While monetary policy is an important element of the artillery against inflation — and with the 25 basis point hike, the RBI did part of what it was expected to do to tighten policy — there is the fiscal task too. As Raghuram Rajan, adviser to Prime Minister Manmohan Singh, points out, the Centre must control expenditure, cut subsidies and not start new spending programmes. Fiscal deficits are large and rising...
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Rural job plan turns 5, but wages need to grow more by Prasad Nichenametla
The Mahatma Gandhi National Rural Employment Guarantee Act, UPA’s flagship aam admi scheme, turns five on Wednesday. However, more than 30% of the rural India working under the right-to-work act would continue to receive wages below the guaranteed minimum as per the minimum wages act. On January 14, the ministry of rural development issued a notification revising the wage rates under the MNREGA from Rs 100 per day to between...
More »Budgetary support to Plan spend hiked 18% by Neeraj Thakur
The ministry of finance and the Planing Commission have finally agreed on increasing gross budgetary support by 18% for the terminal year of the Eleventh Five-Year Plan (2007-2012). GBS is the monetary assistance provided by the Centre to implement schemes in five-year plans. The ministry of finance will allocate around Rs4.41 lakh crore as part of the planned expenditure in the Budget for the next fiscal, compared with an allocation of Rs3.73...
More »Diluting the Right to Food by CP Chandrasekhar
The promise made by UPA II that it will ensure food security for Indians through legislation that guarantees the Right to Food seems, in its view, to have been an error. In a multi-stage process that reflects the pulls and pressures within the policy-making elite, the Food Security Bill has been diluted so much that it marks a reversal rather than an advance compared to the status quo. Let us...
More »Neoliberal illogic by Prabhat Patnaik
The class bias in government policy is clear in the decision to release a small amount of foodgrain in the open market to tackle inflation. MOST people would agree that there is a strong element of speculation underlying the current inflation and that forward trading contributes to it. Yet the government, though it has banned forward trading in certain commodities under public pressure, is curiously reluctant to see this point....
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