LAUNCH OF RAMJAS ECONOMIC REVIEW, VOLUME III
The Editorial Board of Ramjas Economic Review launched the third volume of its annual academic journal on 16th September 2021. The launch was graced by the eminent Marxist economist Professor Prabhat Patnaik. The event included a lecture delivered on the theme “Growth and rising inequality in post-Reform India” followed by an enriching discussion.
The launch commenced with Prof. Patnaik sharing his insights on the previous and current volumes of the journal. Subsequently, the third volume was officially launched on its official website.
In 1991, India embarked on various structural reforms and stabilization measures. Even though post-reform GDP growth has been higher, one can call a reform successful only if the well-being of people, the poor in particular, increases over time. It is a popular narrative that millions of people who were lifted out of poverty because of the reforms fell back even before the pandemic and COVID-19 has only accentuated the trend. They state that neoliberal reforms were successful in reducing poverty but demonetisation and the implementation of GST reduced whatever progress was made. Professor Patnaik began by analysing this concept. He took into consideration the time period between 1993-94 and 2011-12. During this period, the proportion of nutritionally deprived people, that is, those who consume 2200 calories per day in rural India and 2100 calories in urban areas have increased. This indicates that there can be a period of high growth rate and increased poverty at the same time.
He then addressed the reasons for such an increase in poverty despite the rising growth rate. This is because post-reform growth has been primarily concentrated in the tertiary sector, but most of the working population is engaged in the agriculture (primary) sector.
Furthermore, he stated that privatisation of services has had a major role in lowering living standards, leading to a reduction in the consumption of food calories. He concluded that this trend caused people to cut back on food consumption. This paved the way for peasant indebtedness, which arose because they started borrowing for health and education purposes instead of investments on their agricultural activities. Prof. Patnaik also drew contrasts between the Capitalist and the Petty production sector, and emphasized on how Capitalist products not only absorb labour but also snatch the product markets, inputs and fiscal resources of petty products. All these ways in which the capitalist sector encroaches upon the petty production sector was termed as primitive accumulation by Marx. He further highlighted how liberalization unleashed the primitive accumulation of capital. The Dirigisme regime balanced the different classes and prevented the capitalist sector from encroaching upon the petty production sector. However, all these ways of protecting the petty production sector were done away with by the neoliberal regime.
Furthermore, he pointed out how R&D in publicly funded laboratories for the agriculture sector has virtually ended, and as a result, peasants seek help from multinational firms for cropping technology. Moreover, the price support operations of the government have completely disappeared for cash crops. Consequently, the number of cultivators 1991-92 between 2011-12 have declined by 15 million. Additionally, between 2011-12 and 2017-18, per capita rural expenditure in real terms fell by 9%, according to an NSS survey.
He also mentioned that the labour reserve army has increased over this time. An expansion in the reserve army decreases the bargaining power of labourers, who are largely unorganised, thus reducing their income. As a result, organised labour is also impacted. He talked about the implications of this trend. While employees' actual earnings have remained unchanged, labour productivity has increased and the resulting proportion of surplus goes to capitalists instead of the working population. Eventually, income disparity has risen through time.
He finally wrapped up the session by suggesting five fundamental economic rights akin to political rights should be enacted upon. These are: Right to employment failing which the person is compensated, right to food, right to quality and publicly funded education (at least up to schooling level), right to quality to publicly funded healthcare, and right to living old age pension.
The talk concluded with a brief Q&A session where the audience expressed different opinions and viewpoints. It was most definitely an enlightening discussion.