Monday, June 24, 2013

Top 10 countries by the size of economy and telecom services revenue, 2011-12

Economy (US Dollars in billions)

Telecom Services(US Dollars in billions)











China GDP Per Capita=6000$                         India GDP Per Capita=1,500$

Monday, June 17, 2013

CIC is Wrong: A Political Party is not a Public Authority

THE Central Information Commission (CIC) has given an order that political parties are to be treated as “public authorities,” as defined in the Right to Information (RTI) Act 2005. By this decision, the commission has placed the political parties on par with government and state institutions. Under the RTI Act, any one can access information from government or a state institution regarding the decisions taken, about the expenditure incurred and the relevant file notings on matters concerning the body. The purpose of the act is to allow citizens access to information about the government and publicly funded state institutions which may have affect the lives of the rights of citizens. The CPI(M) had supported the legislation and its adoption as a democratic step forward. 

However, the step taken by the CIC to extend the purview of the RTI Act by declaring that a political party is a “public authority” is misconceived and wrong. This order stems from a lack of understanding and a basic misconception about the role of political parties in a parliamentary democracy. Political parties are not governmental organisations or state funded entities. There is no constitutional provision for a political party. A political party is an association of citizens who come together voluntarily to form a party. This can be on the basis of the fact that they subscribe to a particular ideology, programme and leadership, which the party stands for or espouses. Thus, there can be a wide range of parties differing in their political, ideological and organisational functioning. Therefore, to term these political parties as “public authorities” on the ground that they are substantially financed directly or indirectly by the government or the state power is fundamentally wrong. It blurs the distinction and mixes up the role and functions of the political parties with those of the government and the government sponsored organisations.

By declaring a political party to be a “public authority” under the RTI Act, the CIC wants to ensure that any one can apply and get information and material about the functioning of a political party, about the decisions it takes on political, organisational and policy matters and about its finances and sources of funding. For instance, under the RTI Act, a citizen can apply for information about how a government department took certain decisions and how it implemented them. There can also be access to file notings and official correspondence on the matter. Now by the CIC’s new order, any one can ask for access to internal deliberations of a political party. They can ask for relevant material and papers which went into the decision making and the views of various office-bearers of the party concerned. If such a procedure is adopted, it will harm the very mode of inner-party functioning.  Within a party, discussions are held and it is on the basis of confidentiality that certain decisions are taken. To demand that such deliberations be made available will be a serious infringement on the nature of inner-party discussions and the way decisions are taken by a political party. This can lead to an undermining of the structure of political party itself. By such a dispensation under the RTI Act, for example, a BJP member can demand information about the internal matters of the CPI(M) and vice versa.  Opponents of a political party can thus utilise the RTI Act as an instrument against another party. 

The CPI(M) is a party which is organised on the principle of democratic centralism. This is a distinctive method which a Communist Party adopts; no other party follows this principle. If the RTI Act is applied to ask for information on the party’s decision making, this will directly harm the discipline of the party. By the principle of democratic centralism, members of the party in their elected committees cannot divulge inner-party discussions which are conducted democratically in a free and frank manner.  How a party conducts its internal discussions and functioning is for that party to decide. It is accountable only to its own members who have voluntarily joined the party. Bringing this area of decision making and organisational functioning under the RTI Act will undermine the political system and is an encroachment on the democratic right of political parties. 

One of the demands made under the RTI Act for political parties is to provide the basis for the selection of candidates --- a fact mentioned in the CIC’s order. But how a party selects its candidates is its own business; how is it a concern of others? In a democracy, the people are free to judge and decide which candidate to vote for or not. In a democratic system, a political party has the right to decide whom to put up as a candidate --- according to whatever criteria they wish to adopt, which are within the legal framework. For instance, as per the law, a person convicted of a serious crime cannot be put up as a candidate, as he or she will be disqualified. If there is any need for change in the law, it can be discussed. But the intrinsic right of a political party to put up candidates on the basis of its own criteria cannot be questioned or subjected to any public scrutiny. 

Unlike what the CIC has stated, political parties are not substantially financed or funded by a government or the state power. The examples cited to prove such funding are irrelevant or negligible. For instance, much is made of the time slots given to political parties in the state-funded media like Doordarshan and All India Radio. The effort to quantify the money involved in terms of prime time advertisements is unfounded. First of all, election broadcasts or telecasts cannot be quantified in commercial terms.  Secondly, their role in election propaganda of the political parties is negligible and the funds spent on other forms of election propaganda by the parties and candidates are of a much larger magnitude. 

Another example given to prove government funding is that land or buildings have been given to political parties on a rental or lease basis for their offices. Political parties are not commercial or profit making entities. The government provides land to a variety of non-governmental organisations which are not meant to be commercial or profit making bodies. In Delhi, for instance, political parties have got land at concessional rates compared to the market value, just as other non-commercial, charitable organisations, including religious bodies have got. To cite this as an example of substantial funding by the government is erroneous and irrelevant. 

There is a genuine concern about how political parties raise money and fund their activities. There should indeed be transparency and accountability in the funding and finances of political parties. Under the present law, every recognised political party has to submit its annual statement of accounts and finances to the Income Tax Department and to the Election Commission. The Election Commission has been providing information about the political parties’ audited accounts and finances to anyone who applies for it under the RTI Act. Under the existing law, any donation of Rs 20,000 and above has to be recorded with the name and address of the donor. This list is also accessible under the RTI Act from the Election Commission. The CPI(M) was the first party to advocate that even the IT returns filed by the party can be made public. Since the party is demanding electoral reforms where there should be an element of state funding towards election expenditure of political parties, the CPI(M) strongly advocates that the finances and funding of political parties be made public. 

The CPI(M) has put out a detailed statement of how it collects funds and the sources of its finances in August 2012. About 40 per cent of the annual income of the party comes from the levy collected from party members and from the annual membership fees. Every month party members have to contribute a percentage of their income as levy to the party. This ranges from Rs 5 to Rs 5,000, according to a slab system. The levy on the CPI(M) MPs and MLAs is higher. For instance, MPs and former MPs contributed to the Central Committee Rs 1.37 crore in the year 2011. The CPI(M), as a matter of principle, does not accept donations from corporate houses. The party has a method of mass collections from the people periodically where small amounts are the main type of contributions. Whoever wants to, can access the details of the CPI(M)’s finances from the Election Commission. 

Another factor cited in the CIC order is the tenth schedule of the constitution whereby members of parliament and legislatures elected on a party ticket can be disqualified if they leave that party and join another party or defy the party whip in voting. The concerned political party can then move for their disqualification. This has been cited to accord the political parties a statutory status. This is an obfuscation. The germane issue is to stop defection by elected representatives who betray the mandate given to them. It applies to members of legislative bodies but does not apply to other members of parties who are free to leave a party and join another. The disqualification of a member can be done only by the presiding officer of the house and not by a political party. Thus what was a constitutional amendment brought to stop defections by elected representatives is now being cited to make the political party a “public authority.”

A political party cannot be treated as an NGO which is getting substantial state funding. Political parties play a vital role in the parliamentary democratic system. That role should not be hampered or infringed upon by dubbing these parties as “public authorities.”

The CIC has exceeded its brief under the RTI Act by setting out a new definition of political parties. When the parliament adopted the Right to Information Act in 2005, which was supported by the CPI(M) too, the intention of the parliament was not to bring political parties as “public authorities” under its purview.  Therefore, it is necessary for the government to discuss with all the political parties and get the necessary clarification incorporated in the RTI Act itself by parliament

(Article by Prakash Karat, CPI(M) General Secretary, published in "Peoples' Democracy" 9.6.2013 issue)

Sunday, June 16, 2013

The Politics of a Development Strategy

The Politics of a Development Strategy


Prabhat Patnaik  


THE projection of Narendra Modi as the next prime minister of India is the politicaldenouement of the economic strategy that has now been more or less accepted by all bourgeois formations in India and is labelled “neo-liberal,” though misleadingly so. It is the logical culmination at the political level of this economic strategy.




The essence of this strategy is the use of the state exclusively in the interests of the corporate-financial elite. (This is why the term “neo-liberal,” indicating a blanket disengagement of the state from the economic terrain, is a misnomer.) The development, the maturing, the perfection, of this strategy consists in the direct appropriation of the state by the corporate-financial elite. And Narendra Modi is the agent of this appropriation. He comes from the BJP stable, and has a consistent record of communal-fascism; but he is above all a tool of the corporate-financial elite, backed to the hilt by this elite and the media controlled by it.


The so-called “development model” of Modi is nothing else but handing over the state over which he presides to the corporate-financial elite. He is the man who, according to a report in The Hindu, had subsidised the Tatas to the tune of Rs 31,000 crore to induce them to establish their Nano plant in Gujarat. It is in the nature of things that this “model” of development would exclude the people. Not surprisingly, Gujarat which is tomtommed as a “model of development” has an abysmal human development record, far worse than most other Indian states; labour unions have been under sustained attack. The ultimate political expression of an economic model of development that is completely anti-people and pro-corporate, is a state controlled by the corporate elite and used against the people, a fascist state which Modi is supposed to usher in, and is being backed by the corporate elite for doing so.


This economic model, however, is not Modi’s own concoction. It is the neo-liberal model that now has the allegiance of all bourgeois parties. Modi’s only distinction is that he pursues this model with a remorselessness that is unparalleled. All other political leaders are hemmed in by their parties with all sorts of ideological inheritances, and with a myriad “equations” to be taken care of. Manmohan Singh and his group, for instance, have to operate through the Congress party which is constrained, no matter how tenuously, by its own slogan about caring for the “aam aadmi.” But Modi has no such constraints. He has risen above his party, reduced his party into a rubberstamp, and can pursue the agenda of the corporate-financial elite single-mindedly.




A hallmark of this development model ironically is that its very failure is used as an argument to intensify its application. If the rupee is tumbling, if the manufacturing sector is in a recession the like of which the country has never seen (the mid-sixties industrial recession, the only one with which it has a superficial resemblance, had been caused after all by an exceptional circumstance, namely the extraordinarily poor agricultural harvests over two successive years), if the current account deficit is worsening by the day, then a chorus is orchestrated: “we need more reforms,” i.e. a heavier dose of neo-liberalism.


Was it not Manmohan Singh himself who said that the country’s current economic travails were because the “animal spirits” of the entrepreneurs were flagging, and that these had to be revived through state policy? In other words, if neo-liberalism had brought us to a crisis, then the way out of it was more neo-liberalism imposed through the agency of the state.


While using Keynes’ phrase “animal spirits,” he did not follow Keynes into suggesting that since the “animal spirits” of the entrepreneurs did often flag, the fate of the people should be made independent of these “animal spirits” by pursuing full employment policies directly, i.e. through state intervention in the interests of the people. Rather, his argument was that if “animal spirits” were flagging, then the state has to revive them through policies pursued in the interests of the corporate-financial elite itself.


Ergo, Vodafone should be allowed to get away with tax arrears, multi-brand retail should be opened up for Walmart, the public sector should be privatised to an even greater extent, the financial sector should be further opened up to foreign players, development banking should be put an end to, and so on.


Because neo-liberalism sees further intensive adoption of neo-liberalism as the solution to the crises it generates, the demand for corporate control over the state increases in shrillness precisely when the economy is engulfed in crisis, which is the case now.




This is where we find a difference between classical fascism of the 1930s and now. At that time, the corporate control over the state came through the backdoor as it were, through the rise to power of forces that initially proclaimed animosity to big corporate capital, even though funded by such capital, and cashed in on the anti-capitalist mood of the people by adopting a right-radical posture. It is only after coming to power that such forces purged their own right-radical followers and expressed openly their close links with the monopoly groups.


But that was a period of inter-imperialist rivalry when the world had been divided into spheres of influence of rival capitalist powers, not a period of “globalisation” with unfettered cross-border movements of commodities and capital. In a world of globalisation, such a two-stage process, of an initial radical anti-monopoly rhetoric followed later by an open direct alliance between fascist “upstarts” and the monopoly houses, is scarcely feasible. Anyanti-monopoly or anti-finance rhetoric on the part of an ascending political force will be followed by such large capital outflows that the ascent of this force will be effectively sabotaged. Hence the prospect presented to the people reeling under the impact of a crisis is not that it would be overcome through an attack on the monopolists, but that it would be overcome through placating the monopolists, i.e. not through a debunking of the “development model” but through an intensification, a carrying forward, of the “development model.”


This is what Modi promises. Of course his communal-fascism, even if not fore-grounded at present, gives him his “mass appeal.” But this “mass appeal” is combined not with an anti-capitalist rhetoric for accession to power; on the contrary it is combined with a no-holds-barred propagation of the same development strategy that the corporate-financial elite wants. European fascists in the 1930sbecame tools of finance capital; Modi is a tool of finance capitalab ovo.


This is also the reason why all his opponents among the bourgeois parties appear so feeble in their criticism of Modi; because in basic matters of economic policy he stands precisely for what they stand for, only even more emphatically. Among most bourgeois parties there is even a sneaking admiration for his “development model,” since this is the very “model” they uphold and would like to follow to the hilt if they could. It is not surprising that self-professed political Liberals like economist Jagdish Bhagwati of Columbialaud Modi’s “development” successes, as indeed Manmohan Singh himself would probably have done, if only he were free to do so.




All that Modi’s political opponents among the bourgeois formations can do is to draw a distinction between Modi the communal-fascist and Modi the “successful developer.” Yes, he may have been successful in his development effort, they aver; but isn’t he a communal-fascist? He should be kept out because of his latter trait, no matter how laudable his former trait may be.


But such a distinction fails to carry conviction, since Modi, after the Gujarat carnage, has succeeded in manufacturing for himself an image-change, projecting for himself precisely the image that his opponents admire, of a “development messiah” and pushing to the background his communal-fascism, to the point where the Gujarat government even briefly considered, until admonished by the RSS, appealing for award of death sentence for Maya Kodnani and Babu Bajrangi.


Besides, this distinction between Modi the “developer” and Modi the communal-fascist is intrinsically unsustainable. The concept of “development” that Modi upholds, and shares with all other bourgeois formations, apotheosizes the growth-rate, which in turn is seen, notwithstanding occasional invocations of the “high-growth-yields-larger-government-revenue-which-can-then-be-spent-on-the-poor” argument, essentially as helping India’s emergence as an “economic superpower.” The neo-liberal model in short is itself sought to be justified on grounds of big-power chauvinism: grounds, which, not to beat about the bush, are themselves fascistic. In a world where all bourgeois formations are contributing to this fascistic discourse, is it any surprise if their resistance to the emergence of a real communal-fascist appears feeble in the extreme?


In short, one cannot oppose Modi if one subscribes to the development model championed by him. One cannot oppose Modi by drawing a Manichean distinction between Modi the “communal-fascist” and Modi the “development messiah,” and thereby upholding the neo-liberal development strategy that he pushes through ruthlessly, because this development discourse itself has fascist underpinnings.


To say this is not to suggest that Modi, and his corporate backers, will succeed in their project. They would not, because large segments of the working people, who have been victims of this development strategy, even when it was apparently “successful,” will revolt against it, and oppose this project; his opponents in short will get the better of him despite themselves.  


What is striking in all this, however, is the intellectual degeneration of Liberalism. John Maynard Keynes was a Liberal. And long before him John Stuart Mill was a Liberal (though later in life under the influence of his wife, Harriet Taylor, he moved to a “cooperative socialist” position). John Stuart Mill had visualised the arrival of a “stationary state” (where the growth rate would be zero), but was not worried by it as long as the workers were better off in such a stationary state. A nation, he held, “should fix attention upon improved distribution, and a large remuneration for labour, as the true desiderata.”


Liberalism, in short, was traditionally concerned with the condition of the workers; it differed from socialists on how this condition could be improved. What a contrast from today’s Liberal position that apotheosises the growth-rate on fascistic grounds, and advocates a squeeze on the working people for achieving it?

Saturday, June 15, 2013

Globalisation widens wage inequality

Globalisation Widens Inequality in Wage Pattern: ILO Study


Sukomal Sen


IT was predicted by many bourgeois economists not very long ago that globalisation, the growth of international trade and capital flows, would reduce inequalities in the developing countries. The standard trade theory predicted that a fall in trade barriers would trigger massive exports of goods that used a large number of relatively low skill workers, the most abundant production factor in developing countries. Hence, it was expected that in these countries, globalisation would raise the demand for, and wages of, relatively low skill workers, and thereby reduce wage inequalities. The plausibility of this prediction was reinforced by the earlier experiences of some countries and territories, notably the Republic of KoreaSingaporeand Taiwan (China), which had succeeded in reducing inequalities while undergoing trade reforms in the 1960s and 1970s.              




However, the story of globalisation in the 1980s and 1990s has been quite different. Reviews of the relevant literature show that all existing measures about inequality in developing countries point to an overall increase in inequality over the last three decades, which in some cases was quite severe. In fact, with the notable exception ofLatin America in recent years, almost all developing countries seem to have experienced an increase in the skills premium during this period. What explains this apparent paradox? One possibility is that the entry of giant countries such as China andIndia into the global marketplace has put downward pressure on the prices of labour intensive products everywhere across the world, hence reducing the wages of previously protected low skilled workers. It has also been observed that the sectors and industries that experienced the largest tariff cuts in developing countries were often those with the highest shares of less educated workers and the lowest wages to start with. In Colombiaand Mexico, for example, it was found that after trade liberalisation, wages in the low wage industries declined most, hence increasing inequality.


The minimum wage is another key labour market institution. It means setting a wage floor applicable to wage earners, ensuring that they receive a minimum level of pay protection. Therefore, it mostly affects the low end of the wage distribution, whereas the other wage-setting institutions (such as trade unions and collective bargaining) affect the whole distribution. Although most countries in the world have some form of minimum wage, the characteristics of minimum wage schemes vary across nations, making the elaboration of comparable data sets on minimum wages a difficult task. Minimum wage fixing procedures (including government legislation, collective bargaining), the coverage rate, eligibility and other operational details all change from country to country. There can also be different minima, according to hourly, daily, weekly or monthly time frames. Outside the single minimum wage, reduced or sub-minimum rates for specific group of workers, such as young people, can also be set.




A study by the International Labour Organisation (ILO) ---Perspectives on Labour Economics for Development --- shows that workers being part of a trade union in India considerably reduces the probability of low pay for both salaried and casual workers. For salaried workers, the probability of low pay for otherwise similar workers falls by 25 per cent in urban areas and by 14 per cent in rural areas. This means that, for workers, being part of a union is the third largest determinant for escaping low pay, next to the education and sex variables. Interestingly, being part of a union or an association that defends the interests of workers is also an important factor in the wages of casual workers, reducing the probability of low pay by 16 per cent in urban areas and 11.5 per cent in rural areas. In spite of the challenges, public employment guarantee schemes in India such as possibly by Nehru Rozgar Guarantee Scheme may have contributed to raising the effectiveness of minimum wages.


The overall collective bargaining coverage in India remains relatively limited, with an estimated 24.9 million unionised workers in 2002, representing a union density of 6.3 per cent. While many of the same problems related to fragmented trade unionism in other countries in the region also apply to India,the case of West Bengal, where an estimated five million workers are unionised, is interesting. One important reason for the relatively high collective bargaining coverage in West Bengal is linked to the increasing inclusion of unorganised sector workers into the ambit of industry-wide collective bargaining. So, for example, many small units in the sponge iron industry, cold storage enterprises and hosiery workers have been covered as a result of government facilitating the signing of agreements in industries hitherto uncovered by collective agreements during the rule of Left Front government. At the same time, it is also recognised that the economic impact of the trade union movement in India is not without its problems and that trade unions should perhaps operate a paradigm shift from "political unionism" to a tradition of services based trade unionism, more suitable for developing industrial relations. (What ILO terms as political unionism is actually meaningless).


Another important area of wage policy relates to the design of minimum wages in India. Through the adoption of the Minimum Wages Act in 1948,India became one of the first developing countries to introduce a minimum wage policy. The system, however, is one of the most complicated in the world, where state governments fix different minimum wage rates payable to different employees in a limited number of sectors and occupations (the so-called "scheduled employments") where collective bargaining is absent and where workers are seen as being vulnerable to unduly low wages and exploitation. The result is a complex system with no less than 1,171 different minimum wage rates but in which many million workers remain uncovered because they do not work in any of the "scheduled employments."


The ILO estimated that partial coverage together with non-compliance have resulted in a situation where 73 to 76 million salaried and casual workers, out of a total of about 175 million, were being paid below the statutory minimum wages, This calls for a rethinking of the way minimum wages in India are fixed and implemented, moving in the direction of a simpler system with better implementation and broader coverage.


Certain key statistics, however, such as the ratio of the minimum wage to the average wage, are often used to capture the effects of minimum wages on employment or on the distribution of earnings in different countries. In developing countries, given the limited collective bargaining coverage and the challenges the trade unions face to organise low paid workers, the minimum wage scheme can play an important role in protecting the purchasing power of low paid workers. Moreover, it is often used as a reference for other worker benefits and by informal workers and employers (the lighthouse effect, which refers to the minimum wage used as a reference point for settling wages even in the informal sector).


The main objective of the minimum wage is to improve the welfare of low wage earners. Whether the wage actually achieves its intended purpose is another issue that has been the subject of great controversy for several years, says the ILO.




The following section begins with elements of cross-country comparisons, and then describes the main theoretical predictions of the effects of minimum wages; Finally, the main empirical findings are presented. A large number of studies, both theoretical and empirical, have examined the effects of the minimum wage. Theory provides unambiguous predictions only in relation to a competitive labour market. Empirical evidence provides mixed results, depending on the country, the level of the minimum wage, the existence of a single or several minimum wages, the methods of analysis and the economic model used. Thus, empirical evidence may actually show contradictory findings.


Unemployment compensation can be provided by insurance or assistance schemes. In most European and OECD countries (except, Australia and New Zealand), unemployed people receive unemployment benefits through unemployment insurance (UI) schemes that provide at least partial income replacement, maintain a certain standard of living and provide workers with the means to search for a suitable job during the transition period. Such unemployment benefits are typically funded by contributory schemes and offer compensation related to the previous earnings of the beneficiary after a qualifying period, mostly for a limited period of time.


The income support provided by the unemployment benefit schemes can play an important role in cushioning the social impacts of an economic recession and serve as an important automatic stabiliser during a showdown. In addition, public unemployment assistance systems exist in a number of countries (especially in high income nations) but play only a residual role in closing the relatively small coverage gaps. These are usually not based on prior earnings but are flat rate non-contributory cash transfers to those who are still unemployed, either once their entitlements to unemployment benefits have expired, or when they have never been entitled. Income support to the long-term unemployed and their families is often taken over by general means-tested social assistance schemes.


The absence of unemployment insurance or other statutory income support programmes for the unemployed in most low and middle-income countries has often made mandated severance payments the only available protection in the event of job loss and has led to higher employment protection legislation, at least de jureprotection for those workers in the formal economy. However, while both severance payments and unemployment insurance do provide income compensation to job losers, they arc different instruments with different approaches: unemployment insurance schemes arc worker-oriented (e.g. linked to the individual status of being unemployed), while severance payment schemes arc rather job-oriented (e.g. linked to the specificity of job matches and the value of seniority). Moreover, differences also exist related to their financing and the level of security provided. Severance pay is based on employers’ liability, while unemployment insurance is financed from pooled contributions paid by workers and employers. The latter does not entail any additional financial pressure on ailing enterprises (unlike severance payments, which in practice are often not delivered to workers) and tends to provide protection also for workers with shorter periods of job tenure and lower wage levels. Moreover, severance pay is a lump sum, while unemployment insurance provides periodical benefits, usually for a prescribed duration. Finally, severance pay tends to be more strongly related to the wage level and job tenure in a specific enterprise than unemployment benefits, which affects the level of protection and labour mobility.

Unemployment insurance systems exist, however, in BrazilChina, theRussian FederationSouth Africaand Turkey.




So several countries, typically the Central and South American ones, have introduced hybrid systems to combine these two approaches: various reforms took place in that region during the 2000s to allow individual savings accounts or experience-rated unemployment insurance, which combines layoff taxes paid by firms (a form of employment protection with collective unemployment insurance (for example in Chile from 2002 to 2005 and in the Bolivarian Republic of Venezuela from 2002 to 2005). These private schemes often provide complementary support, such as the Chilean unemployment insurance system which combines the individual capitalisation accounts (unemployment insurance savings accounts, UISA), from which the contributions accumulated by the worker are paid out on Job separation) with a subsidised solidarity fund for those dismissed for economic reasons (to which the employer and the state contribute). Again, it is important to highlight the fact that the UISA, UI and severance pay are not alternative forms of income support and that each instrument has its own features and limits. UISA schemes are based on mandatory individual savings. They are usually marred with extremely low take-up, both for workers and employers, even for those workers in the informal economy with relatively good contributory capacities, and more so for those with low contributory capacities and those who face disadvantages in the labour market (often women and various vulnerable groups). Further challenges linked to private individualised savings options relate to possible regressive effects, low coverage and high administrative costs.


Within the labour market package, the unemployment benefit schemes (contributory and non-contributory) aim at maintaining income levels after losing a job, providing insurance to maintain consumption levels and time to search for a new job. They are part of the labour market regulations that have been argued to drive cross-country differences in labour market outcomes (in particular unemployment patterns). As previously indicated, unemployment compensation systems vary quite dramatically between countries and features with respect to the level of unemployment benefits, their duration and the conditions of eligibility, which may impact both firms' decisions to hire and fire workers in response to changing economic circumstances and employees' decisions to stay or leave their current Jobs. According to theoretical arguments, unemployment benefit schemes provide good income protection to formal sector workers and can help reduce poverty. However, they also suffer from two potential shortcomings: they leave out informal sector workers and can create moral hazard that increases work disincentives and Imposes efficiency costs.


The lesson we may draw from the ILO study is that trade union struggle is the biggest determinant for achieving minimum wage as well as unemployment benefits in the era of neo-liberal globalisation where the capitalist governments would not resort to any labour welfare scheme out of their own volition, as maximisation of profit is the aim of world capitalism.  

( From People's Democracy, 16.6.2013-web address-


Friday, June 14, 2013

Some Quotes from Karl Marx

"Art is always and everywhere the secret confession, and at the same time the immortal movement of its time."

"Religious suffering is, at one and the same time, the expression of real suffering and a protest against real suffering. Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people.
The abolition of religion as the illusory happiness of the people is the demand for their real happiness. To call on them to give up their illusions about their condition is to call on them to give up a condition that requires illusions. The criticism of religion is, therefore, in embryo, the criticism of that vale of tears of which religion is the halo."
"For the bureaucrat, the world is a mere object to be manipulated by him".

"The writer must earn money in order to be able to live and to write, but he must by no means live and write for the purpose of making money".
"In a higher phase of communist society... only then can the narrow horizon of bourgeois right be fully left behind and society inscribe on its banners: from each according to his ability, to each according to his needs".
"The production of too many useful things results in too many useless people"

Thursday, June 13, 2013

Why Modi is elevated and Advani is let down?

Why Modi is elevated and Advani is let down? It is not simply due to any personality clash between them or not simply the internal affairs of the BJP. It is due to the support given by the Indian and Foreign Corporates to Modi. They are now inviting Modi to give lectures on "development". But some time ago both Indian and Foreign Corporates shunned Modi. Why the change?

The economy in India is deteriorating and the problems to the people are intensifying due to the liberralisaation, privatisation, globalisation policies pursued by the Congress and BJP Governments. Both the Governments of Congreess and BJP faced serious corruption charges. People are disenchanted with the leaders of Congress and BJP. That is why the Indian and Foreign Corporates are in need of a new "messaiah" who need not have any policy for the people but can raise emotions in the name of religion, patriotism etc while instigaating communal clashes and at the same time giving enormous concessions to the Corporates in the name of development, which will ultimately destroy the economic condition of the people. On the one hand such large concessions can be given to the Corp orates leading to further deterioration in the economic condition of the people, but at the same time the attention of the people can be diverted in the name of national pride(till now it is Gujarat pride) and religion so that people will not unite and fight against their cruel exploitation by the Corporates.  Modi is found as a suitable person for the Corporates for this purpose. That is why he has become "vikas purush" for the Corporates and their media. 

But the fact is that Gujarat is already a developed state in India before Modi becoming CM and the rate of growth after Modi becoming CM is no better than other States. During 2001-2010 under the rule of Modi, the rate of growth in Gujarat is 8.01% to 8.68%. But AP, Haryana, Maharashtra, Punjab, Tamilnadu and UP have achieved similar rate of growth during this period. Even Bihar achieved above 8% growth in this period. While the industrial growth in Gujarat was 12% during 2005-09, it was 17.53% in Orissa. 
The per capita deposit and per capita credit for Gujarat was Rs 37174 and Rs 24268 where as for Tamilnadu, it was 42,580 and Rs 47964. While the people below poverty line were 19.7% only in Kerala, and 24.1% in Haryana, in Gujarat it is 31.8%. In fact the number of people facing poverty and malnutrition has increased in Gujarat.
Therefore the fact is that Modi is projected for the windfall gains to Corporates at the cost of people and at the same time for diverting the attention of the people by raising communal hatred and false pride in the name of injustice to the nation although such injustice is caused by both BJP and Congresss together.