Despite 'clear signs', Govt of India 'lacks' political will, vision to fight recession

By Our Representative
A two-day conference, organised by three advocacy groups, the Centre for Financial Accountability (CFA), Focus on Global South and Economic Research Foundation, has come down heavily on the Government of India for failing to recognise that the country is slipping into recession, insisting, the biggest hurdle is overcoming the dangers ahead is "lack of political will".
Held at the Institute of Social Sciences (ISS), New Delhi, on the first day, speaking on the theme “Dynamics of the Global Recession: Repercussions on India and the Way Forward”, Dr Thomas Isaac, former Finance Minister of Kerala, said, “The government borrowed money from the International Monetary Fund (IMF) during the pandemic and yet did not spend it in order to keep the fiscal deficit in control."
According to him, "This internalisation of keeping the fiscal deficit under control has prevented the government from increasing spending when people were dying and staving during the pandemic.”
Journalist Paranjoy Guha Thakurta, while releasing his book, "The State of Finance in India Report – 2021 -2022", said, "India cannot be divorced from what is happening in the world, and we are seeing certain signs of the impact of the recession on the country already."
"The handling of the pandemic like demonetisation, is a manifestation of the worst kind of move the government could think of. And what is compounding the situation are the incessant lies", he said.
Speakers called the report the first of its kind, extending the domain of finance and economics beyond the confines of ivory tower experts and inviting writings from a diverse range of academics, policymakers, activists, social practitioners, and economists who are dealing with the issues on the ground.
Focusing on the food crisis, Shalmali Guttal from the Focus on the Global South pointed out that market concentration, financialisation of natural resources, shirking of local food systems, linking food systems to global value chains, and speculative markets have all contributed to the current crisis that has resulted in nearly 811 million people being hungry in Asia.
Prof CP Chandrashekar of the Jawaharlal University (JNU) said, "We are witnessing unprecedented stagflation with two sides of the puzzle where addressing one would exacerbate the other. What countries are doing is increasing interest rates, which is only going to give rise to a political crisis in the coming days".
"We will not be able to move forward unless we accept that this recession is unlike any other, and unless we understand the growth and dominance of finance capital over the real economy, warned", he warned.
The second day of the conference, which focused on the role of the public sector and the changing character of regulatory institutions, rising wealth inequality, the impact on capital-labour relations, and financing cronies, saw Jawhar Sircar, Rajya Sabha member, Trinamool Congress, complain, “In my entire career as a public servant I haven’t witnessed the extraction of public wealth for private profit on the scale that we see today.”

Veteran economist Prabhat Patnaik, while speaking in the session on the topic "Recession to Re-imagination", said, “It is impossible to imagine a way out of this crisis without going beyond neo-liberalism. State expenditure on social services like food, healthcare, employment, etc. has to be seen fundamentally as a right of the people and not the generosity of the state.”
Congress spokesperson Gourav Vallabh insisted, "If we have to fix the economy then the MSME sector needs to be reset completely for job creation". He added, "Spending on the social sector has come down from 9% to 5% after 2014. This has to increase." He suggested market cap based taxes for revenue generation.”
Contrasting with the steps taken by the Latin American countries, economist Jayati Ghosh said, “While there are external constraints in addressing the crisis here, the greater constraint is a domestic one owing to the political choices of India.”
Accountability activist Anjali Bhardwaj said that in a democracy, any re-imagination must have people at the centre of all policy making. There is deliberate policy blindness in the regime, it is clearly working for capital. We need a framework of rights; information necessary for people’s empowerment, she added.
Senior economist Arun Kumar said, international finance capital has the power to keep us divided. The challenge is both internal and external. In order to make change possible, we need thriving socio-economic movements.
Speakers recognized the unprecedented wealth inequality, unemployment and lack of social spending as the major concerns facing the people and spoke of the significance of a wealth tax on the super-rich to be able to spend on the social sector.
The two days conference was attended by students, activists, members of civil society, economists and policymakers.

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