Praxeology: My Reflexions on India

Indian businesses, especially the so-called ‘too big to fail’ ones, are drowning in debt and are failing one after another. Here is a list of few of these businesses: First, the   IL&FS   default and insolvency. Also,   DHLF , another giant housing finance company, is also near default. Second, Baba Ramdev’s   Patanjali   is struggling hard with slower sales and falling revenues. The major reason behind Ramdev’s fall is,   Patanjali also suffered, like many others, from Modi’s 2016 ban on high-denomination banknotes and 2017 introduction of a new goods and services tax. The moves disrupted economic activity . Third, India’s second biggest private airline company   Jet Airways   has gone belly up after around 40 years of successful business. It couldn’t service its debt. Fourth, the Birla family owned   Yash Birla Group   has defaulted on its debt payment. Its owner Yashovardhan Birla is now declared a ‘willful defaulter’ by...

In his second term, the Narendra Modi government is going to carry out some   major labor reforms . These reforms aim to consolidate myriad of different labor legislation under four major labor codes. These codes are as following, The first Code talks about minimum wages for every worker, unorganised, and contract labourers in the organised sector. The second one on industrial relations aims at changing the rules binding labour unions, handling labour disputes, terms of employment, lay off, retrenchment policies etc. The third, social security and welfare expands the scope of the coverage of Employees State Insurance (ESI) to every worker, irrespective of the size of the firm. The last one prescribes occupational safety, health and work conditions for Indian labour. If enacted what impact these major changes in the labor legislation will have on the labor market is the question that I am going to answer here. Two of the codes, minimum wage and social security, are at th...

Immediately after winning his reelection bid with yet another thumping majority, on the back of surgical strikes across the LoC, the prime minister of India Narendra Modi made   three vows   to the people of India. They are, My first vow is that I will not do anything out of ill-will or bad intentions, I could make mistakes but never do anything out of malice. My second vow is that I shall never do anything for myself in order to garner profit for myself, and my third vow is that every minute of my life and myself I shall devote to the country. Whenever you want to evaluate me, you must do so on these parameters. This is a cheap tactic of setting up a narrative that suits him, but for the sake of argument let us evaluate him using his own parameters only. In these vows there is a message for Indians who voted overwhelmingly him back to power. This message is the following one: First, Modi said he won’t do anything out of ill-will or bad intentions. I doubt any form...

Life means reproduction and survival up to the age of reproduction. That survival requires energy that we receive by consuming various goods. There are two types of these goods. One that we use directly to satisfy our needs and second that indirectly satisfies our needs. The first one is called  consumer goods  and the second  producer goods . The problem that we all face is that the supply of these goods, in relation to its demand by all of us, is scarce. Scarcity is the basic condition of our lives. Now, if we want to improve our material life, which is a fundamental necessity and basis of all other needs, then we will have to reduce this scarcity as much as possible. If there are abundant goods available to fulfill our various needs then the quality of our life will definitely be better than a situation where those goods are not abundant. Riches is better than poverty. The fundamental question that arises from this fact of life is, which system will help us in in...

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...