Praxeology: My Reflexions on India

The Indian Parliamentary election for the next five years is on. The present Indian prime minister Narendra Modi is battling hard for his reelection. All opposition parties are united against his government to combat the kind of polarization that Modi and Shah (BJP national president) are spreading in India with the support of their ideological backers RSS (Rashtriya Swayamsevak Sangh). The main opposition party Congress is resurgent, winning three major Hindi heartland states in recent state elections, after touching its nadir in 2014 parliamentary election. Narendra Modi has to battle a hard reelection bid because of dismal performance of his government in last five years on all the fronts, especially on the economic front. His immature half baked policies like demonetization and GST have devastated the economy. Unemployment is highest in last 45 years. Just after demonetization 5 million people lost their jobs. The informal sector, which is the backbone of the In...

The main opposition party of India, Indian National Congress, has announced a new scheme, NYAY (Nyuntam Aay Yojana), as a political promise to the poor people of India. According to the announcement from the Congress party president Rahul Gandhi, this minimum income guarantee scheme will assure a payment of Rs. 72,000 a year for India’s poorest families if the Congress came to power. The money will be directly transferred to the bank accounts of 20 per cent of the poorest in the country. The scheme would lift five crore families or 25 crore people out of poverty . Rahul Gandhi further said, It is not acceptable to the Congress that there is poverty in India in the 21 st century. The final assault on poverty has begun. He further said, that if the incumbent Modi government can give thousands of crores of rupees to few rich people of India then Congress party can definitely give this 72000 crore to the poor Indians. So, is this scheme really a final assault on pove...

The former governor of RBI and the chief economist of IMF Dr. Raghuram Rajan recently told BBC that, I think capitalism is under serious threat because it’s stopped providing for the many, and when that happens, the many revolt against capitalism. He said governments cannot afford to ignore social inequality when considering the economy. Is Rajan correct? To understand whether Capitalism is under any kind of serious threat or not we first need to know what Capitalism is? Robert Murphy, in his book Lessons for the Young Economist , gives the detailed definition of Capitalism, A capitalist system is based on private property. In this institutional arrangement, goods and services are owned by individual private citizens, or by groups of such citizens. In a pure capitalist system, not only every house and car, but every tractor, acre of farmland, and assembly line are all respectively owned by private citizens, sometimes organized in groups. A good’s owner is the...

The American journalist Randolph Bourne in his famous essay, The State , said , The moment war is declared, however, the mass of the people, through some spiritual alchemy, become convinced that they have willed and executed the deed themselves. They then, with the exception of a few malcontents, proceed to allow themselves to be regimented, coerced, deranged in all the environments of their lives, and turned into a solid manufactory of destruction toward whatever other people may have, in the appointed scheme of things, come within the range of the Government’s disapprobation. The citizen throws off his contempt and indifference to Government, identifies himself with its purposes, revives all his military memories and symbols, and the State once more walks, an august presence, through the imaginations of men. Patriotism becomes the dominant feeling, and produces immediately that intense and hopeless confusion between the relations which the individual bears and shoul...

A recent militant suicide attack on a convoy of CRPF (Central Reserve Police Force) in Pulwama, Kashmir has jolted India. Total 44 CRPF soldiers died in this attack. This is one of the deadliest attacks on Indian armed forces in the history of Kashmir insurgency. Majority of the Indians, who are now very nationalistic, are very angry and demanding a total war with Pakistan. Social media is awash with such demands. They want government to take revenge. Modi government has decided to avoid calls for this war . The violence and bloodshed is going on for decades in Kashmir. It is sad that people are losing their dear ones and loved ones. If Indians want to end this violence and bloodshed then they must objectively analyze this conflict.   As historically known, Kashmir conflict is a classic case of ‘property dispute’. In human society conflicts arise because of scarcity. When more than one people stake their claim on a given scarce resource, in this case the land of Kash...

A recent news headline said , As many as 7,000 persons, mostly graduates, had applied for 13 vacant posts of canteen waiters in Mantralaya, the Maharashtra secretariat . Another said , As Narendra Modi government and opposition fight over ‘jobs crisis’ in India, another surprising news has come from Uttar Pradesh where over 93,000 candidates including Phd holders, post graduates have applied for peon jobs that have an eligibility of Class V . Then there was this news, More than 25 million people, a number greater than Australia’s population, have applied for about 90,000 positions on India’s state-run railways, underlining the challenge Prime Minister Narendra Modi faces in providing millions of jobs ahead of an election in 2019. All these data present a very grim picture of Indian job market. India is a country of 1.36 billion people with one of the world’s youngest labor forces. Mainstream economists, politicians and media pundits don’t get tired talking about th...

Former governor of RBI Dr. Raghuram Rajan and MIT professor Dr. Abhijeet Banerjee have written an article, viz. Eight things India must do in 2019 , in Times of India on 1 st January, 2019 [i] in which they present a list of eight things which according to them India, government and people collectively, must do in new year to improve her future. In this article I want to critically analyze their proposal. Rajan and Banerjee give the following background as a cause of their proposal, Last October thirteen of us, all economists, got together in the hope that as the country gears up for elections, we could start a conversation by identifying a set of policy ideas that might help inform party manifestoes and policy visions. While our views stretch across the spectrum from right to left, we found surprising agreement on the challenges India faces and reforms it needs now. Two of us sifted through the set of ideas, picking what we felt were the top challenges and propo...