i.e. that they are subject to a "ratchet effect"). A terms of trade shift therefore both causes and is caused by an income deflation of petty producers.
There is also an additional mechanism. Even when there is no shift in the terms of trade against particular commodities, there is nonetheless a decline in the terms of trade obtained by the producers of those commodities because of the increasing hold of a few giant corporations in the marketing of those commodities. This too has the effect, via a shift in income distribution from the lower-rung petty producers to the higher-rung marketing MNCs, of curtailing the consumption demand of the former, and hence the level of world aggregate demand, which in turn curtails inflationary pressures on primary commodities themselves.
Globalization in other words unleashes massive processes of income deflation which, while playing exactly the same role as profit-inflation in curbing excess demand pressures, keep commodity prices in check. And this is what we have been witnessing in the entire interregnum between the inflation of the early seventies and the recent revival of inflation.
III
The question arises: why is the increase in the demand for primary commodities not met through an increase in supply? Why is it that demand itself has to be compressed, either through a profit-inflation or through an income deflation imposed on the working population? The answer lies inter alia in the fact that, for agricultural primary commodities at any rate, supply increase requires the use of additional land. At a time when capitalism was extending into the "new world", the local inhabitants consisting of Amerindians could be driven off the land, and migrants from the metropolis could settle on this land and undertake production to satisfy the requirements of capital. Supply increases in other words could and did occur to serve the requirements of the capitalist world economy, though this process was also accompanied by a parallel process of an income deflation imposed on the pre-capitalist producers of the tropical colonies, through a combination of taxation and import-induced de-industrialization, to compress their demand and squeeze out resources for world capitalism.
With the closing of the "frontier" in the "new world", which Keynes (1919) saw as a turning point in the history of capitalism, further increase in supplies of agricultural commodities required essentially the adoption of land-augmenting technological progress in densely-populated areas of settled peasant agriculture. Capital did not directly have access to land in these areas; and it could not drive the vast peasant population off the land by force as it had done in the temperate regions of white settlement. If supplies had to be augmented, then the requisite land-augmenting technological progress had to be introduced within the framework of peasant agriculture.
This did happen in the post-decolonization period through the dirigiste regimes of the third world adopting a number of measures to promote multiple cropping and improve yields. These measures even culminated in the ushering in of the so-called "Green Revolution" in countries like India. But with the dirigiste regimes running into crisis, especially a fiscal crisis, and with their supersession by the neo-liberal regimes of the era of globalization, the scope for such supply increases dried up.
It is not in the nature of capitalism to develop peasant agriculture. The fact that peasant agriculture got a boost during the dirigiste period was precisely because dirigisme, a natural sequel to the national liberation struggles of the third world, did not represent capitalism in its spontaneous development, did not express the immanent tendencies of capitalism, but stood for an intervention in its spontaneity "in the interests of the nation", though within clearly bourgeois bounds. Dirigisme, like its counterpart Keynesianism in the advanced capitalist countries, could only be transitional. As the special conjuncture producing it passed, dirigisme gave way to neo-liberalism. The immanent tendencies of capitalism asserted themselves against the earlier regime of interventionism, and transformed the nature of State intervention from one that invoked a notion of "national interest", not identical with the interest of finance capital, into one that saw the two sets of interest as being identical.
With this came a basic shift in the fate of peasant agriculture. The immanent tendency of capitalism is not to promote peasant agriculture; as Lenin had said in his Imperialism (2000, 89), if capitalism could develop agriculture "which today everywhere is lagging terribly behind industry", then it would not be capitalism. Its immanent tendency on the contrary is to dispossess peasants of their land and other means of production, which in areas of settled peasant agriculture can only occur over a period of time. And the squeeze employed on the peasantry by this immanent tendency of capitalism in the current era is itself ipso facto an act of income deflation. It is an income deflation imposed on the peasantry and is covered within our general concept, namely the imposition of an income deflation upon the working population under globalization.
The income deflation on the working population therefore, and hence the compression of the latter's demand as a means of squeezing out agricultural primary commodities (as opposed to increasing the supplies of these commodities to meet the growing demand that would arise in the absence of such compression) is part of the immanent tendency of capitalism, which also manifests itself in the current epoch.
IV
This distinction between supply augmentation and demand compression of the working population, as the two alternative means of overcoming the tendency towards ex ante excess demand for primary commodities that arises in the process of expanded reproduction of capital can be expressed somewhat differently. Any particular bloc of capital can grow, conceptually, in two ways. One is by reinvesting its surplus value and thereby growing bigger; the other is by annexing other blocs of capital, or by taking over common property, or the property of non-capitalist petty producers, or that of the State. The first of these constitutes "accumulation through expansion"; the second constitutes "accumulation through encroachment". These terms which we have defined with respect to one particular bloc can also be used for larger blocs, and even for the entire bloc of capital in the world economy. In each case the pictures corresponding to the two processes can be clearly visualized .
The argument of the preceding section can then be expressed as follows: taking the entire bloc of capital in the world economy, its accumulation through expansion necessarily has to be complemented by a process of accumulation through encroachment. As capital accumulates in the world economy, it requires at the base price certain material elements of means of production and means of subsistence. The supply of these elements however does not grow to satisfy at the base prices the requirements of capital accumulation. Since any process of price increase above the base price is against the interests of finance capital, the imbalance between the increases in demand and supply at the base price, is overcome by compressing demand not only of the workers directly employed by this bloc of capital, through curbs on their money wages, but above all by forcibly compressing the demand existing outside the domain of this capital, so that the overall supply limitations do not adversely affect the requirements of capital. Such compression, which means the snatching of resources for the capitalist sector from the petty production sector outside of it, constitutes accumulation through encroachment.
Of course if the petty production sector, in particular peasant agriculture, could grow in tandem with the capitalist sector, i.e. if there could be a balance between the growth of the different sectors, then the need for accumulation through encroachment would not arise. But the very scope of accumulation through encroachment forecloses this possibility. The capitalist sector sells its goods there at the expense of the traditional producers, and this is enough to compress demand for the primary commodities and release them for the capitalist sector. The capitalist sector jacks up its price owing to monopoly pricing; and this is enough to release resources for it through a compression of demand of petty producers. In other words, accumulation through encroachment is not the outcome of some conspiracy; it is simply the outcome of relations between two sectors of unequal strength; and its being there forecloses the possibility of supply augmentation (the dirigiste phase being an exception because of its historical context).
An example can make the point clear. The capitalist sector can meet, say, its raw cotton requirements in any one of two ways: if the peasant agricultural sector increases its supply to match the requirement of the capitalist sector; or if some traditional cotton manufacturers are thrown out of their occupation and the raw cotton they were using becomes available to the capitalist sector. Since it is in the nature of capitalism to capture markets from pre-capitalist producers, its "normal" functioning will entail its meeting its raw cotton needs through the second route. And this very fact will foreclose the first route, which, in any case, it is not in the nature of capitalism to follow. Accumulation through encroachment therefore is an intrinsic property of capitalism, which is based not on balanced but on uneven development of the different segments of the world economy.
This feature of capitalism comes into particular prominence in the contemporary epoch because of the closing of the "frontier", so that even such supply adjustments as were possible in the period of availability of "empty spaces" (which were not actually empty since they were peopled by Ameridians and other local inhabitants) are no longer possible now. The period of "globalization" therefore has two specific features: first it characterizes a world where supply adjustments, at least of agricultural primary commodities, have limited scope, and hence accumulation through encroachment, entailing compression of demand of the working people all over the world, must come to the fore. Secondly, unlike in the colonial period where the colonial State enforced both de-industrialization and taxation which were major instruments for compressing demand, the imposition of neo-liberal policies does this compression even in the absence of any political domination of the colonies, i.e. even in a situation of political decolonization. We now have accumulation through encroachment without colonialism.
The idea that capital accumulation required encroachments being made on the pre-capitalist sector was first put forward by Rosa Luxemburg (1963), though the precise details of her argument, and the conclusions she drew from it were quite different from what has been discussed above. In particular she saw the capitalist sector engulfing and replacing the pre-capitalist sector and, hence, the world moving towards a limit point of exclusive presence of the capitalist sector alone, at which point capital accumulation will become impossible. But the world does not move towards the exclusive sway of capitalism. She was right in seeing the encroachments on the pre-capitalist sector, essential for the functioning of capitalism, as also compounding the problems of capitalism, but the manner of that compounding is different from what she had visualized. The present inflationary crisis is a manifestation of this compounding.
V
The inflationary crisis has been variously explained. A fairly common explanation highlights speculative behaviour. Speculators, it is argued, are moving to commodities, because of the financial crisis which has made financial assets unattractive, and also because of the weakening of the dollar, which has denied the wealth holders in the capitalist world for the present, a stable medium of holding wealth. While there is much in this argument (though Professor Krugman questions it on the grounds that there is no evidence of increased inventory holdings), it cannot be a stand-alone explanation of the inflationary crisis. Wealth-holders will not move to commodities, which have high carrying costs, unless they already have inflationary expectations. And for such expectations to arise, there must already be a tightness in the commodity markets. Speculation can act only on top of a basic situation of shortage, which is why the speculation argument can only point to a compounding factor, not to the basic explanation for the inflationary situation.
Three basic arguments have been advanced. One is by the US administration to the effect that in rapidly-growing developing economies like China and India, a variation in the dietary pattern is taking place, entailing an increased demand for commodities like meat, the production of which requires more foodgrains in the form of animal feed. This argument is so totally vacuous that one is even amazed that it is at all advanced. No doubt the rich in both these countries are diversifying their diet and are absorbing, directly and indirectly, more foodgrains per capita. But if we take the per capita foodgrain absorption for the population as a whole, both directly and indirectly (via processed foods, animal feed etc.), then we find that in India there is a decline compared to the late eighties (U.Patnaik 2007a). Even in the case of China if we take the per capita absorption of cereals for food and feed (the definition of foodgrains is different in China compared to India), then there is a steady and sharp decline between 1996 and 2003, which gets reversed thereafter, but the level in 2005 is still lower than in 1996 . In fact in the case of both these countries this phenomenon of non-increasing foodgrain absorption per capita, even when both direct and indirect absorption are taken into account, has been adduced by many as evidence that the high growth they have been experiencing has been accompanied not by any reduction in poverty, but possibly even by an increase.
Since the rate of growth of population in both these economies has been slowing down, the decline in the per capita foodgrain absorption entails a decline in the rate of growth in the overall demand for foodgrains. In the face of such a decline, it follows that if excess demand pressures have arisen in the world foodgrains economy, then the reason must lie in an even more rapid decline in the rate of growth of the supply of foodgrains. Hence it is not from the side of Indian or Chinese demand but from the side of the foodgrain supply in the world that we have to explain the current food scarcity in the world economy.
The second basic argument that has been advanced for the inflation in food prices points to the diversion of foodgrains for the production of bio-fuels. This is no doubt a perfectly valid argument, and the Bush administration having encouraged such diversion, is naturally keen to shift the blame elsewhere, which is why it is pointing, quite baselessly, to higher Chinese and Indian demand. But even this diversion for bio-fuel, important though it is, has operated on top of a situation of sluggish growth in foodgrains output. We referred earlier to the fact that the growth in foodgrain output during the two decades of the eighties and the nineties, had not kept pace with the world population growth. In the period after 2000 this has become even more pronounced. During the 1980-2000 period, nearly half of the increase in foodgrain output of the world occurred in India and China, which together, however, account for only over a quarter of the actual output. In other words the world output growth was sustained by these two countries over those two decades. But in this century, in both these countries there has been a virtual stagnation in foodgrain output, and hence a decline in per capita output . (In both countries this began in the nineties itself and things have only become worse this century). It is this stagnation which provides the basic context for the shortage; the diversion to bio-fuels only worsens things.
The third basic argument can be said to provide an explanation for this shortage, and this lies in the fact that resources on the planet are now running short compared to "mankind's" requirements. This argument in other words provides a nature-based as opposed to a society-based explanation for the shortage. And therein lies its limitation. While no doubt virgin land for cultivation can no longer be made available as easily as it could have been done in an earlier epoch, to say that "mankind" has in some sense reached the limits of agricultural production is a gross exaggeration. The decline in inflation in the period after the early seventies was not because of any new land coming under cultivation; it was because of income deflation. And such growth in output as occurred was owing to the adoption of land-augmenting technological progress in countries like India and China. The technological scope for such progress is far from over. The real problem is that the agency through which such progress could be introduced, namely the peasantry, is, because of this very income deflation, no longer in a position to do so. In fact, income deflation has taken its toll on the peasantry to a point where even simple reproduction of the peasant economy is no longer possible in countries like India, as is evident from the mass suicides of the peasants.
We have so far seen income deflation as a mechanism purely of demand compression. While it does compress demand immediately, it also has a long run effect on supply. As it undermines the viability of the peasantry, simple reproduction is no longer possible and supplies drop. The impossibility of simple reproduction of the peasant economy of course is the means through which the peasantry gets dispossessed of land and becomes destitute; it is precisely what capital wants and enforces. It represents nothing more than the march of capital . But it is this march of capital that is creating a crisis for mankind. If the march of capital had brought misery to mankind in the form of world wars in an earlier epoch, it is threatening to bring misery to mankind in the form of frood shortage and starvation in the current epoch. What we are seeing today is not some kind of a natural limit being reached by mankind, but the limit to which capitalism has dragged mankind. This limit can be transcended, but only when the social system underlying it is transcended.
VI
The tendency of capitalism as a social system is to dispossess the vast mass of the peasantry. The alternative social system that a transcendence of capitalism must bring about should be one that defends and promotes the peasantry instead of making it destitute. This does not necessarily mean a promotion of petty production and individual peasant farming. Collective and co-operative forms of operation, and even ownership, voluntarily entered into by the peasantry, can transform and modernize peasant agriculture, without dispossession and destitution of the peasantry. The alternative social system therefore does not have to be one based on petty production, but it must be one that ensures a balanced development of different sectors through a changing but non-exploitative relationship between different classes, and correspondingly changing forms of property relations and of production organization. The core of the system has to be social ownership of the modern means of production, for that alone, by overcoming the "spontaneity" of capitalism, enables society to consciously fashion its own destiny.
The social system that the transcendence of capitalism must bring about in other words can only be socialism, not necessarily in the form it had taken in the past (or is taking today in China), but not too far perhaps from the form which Lenin had originally visualized at the time of the Revolution, when he had set great store by the schmytchka, or the worker-peasant alliance, as forming the bedrock of socialism. At that time mankind had been faced with a choice between the barbarism of war and the alternative of socialism. Today the choice that is emerging before mankind is between mass hunger, destitution and starvation on the one side and the alternative of socialism. When a vast segment of the population consisting of petty producers cannot even carry out simple reproduction, and when this fact in turn jeopardizes the subsistence of other segments of the working population, then clearly the social system which causes this has run its historical course. Between these two alternatives before us, there can scarcely be any doubt over what the choice of D.D.Kosambi, the most outstanding intellectual figure of post-Independence India, would have been.
Prabhat Patnaik
D.D.Kosambi memorial lecture delivered by Prof. Prabhat Patnaik on 8th May 2008 at Pune
REFERENCES
Ghosh J. and Chanrasekhar C.P. (2003) Work and Well-Being in the Age of Finance, Tulika Books, Delhi.
Keynes J.M. (1919) Economic Consequences of the Peace, Macmillan, London.
Keynes J.M. (1930) A Treatise on Money, 2 Volumes, Macmillan, London.
Lenin (2000) Imperialism The Highest Stage of Capitalism, Leftword Books, Delhi.
Luxemburg R. (1963) The Accumulation of Capital, Routledge Paperbacks, London.
Patnaik P. (2000) "Introduction" to Lenin (2000).
Patnaik P. (2005) "The Economics of the New Phase of Imperialism", www.macroscan.com
Patnaik U. (1999) "Export-oriented Agriculture and Food Security in Developing Countries and in India" republished in her The Long Transition, Tulika Books, Delhi.
Patnaik U. (2003) "On the Inverse Relation between Primary exports and Food Absorption in Developing Countries under Liberalized Trade regimes" in Jayati Ghosh and C.P. Chandrasekhar (2003).
Patnaik U. (2007) "The Republic of Hunger" in The Republic of Hunger and Other Essays, Three Essays Delhi.
Patnaik U. (2007a) "Neo-Liberalism and Rural Poverty in India" in Economic and Political Weekly, July 28.
Prebrazhensky Y. (1926), The New Economics.
Robinson J. (1962) Economic Philosophy, C.A.Watts, London.
Posts
No comments:
Post a Comment