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<link rel="canonical" href="https://im4change.in/<pre class="cake-error"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f193cbdd7ff-trace').style.display = (document.getElementById('cakeErr67f193cbdd7ff-trace').style.display == 'none' ? '' : 'none');"><b>Notice</b> (8)</a>: Undefined variable: urlPrefix [<b>APP/Template/Layout/printlayout.ctp</b>, line <b>8</b>]<div id="cakeErr67f193cbdd7ff-trace" class="cake-stack-trace" style="display: none;"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f193cbdd7ff-code').style.display = (document.getElementById('cakeErr67f193cbdd7ff-code').style.display == 'none' ? '' : 'none')">Code</a> <a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f193cbdd7ff-context').style.display = (document.getElementById('cakeErr67f193cbdd7ff-context').style.display == 'none' ? '' : 'none')">Context</a><pre id="cakeErr67f193cbdd7ff-code" class="cake-code-dump" style="display: none;"><code><span style="color: #000000"><span style="color: #0000BB"></span><span style="color: #007700"><</span><span style="color: #0000BB">head</span><span style="color: #007700">>
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<p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government&rsquo;s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p>
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<p style="text-align:justify">T V Narendran, &nbsp;a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists&rsquo; body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more.&nbsp;</p>
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<p style="text-align:justify">T V Narendran, &nbsp;a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists&rsquo; body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more.&nbsp;</p>
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<strong>The Poverty of Economic Conservatism -Prabhat Patnaik</strong></h1>
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<p style="text-align:justify">-NetworkIdeas.org</p><p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government’s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p><p style="text-align:justify">Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.</p><p style="text-align:justify">T V Narendran, a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists’ body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p><p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE" title="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more. </p> </font>
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<p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government&rsquo;s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p>
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<p style="text-align:justify">T V Narendran, &nbsp;a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists&rsquo; body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more.&nbsp;</p>
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<p style="text-align:justify">T V Narendran, &nbsp;a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists&rsquo; body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
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In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided..."/>
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<strong>The Poverty of Economic Conservatism -Prabhat Patnaik</strong></h1>
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<p style="text-align:justify">-NetworkIdeas.org</p><p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government’s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p><p style="text-align:justify">Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.</p><p style="text-align:justify">T V Narendran, a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists’ body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p><p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE" title="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more. </p> </font>
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<p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government&rsquo;s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p>
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<p style="text-align:justify">T V Narendran, &nbsp;a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists&rsquo; body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more.&nbsp;</p>
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<p style="text-align:justify">Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.</p>
<p style="text-align:justify">T V Narendran, &nbsp;a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists&rsquo; body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more.&nbsp;</p>
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<strong>The Poverty of Economic Conservatism -Prabhat Patnaik</strong></h1>
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<p style="text-align:justify">-NetworkIdeas.org</p><p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government’s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p><p style="text-align:justify">Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.</p><p style="text-align:justify">T V Narendran, a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists’ body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p><p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE" title="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more. </p> </font>
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<p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government’s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p>
<p style="text-align:justify">Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.</p>
<p style="text-align:justify">T V Narendran, a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists’ body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more. </p>
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<p style="text-align:justify">In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government’s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.</p>
<p style="text-align:justify">Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.</p>
<p style="text-align:justify">T V Narendran, a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists’ body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!</p>
<p style="text-align:justify">Please <a href="https://www.networkideas.org/news-analysis/2021/06/the-poverty-of-economic-conservatism/?fbclid=IwAR0rHdg8RXKc4XAG6ePAik27k_43HExIF7VY3BiPQ26WkoDhqMn6enlc6ZE">click here</a> to read more. </p>
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LATEST NEWS UPDATES | The Poverty of Economic Conservatism -Prabhat Patnaik | Im4change.org
The Poverty of Economic Conservatism -Prabhat Patnaik
-NetworkIdeas.org
In terms of economic policy, the Modi government must be perhaps the most conservative in the world. During the entire period of the pandemic when millions of people lost their incomes and livelihood support, most governments around the world provided universal cash transfers to the people, but not the Modi government. True, many other third world countries too did not provide such universal cash transfers, but their hands were tied; they had contracted heavy external debt and were enjoined to austerity by agencies like the IMF that helped them roll over their debt. But India was under no such external pressure to pursue austerity and avoid making transfers to the working people; the Modi government’s niggardliness towards the people was entirely its own decision, born out of a blind faith in policy conservatism. And the bankruptcy of such conservatism is now visible to all.
Government expenditure is kept restricted in order to control the fiscal deficit so that inflation remains low; but despite government expenditure being restricted, wholesale inflation in May was 12.94 per cent and retail inflation was 6.30 per cent, and even the fiscal deficit as per cent of GDP was soaring. The economy is supposed to revive on the back of the massive tax concessions handed out to the corporate sector, once the lockdown is lifted; but the growth rate of the index of industrial production was 3.1 per cent in May, decelerating from 4.3 per cent in April (and this is not because of any base effect). Likewise, conservative economic policies are supposed to please globalised finance, attract financial inflows, and keep up the exchange rate; but the rupee has been under considerable pressure of late. Thus, conservative economic policies are producing the very opposite results to what they are supposed to produce. And now the capitalists themselves are getting tired of it. The very class in whose interests conservative policies are meant to be pursued is now openly opposing these policies.
T V Narendran, a Tata executive who is the current chairman of the Confederation of Indian Industry, has presented a proposal on behalf of the CII suggesting a fiscal stimulus of Rs 3 lakh crores, including a provision for cash transfers. This means that the proposal for cash transfers is now being made across the spectrum, not just by economists, opposition political parties, and civil society organisations, but even by the capitalists’ body itself. Not that they are all making identical suggestions; but they are all recognising what is apparent to everybody other than to the Modi government, namely that the real problem of the economy today arises from a shortage of purchasing power in the hands of the people, which can be rectified by providing cash transfers. Contrast this with the absurd claim of the government economists that handing purchasing power to the people would be of no use, because it would not lead to any larger expenditure on consumption by them!
