ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Ranjit SauSubscribe to Ranjit Sau

A Lucid Primer

case, more practical than privatising generation of electricity, Pravin Visaria is at his usual best in analysing population trends, and it is not surprising that he is not as fertile as other authors in suggesting sure-fire remedies. He makes the valid but generally overlooked point that the favourable record of Kerala in reducing fertility rates is not all the result of desirable trends such as those in female literacy. It is also the result of negative factors such as the high pressure of population on land and the associated low proportion of rural male workers engaged in agriculture and the relatively high rates of open unemployment.

Missing Equation

Missing Equation Ranjit Sau Pricing and Inflation in India by Pulapre Balakrishnan; Oxford University Press, Delhi, 1991; pp 271 + xx, Rs 275. THE book under review is a very welcome addition to the literature on in inflation in India. It employs state-of-the-art econometric methods on a data-set that covers three decades ending 1979-80. It combines scholarship with perception and diligence, The reviewer has learnt a great deal from reading the book; he uses it in" his research and teaching. He invites others to do so. Having said that, in what follows we shall concentrate on relatively controversial parts of the book. We shall begin with a technical matter of econometric method.

Making of a Payments Crisis India 1991

Making of a Payments Crisis: India 1991 Ranjit Sau Inflation erodes the real value of a nominal debt, and thereby confers a capital gain upon the debtor. Such capital gain resembles the so-called 'inflation tax', or what Cagan calls 'the tax on cash balances'. This paper recognises the inflation-induced capital gain to the government of India as a positive item in the budget; it is the other side of the Pigou effect. The fiscal deficit thus adjusted is relatively small in size and non-increasing over time. Hence, we conclude that the fiscal deficit and the current payments crisis in India are unrelated, contrary to the official claim.

IMF s Financial Programming Model

year. The assistance of Arindam Dasgupta during the field work has been highly appreciated.) 1 On the panchayat system and its historical genesis, set Ashok Mukhopadhyaya, The Panchayat Administration in West Bengal, Calcutta 1977, and Subrata Kumar Mukherjee, Local Seff Government in West Bengal, Calcutta 1974.

Financial Programming for Stabilisation-Some Notes on IMF Model

Some Notes on IMF Model Ranjit Sau The IMF model of financial programming for stabilisation is based upon the monetary approach to the balance of payments. The model is incomplete as it does not combine a structure of general equilibrium with the fun- damental equation of the monetary approach. In this paper a Keynesian theory of income determination is grafted onto the monetary approach, and the import inducing effect of direct foreign investment is recognised, ft follows that the basic theorem of the monetary approach may get refuted under certain values of the parameters of the complete model. Econometric tests with Indian data reveal that it is quite possible for the IMF strategy to turn counterproductive. There are two parts to the policy model. Empirical evidence indicates the existence of a de- mand function for money, which is only one part. For the other part there are several alternative structures of general equilibrium. Hence the route to stabilisation is not unique. The IMF need not commit itself to a single model. Selection of the optimal model itself is the primary task before the action parameters and performance criteria can be meaningfully derived.

Some Aspects of Stabilisation Programme-A Superior Alternative to Devaluation

A Superior Alternative to Devaluation Ranjit Sau Devaluation has been a common feature of almost all stabilisation programmes in developing countries in recent years. Devaluation reduces the wage rate, and raises profit. This paper analyses the equilibrium of a firm in an imperfectly competitive export market It transpires that a suitably devised scheme of wage-cum-profit- sharing can promote exports, keeping the firm's profit at the initial level, but raising the worker's earning in comparison with the post-devaluation regime. In this sense the proposal has the merit of somewhat Pareto-like optimality. It has two other remarkable advantages. First, ihe package can be used so as to maximise the volume of dollar revenue; devaluation as such can never perform this feat in a wage economy Second, unlike devaluation, it has no contractionary effect on the economy.

Falling Rate of Profit in India s Industry

Ranjit Sau The Marxian law of falling tendency of the rate of profit has taken hold of several developed capitalist economies of the world, with the rising strength of labour that squeezes profitability. To test the law empirically not only the value categories are to be translated in terms of prices, but one has also to extend the investigation from the level of national accounts to that of company accounts which this paper does. The large companies of India have not experienced any secular decline in the rate of profit, although they might have seen cyclical variations. The explanation for the steady trend lies in the falling share of wages and salary in value added, which also indicates the existence of objective ground for class conflict. The government takes away about one-half of the industrial output in the shape of interest, and direct and indirect taxes.

Proposed International Debt Facility

Ranjit Sau An interesting proposal for dealing with the problem of third world debt envisages the setting up of an International Debt Facility that will buy such debt in the market and then 'forgive' a part of its contractual value.

A Theory of Underdeveloped Capitalism

A Theory of Underdeveloped Capitalism The Case of India Ranjit Sau Since the days of physiocrats in mid-18th century it is recognised that the course of an economy depends upon production, distribution and utilisation of the 'net product', or 'economic surplus', defined as the excess of national income over the wage bill. A distinguishing feature of underdeveloped capitalism, in comparison with developed capitalism, is that the surplus is transformed, not into simply profits, but into several significantly different components: ground rent, ordinary profit, and super profit. This makes the political economy of underdeveloped capitalism quite complex in that there are conflicts of interest among a multiplicity of classes

The Green Revolution and Industrial-Growth in India-A Tale of Two Paradoxes and a Half

The cowdung capitalism of green revolution in India has spawned a new breed of capitalists. These offsprings of gentlemen farmers are operating in an intermediate zone of agriculture and industry. They are eager to venture into the field of industrial capitalism. But the entry point in industry is uninviting and the future prospects dim. Under the new economic policy the economy is oriented towards the consumption pattern of the top decile of the population, Imports of technology, capital goods, and foreign capital are liberalised. The NEP would make India's economic development unstable, unequalising, and more crisis prone. Its impact on the newly emerging farmer-capitalists would be severe as they are under pressure from above as well as from below. They are threatened, in a shrinking market, by big capitalists including multinationals; on the other hand, they are confronted with the rising demands of workers, without enjoying the benefit of super profits, In any case, as simulations with Walrasian empirical general equilibrium models show the potential material gain from economic liberalisation is miniscule, if at all, hardly exceeding 0.3 per cent of GDP. The transition from cowdung capitalism cannot be accomplished through a policy that exacerbates dualism in the economy.

Effect of Tariffs on Foreign Prices

sector is not on the same plane as the principal contradiction in a social formation. It has become fashionable since the birth of the 'embourgeoisment' thesis to run down the organised working class for all the travails of the capitalist system. Omvedt must recognise the fact that the gap between the wages of the organised and the unorganised sector is not a creation of the labour movement; instead it is in the very nature of capitalist development. It would be ridiculous to compare such inequalities with class contradictions.

Interest, Profit and Wages-A Keynes-Ricardian Approach

According to a widely held view the rate of profit ought to be restored to its pre-1974 level for reviving the world economy which is in the grip of a prolonged general recession; and that requires a wage cut. This paper presents a model which displays the Ricardian stress on profit rate, the neoclassical factor substitution, the Keynesian effective demand, and the post-Keynesian concern for capacity utilisation. It is shown here that under certain conditions an underemployment equilibrium can be replaced by a full-employment-full-capacity equilibrium through raising the wage rate, rather than through wage cut. International aspects of the problem are briefly commented upon.


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