The New Threat on the Foreign Exchange Front

ON September 23, the value of the rupee vis-a-vis the dollar fell to a new low: it crossed 81 to a dollar after some weeks of relative stability when it hovered between 79 and 80. And it fell despite the Reserve Bank’s running down of foreign exchange reserves in a bid to hold up its value. In fact foreign exchange reserves had reached their highest level in October last year, but since then there has been a decline by over $90 billion until September 23 to just below $550 billion.

Europe’s Economic Hara-Kiri

THE cessation of natural gas supplies from Russia to Europe in retaliation against Western sanctions imposed on Russia because of the Ukraine war, is threatening Europe not only with a winter with inadequate heating that will take a big toll in terms of lives among poor people, but also with large-scale closures of enterprises; such closures would push up the unemployment rate, and significantly increase poverty and destitution among the workers.It is not just the immediate effect on Europe that threatens to be severely adverse; capital has already started relocating away from Europe to the

The Huge Danger Associated with Privatising Banks

THERE are fundamental objections to the plan of the government to privatise at least some of the public sector banks. They centre around the fact that such a move will change the pattern of deployment of credit, away from productive activities towards speculation, away from peasant agriculture towards big business (with dangerous implications for peasant viability, food security and employment), and away from domestic to global destinations.

First Quarter GDP Estimates for 2022-23

THE estimates of Gross Domestic Product for the April-June quarter released by the government on August 31 paint a dismal picture of the Indian economy. Since the GDP in real terms (at 2011-12 prices) shows an increase of 13.5 per cent over the first quarter GDP a year ago, and since 13.5 per cent appears an impressive figure, official spokespersons have been putting a cheerful gloss over it.

Controlling Inflation At the Expense of Working Class

ECONOMISTS distinguish between two kinds of inflation: “demand-pull” and “cost-push”. Demand-pull inflation is said to occur when there is excess demand in a situation where supply cannot be augmented, because full capacity output has been reached in one or more crucial sectors. War-time inflation is a classic example.

The Modi Government and the So-Called “Freebies”

A BIZARRE drama is unfolding in front of our eyes. The Modi government which has been giving away hundreds of thousands of crores of rupees as tax concessions to the monopolists has expressed its opposition ironically to what it calls “freebies”, that is to handing over subsidies to other segments of the population.

Sanctions and the Decline of the Dollar

THE hegemony of the US dollar was based on the fact that the world’s wealth-holders considered it to be “as good as gold”, even when it was no longer officially convertible to gold at a fixed rate, as it had been under the Bretton Woods system, after the collapse of that system. These wealth-holders were of two kinds: private individuals and institutions, and central banks that held the foreign exchange reserves of their respective countries.

Scandinavia and Imperialism

THERE are many misconceptions about Scandinavian capitalism. A very common one is the belief that since the Scandinavian countries developed vigorous capitalist economies, without ever having acquired any colonies of their own, they constitute a clear refutation of the claim that capitalist development necessarily requires imperialism.

“Heads I Win, Tails You Lose”

THE craftiness of imperialism is boundless. In several countries of the world at present there are neo-fascist governments, propped up by their respective big bourgeoisie (all aligned to globalized capital), and implementing neo-liberal policies with their characteristic ruthlessness; in many other countries, there are neo-fascist outfits attempting to get into power by promising to their big bourgeois patrons that they would do the same if in power.

The Indian Economy is Heading for a Stationary State

ADAM Smith and David Ricardo had been haunted by the idea of capitalism ending up in a “stationary state”, by which they meant a stable state of zero growth. Marx used the term “simple reproduction” to describe such a state, where there is no net addition to production capacity and the economy just reproduces itself at the same level period after period. The Indian economy appears headed for such a state.The Modi government’s propaganda machine, as usual, is working overtime to paint a rosy picture of the economy; but the reality is the very opposite.

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Peoples Democracy

ECONOMIC NOTES