INDIA

When a State Breaks Its Own Laws!

Subhash Gatade | 25 May 2024

The model of vigilante justice, i.e, bulldozer politics, by the State itself is a phenomenon that has gained fresh legitimacy during the past decade under Modi.

“Under what law can they demolish a house for an offence that hasn’t been proved?”

Former SC Justice Madan Lokur. As properties of #Muslims are demolished by #BJP govts in 4 states, @whattalawyer& @areebuddin14

..police cannot, “under the guise of investigation”, bulldoze anyone’s house without permission, and if such practices continue then “nobody is safe in this country” ..: “Show me from any criminal jurisprudence that for investigating the crime, the police, without any order, can uproot a person, apply a bulldozer. .”

There are interventions of courts which are considered to be ‘breaking new grounds’.

The Gauhati High Court’s judgement in the ‘illegal demolitions’ at Salonabari (May 2022) was one such occasion.

The two-judge bench of the high court led by Chief Justice RM Chhaya and Justice Soumitra Saikia had come down heavily on the demolitions executed without following any procedure and declared such actions ‘illegal’ and compared the police actions akin to a ‘gang war’ and ordered compensation to the victims as well as actions against guilty officials.

Two years later, this issue was again before high courts recently, as the affected families had approached it for the government’s dilly dallying on compensation and actions against officials.

Much water has flown down the Brahmaputra and its tributary rivers during this period.

Today, it might be difficult to imagine how this judgement (2022) had suddenly acted as a ‘dampener’ to the bulldozer mania which had then caught on.

Starting from Uttar Pradesh followed by Madhya Pradesh, Gujarat and later Assam and Karnataka -– all Bharatiya Janata Party-ruled states – police were found to be increasingly resorting to similar vigilante justice.

No questions asked, no wait for court cases to finish, no need to engage in legal formalities

Be it a case of running away of adult couples or somebody being in conflict with law, or even in cases of communal violence, police was found to be increasingly resorting to similar actions.

Forget the fact that as per Constitution ‘due process’ has to be followed in any case; or how Article 300A underlines that “No person shall be deprived of his property save by the authority of law” the demolition spree went unheeded.

What was rather disturbing was that despite facts coming to the fore, such arbitrary state action was violating the settled principles of natural justice, such as the right to be heard and the right to prior notice, and the judiciary had preferred to maintain an ambivalent stand on such illegal demolitions.  Despite a petition by an all-India organisation committed to minority welfare, the highest court did not even grant interim stay to such a demolition spree, mainly in Muslim majority areas (Frontline – September 9, 2022; Disturbing Signals, Page 18)

No doubt, in this ambience, the suo motu intervention of the Gauhati High Court was a breeze of fresh air.

Close on the heels of this intervention (May 2022), the Patna high court also had condemned the use of bulldozers by Bihar Police for demolishing the house of a woman without following the due process of law. When the petitioner alleged that the illegal demolition was carried out at the behest of some land mafia, the single-judge bench of Justice Sandeep Kumar said: “Is the bulldozer being run here too?” It then asked the police: “Whom do you represent, the state or some private person? You are creating a scene by demolishing anyone’s house with a bulldozer.”

After a cursory glance at the rapidly changing scenario, it can be said that the ‘dampener effect’ of the said judgement has just evaporated in thin air.

The Assam government did report  to the HC that it had given compensation in the Salonabari case, but despite the fact that the HC mentioned how a government-appointed committee had admitted that death of a fishseller Safiqul Islam from the village  was a ‘custodial death’, quoted in it was refusing to admit it so.

The fear and terror of the bulldozer seems to have made a rapid comeback.

For example, there were allegations raised by residents of a Muslim-majority village in Assam’s Karimganj parliamentary constituency about how they were being intimidated by forest department officials to vote for BJP or get ready for eviction with the help of bulldozers. To save themselves from any such eventuality, they had even approached a local court against these forest department officials.

The ‘bulldozer mania’ in BJP-ruled states seems to be back with a bang.

The state of Uttarakhand presents before us a special example.

It was only last year that the Supreme Court had stayed Uttarakhand HC’s Haldwani demolition order when residents of Banphoolpurwa, Haldwani, had approached it.

What had impressed the Supreme Court was that thousands of these people -- a large section of them belonging to minority communities -- had been living besides the railway lines for decades together, had proof of residence as well, in the form of ration cards etc., and as per Article 14 of the Constitution, it would be transgressing their fundamental rights if they were uprooted without making any alternate arrangements. The people had even launched a peaceful mass movement to defend their rights.

A year later a demolition operation undertaken by the district administration of an ‘illegally built madarsa mosque’ in this very area - under debatable circumstances - has resulted in violence leading to deaths of five people and injuries to many which includes few police persons as well. (February 8). The scenario has completely changed

Civil liberty activists, writers had questioned the big hurry to demolish these two ‘illegal structures’’, when both these structures were already in possession of the police and the matter was before the high courts, which was to deliberate over it on February 14. A section of media had also said that the administration allegedly lacked any order by the court to demolish these structures.

Inadvertently or so, the demolition operation in Haldwani has brought into short focus not only the workings of the state government but how it has fared since the past few years when it comes to defending minority rights.

The picture that emerges is not very encouraging.

It was November 2023, when Scroll had done a story titled, ”How state-backed Hindutva rhetoric is fuelling the ethnic cleansing of Uttarakhand’ penned by retired IAS officer Harsh Mander, which tells us about the ‘unprecedented turmoil’ through which the hill state is passing through where ‘[a]n influential and popular campaign for ethnic cleansing has gathered ominous momentum: a battle for the expulsion of all Muslims from the state. This crusade is tacitly supported by the state government.’ (-do-)

It mentions how under the name of ‘mazaar jihad’

[t]he state administration dismantled many of these 1,000 mazaars, unmindful that these were places sacred to local Muslims – and many Hindus – many more than a 100 years old. Caravan reporters write of Thapli Baba ki Mazar, a mazaar estimated to be a 150 years old. The caretaker of the mazaar said that they were not even given the chance to collect the remains of the body that had been laid to rest there. The majority of the devotees of the mazaar were Hindu. What were razed as mazaars in the forests were also small graves of the forest dwelling Van Gujjars. On forest lands, the administration also encountered Hindu temples, but these were not described as the outcome of any conspiracy or jihad.(-do-)

It would be cliche to say that demolitions in Haldwani/ Uttarakhand are no exception. It is part of the pattern in various BJP-ruled states since the past five years or so.

At the end of January 2024, Meera Bhayandar area in Mumbai witnessed similar targeting a of Muslim-owned properties when there was some conflict on the streets between fanatic elements on either sides.

It was during the same period that a teen arrested by the police on fabricated charges of ‘spitting on a religious procession’ was released by the MP High Court, after spending six months in jail when the complainant and witness in the case turned and denied police claims. What was shocking to know is that the day he was arrested by the Ujjain police, the house where he lived, which was built by his parents, was demolished by the police.

Much to the chagrin of the ruling dispensation, the punitive demolitions in BJP-ruled states’ have slowly become a cause of concern for human rights groups at the international level also. The release of two damning reports by Amnesty International is a testimony to this concern.

Titled “India: “If you speak up, your house will be demolished”: Bulldozer injustice in India, the first report has analysed the punitive demolitions of 128 properties in Assam, Delhi, Gujarat, Madhya Pradesh and Uttar Pradesh following episodes of communal violence and protests between April and June 2022.

It describes how ‘The targeted demolitions were instigated by senior political leaders and government officials and impacted at least 617 people ‘and how ‘almost two years later, Muslim families and business owners in the five states await compensation for losing their homes, businesses and places of worship. The Indian government’s de-facto policy of punitively demolishing Muslim properties for protesting discriminatory laws and practices, is an on-going phenomenon. This amounts to forced eviction and collective and arbitrary punishment under international law and must be immediately investigated.’

Whether there will be a let-up in the situation, is difficult to say.

The fact that this ‘colonial era method of collective punishment’ made a comeback when India was preparing to celebrate its 75th year of Independence is definitely a cause of concern.

What needs to be understood is that this model of vigilante justice by the state itself is a phenomenon that has gained new legitimacy during this decade of Modi regime

Such State-powered vigilantism is evident everywhere.

Recall how during the anti-CAA (Citizenship Amendment Act) anti-NRC (National Register of Citizens) movement – the Uttar Pradesh government led by Yogi Adityanath had issued recovery notices to people without similarly following any rule of law or method. Ultimately, it had to withdraw all such notices and even return the money of compensation it had taken from the people as fine.

It was Kheda in Gujarat (2022) when policemen there had tied Muslim men to poles and beat them openly on some complaint. This event had caused a state-wide uproar, which prompted the Supreme Court to intervene in the case. (January 24, 2024) Punishing the policemen for their act, it specifically asked the guilty policemen, under what law they had got this power of flogging.

What should not be forgotten is that the myth of invincibility that this government has woven around it, stands punctured.

A new alliance of Opposition parties committed to defence of the Constitution is unitedly carving out a new path to recover the old India where rule of law would prevail.

A new era of possibilities has opened up before us.

Whatever be the outcome of the Lok Sabha elections, the only possible way to stop such illegal and unjust actions is the unity of the people who are ready to say such actions cannot be done “in our name.”

It is time that peace, justice loving people of this country, especially the younger generation, who dream of living in a more equitable, harmonious world, take inspiration from the likes of Rachel Corrie, an American peace activist.

It was 2003, when a 23-year-old Rachel Corrie was crushed under an Israeli bulldozer when she was protesting the demolition of Palestinian homes in Southern Gaza.

Her sacrifice on a land which was foreign to her for the defence of the vulnerable, should inspire all.

We should raise our voice in unison and roar, ‘NOT IN OUR NAME’.

The writer is an independent journalist. The views are personal.

 

Why Claims of Poverty Decline are Spurious

Utsa Patnaik | 25 May 2024

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The official method has meant repeatedly under-estimating poverty lines over time. If an examination pass mark reaches zero, there will be zero failures.

The media has been full of claims by the World Bank and by governments that millions of people in the Global South have been lifted out of poverty during the past three decades that saw neo-liberal economic policies. The NITI Aayog in a press release earlier this year, claimed near-zero poverty for India by 2022-23, affecting only 5% of the population.

The hard data on nutritional intake show, however, that hunger has risen greatly over the past three decades, with more than two-thirds of its rural and urban population unable to spend enough to satisfy minimum needs of calorific and protein intake; India’s very low ranking (111 out of 125 countries in 2023) on the Global Hunger Index continues, and while some health indicators have improved, others have worsened.

Those who believe the official claims say, ‘how can hunger have increased when poverty has declined?’ The question should be the opposite, namely ‘how can poverty have declined when hunger has increased?’

The information on the rise in hunger is direct, based on readily available and verifiable statistics, compared with official poverty estimates that are based on illogical and non-transparent calculation methods, rendering quite spurious the claim of massive poverty decline. The illogical method has the blessings of the World Bank which repeats the spurious claim of poverty decline.

Why is the official method illogical, and the conclusion of poverty decline spurious? Because its method has meant repeatedly under-estimating poverty lines over time, leading to a lowering of the nutritional intake that can be accessed at these poverty lines. The poor have been counted below a standard that itself has been allowed to decline; but for any valid comparison over time, the standard must be held constant.

If a school claims great success in lowering, over a period of 30 years, the proportion of failures among students taking examinations, from, say, initially 55% of all students failing to only 5% failing, we are hardly likely to believe the claim when we find out that over the same period the pass mark has been quietly lowered from 50 out of 100 in the initial year, to 15 out of 100 by the terminal year. Applying a constant 50 out of 100 pass mark, we find the failure percentage has risen.

Similarly, official claims of poverty decline carry no conviction when we see that compared to the official nutrition norms of 2,200 calories rural and 2,100 calories urban actually used to obtain poverty lines in the initial year 1973-74, in a large number of states over the next four decades the energy intake accessible at official poverty lines had declined to 1,700 calories or less and protein intake, which is highly associated with energy intake, has also declined.

According to the Tendulkar Committee poverty lines (being followed at present by the NITI Aayog), in rural Gujarat in 2011-12, the poverty ratio was 21.9% at its per head monthly poverty line of Rs 932. But we find that energy intake at this level was only 1,670 calories, while obtaining 2,200 calories required spending Rs 2,000 or over double the official poverty line, and 87% of persons fell below this level. Official poverty at 21.9% and real poverty at 87% is no mean order of difference.

In rural Punjab, the low 7.71% official poverty ratio was at a sum that gave 1,800 calories daily, while the true poverty line at which 2,200 calories could be reached, was much higher with 38% of persons falling below it.

In 2009, in rural Puducherry, the official poverty ratio was near-zero at 0.2% solely because the very low poverty line allowed only 1,040 calories per day – a starvation level, whereas the actually poor unable to reach the 2,200-calorie norm, comprised 58%. Here the official poverty line was pitched so low that below it there were no observations, since people were dead. Urban poverty similarly shows high and rising poverty compared with the decline in official estimates.

The NITI Aayog’s claim of only 5% in poverty in 2023-24, relies on the 2011 Tendulkar poverty lines price-indexed to 2023-24. Taking the highest consumption spending under the Modified Mixed Recall Period, and using the price index data in the official Fact Sheet, the poverty lines when brought forward to 2023-24, are Rs 57/69 daily per head for rural/urban areas. The food part accounts for Rs 26.6/27 and the non-food part for Rs 30.4/42 rural/urban, respectively, taking the average shares spent on food and non-food.

The food part would have bought 1.3 litres of the cheapest bottled water, with nothing left over for food (the poor do not actually buy bottled water, the example is to illustrate how paltry the food sum is).

To think that minimum non-food daily needs of a person however poor on account of rent, transport, utilities, healthcare, and manufactured goods (leave alone education and recreation) could be met by Rs 30.4 rural to Rs.42 urban per day, requires a degree of disconnect from objective reality that no rational individual can display, only the official estimators seem to be capable of it. Their so-called poverty lines are destitution-cum-starvation lines, with 6.6% of rural and 1.6% of the urban population still somehow surviving at sub-human existence levels, producing the 5% overall average claimed to be in poverty. The true poverty lines at which minimum nutrition could be obtained were at least 2.5 to 3 times higher.

In another three years at most, officially ‘zero poverty’ is likely to be claimed, because the official poverty lines would have been further lowered to a level where there will be no survivors. If an examination pass mark reaches zero, there are zero failures.

Far from declining, the share of the actually poor in both rural and urban population has risen noticeably over the past three decades. In 1993-94, the poor comprised 58.5/57% in rural/urban areas since they could not reach nutrition norms of 2,200/2,100 calories per day, while by 2004-05, the respective rural/urban poverty ratios had risen to 69.5/65%. After a large spike in the drought year 2009-10, there was a decline by 2011-12 to 67/62%.

The 2017-18 nutrition intake data were not released, but the intakes can be conservatively approximated (by deflating food spending in the later year to 2011-12 and applying the food cost per unit of nutrients) and this shows a sharp rise in rural poverty to over 80% of the population, while urban poverty remained at about the same level as in 2011-12. The full data for 2023-24 are still to be released but in view of the pandemic-induced economic slowdown and rising unemployment, the true poverty levels are likely to have remained high.

The conceptual muddle that governments and the World Bank have created for themselves, and their resulting false claims of declining poverty, is the outcome of a simple logical mistake. They first correctly defined the poverty lines on the basis of nutrition norms in the initial year, and then for every succeeding year improperly changed the definition, de-linking it from nutrition norms; and they have done this for every country.

In 1973-74 in India, the monthly spending per head required to access daily 2,200 calories in rural and 2,100 calories in urban areas, were Rs 49 and Rs 56.6, giving the respective official poverty ratios of 56.4% rural and 49.2% urban. This definition of the poverty line directly using nutrition norms was never again applied even though the needed current data on nutritional intake, has been available every five years.

Instead, these particular 1973 poverty lines were simply updated to later years using price indices as has been explained, without ever asking whether nutrition norms continued to be reached or not. To start thus with one definition of poverty line and quietly switch to another completely different definition means committing a logical fallacy, the fallacy of equivocation. This fallacious method meant that the particular basket of goods and services available and consumed in 1973-74 was held fixed – by now it is 50 years in the past – with only its cost being price-indexed to the present.

In reality, however, the actually available basket of goods and services has been changing especially rapidly over the past three decades of neo-liberal market-oriented reforms (much more rapidly than the weights assigned to different items in price indices can be changed) because of increased privatisation and market pricing of goods and services.

A basket being fixed for 50 years assumes away real trends in poverty, for whether people remain at the same level of poverty, get worse off or get better off, depends crucially on whether and in what ways the initial basket of goods and services is changed.

Historically, poverty was reduced greatly or eliminated entirely by State policies in those countries where healthcare, education, and to a large extent, housing and utilities were removed from the sphere of market pricing and were instead treated as public goods, using the budget to provide entirely free health care and compulsory free education for children, or only nominal charges were imposed.

State-financed construction of affordable low-cost housing with low rents, and nominal charges for public transport and for utilities (water, energy for lighting and cooking), freed up a larger share of the family budget for buying food, manufactured necessities and spending on recreation. Such provision of public goods was not only typical in the socialist countries in Asia and Europe; it was also undertaken in the post-World War II period in almost all the West European capitalist countries.

The converse happened, the available basket of goods and services changed drastically to the detriment of consumers, with the introduction of market-oriented economic reforms in the countries of the Global South because these measures substantially or entirely removed healthcare, education and utilities from the category of public goods and into that of market pricing.  The resulting spike in these charges impacted adversely the income available to the majority of the population for spending on food and manufactured necessities, pushing more people into nutritional stress.

Unwise specific policy measures, like the 2016 currency demonetisation, or the impact of the 2021-22 pandemic-induced recession, have aggravated the poverty problem no doubt, but are not the basic causes of rising poverty, which long predates these events. 

It is not a difficult proposition to substantially reduce poverty through redistributive measures. About one- tenth of India’s GDP would need to be devoted to providing adequate food for the population, basic and comprehensive healthcare, compulsory free education, employment guarantee and old age pension; for which additional taxation of 7% of GDP that the rich and super-rich can easily bear, would be needed.

Combined with vigorous implementation of the existing National Food Security Act 2013 and the MG National Rural Employment Guarantee Act, genuine large-scale reduction of poverty would result.

But an essential precondition for this lies in the realm of concepts that guide empirical work and the inferences based on them: the incorrect measurement of poverty that has been prevalent not only nationally but internationally, has to be abjured, and the false claims of poverty reduction replaced by factually and logically correct estimates.

Utsa Patnaik is a Marxian economist. She is professor emeritus, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi. Her book ‘Exploring the Poverty Question’ is in press. 

Global People’s Health Movement Calls for New Economic, Political, Social order

Wim De Ceukelaire , Ana Vračar

 | 08 Jun 2024

At a recent global gathering, hundreds of health activists committed to uniting the health movement with other progressive social movements. Their aim is to form a broad coalition for radical change to counter the crises of capitalism and imperialism.

Photo via People's Health Movement

Hundreds of health activists gathered in Mar del Plata, Argentina, in April to reinvigorate the struggle for health rights. This fifth global assembly since 2000 underscored the enduring vibrancy of the People’s Health Movement (PHM), a prime advocate for health as a human right for all.

Established after the first People’s Health Assembly in 2000, PHM is a global network of activists, social movements, and organizations advocating for health as a fundamental human right, promoting comprehensive primary health care, and striving for equitable health systems.

The fifth People’s Health Assembly featured plenary sessions, sub-plenaries, and interactive workshops focused on five key themes: resistance to war, occupation, and forced migration; traditional ancestral and popular knowledge; gender justice in health; transformation of health systems; and ecosystem health.

“At the heart of our assembly lies the power of people’s movements. Hearing the testimonies of those at the forefront of struggle ignites a fire in our collective spirit, reminding us of the resilience and solidarity that fuels our journey towards health for all,” said Carmen Baez from the local organizing committee during the opening ceremony.

The assembly faced challenges due to Argentina’s new Milei government imposing radical neoliberal policies and the ongoing Israeli genocidal war on Palestine, which complicated travel for several delegations.

Palestinian delegates contributed via video link, with prominent activist Mustafa Barghouti detailing the severe impacts of Israeli attacks on the health system in Gaza. “Today, many countries and free peoples of the world stand in solidarity with the Palestinian people in their tragedy and fight alongside our people to stop the war and support their rights. We ask you to stand on the side of all the free voices in the world,” PHM Palestine asked the assembly in a plea that was met with a standing ovation.

Vivian Camacho, Bolivia’s National Director of Traditional Medicine, emphasized the integration of Indigenous perspectives and needs into Western medical systems. “People’s lives are about our deep identity and cultural resilience. Traditional ancestral medicine is about a deep historical cultural resistance to colonialism, to the violence that has been used against us, to the usurpation of our territories, to the massacre of our peoples,” she said.

“Feminist solidarity locates us in a framework of mutual support,” said Sonia Gutierrez from the Winaq Political Movement in Guatemala, highlighting the potential of women’s struggles to contribute to Health for All. “For the liberation of women, of the peoples who have been conquered, we must free ourselves from historical oppression,” she added. The road to achieving such liberation lies in building a joint social movement representing the existing achievements of feminist struggles and will be built upon the solidarity and unity they already include.

Matheus Falcão from PHM Brazil highlighted that the assembly not only discussed problems but also showcased successful struggles in the fight for health. “In Brazil, we established a system of universal access to health care, achieved through a process we call the Health Reform that took place in the 70s and 80s,” he said. “This is an example of how these achievements are the fruits of people’s struggle, taking the perspective of… communities into account.”

More struggle, unity needed to achieve health for all

The assembly culminated in a Call to Action, developed through a participatory process and emphasizing the need for radical change to counter the crises of capitalism and imperialism. The document calls for replacing the capitalist mode of production, consumption, and life with a system based on sovereignty, self-determination, equality, and cooperation between nations.

According to the document, only a radical change that replaces the mode of production, consumption, and life generated by capitalism can reverse the destructive trends of exploitation and extractivism. “We believe the new economic order should be based on the sovereignty and self-determination of peoples, and equality and cooperation between nations, and on solidarity and peace,” it explained, adding that people’s control and ownership of the necessities of life needs to be restored.

Referring to the movement’s theory of change, the Call to Action states: “Transformation of the transnational and imperialist capitalist system to a new international economic, political, and social order will only happen through the joint action and solidarity of social movements, progressive political parties, and nation-states. Class struggle will be a vital part of this action.”

The Call to Action emphasizes the need for national processes that drive economic, political, and social transformation, including progressive reforms in health, education, agroecology, food, energy, and labor. These reforms aim to reduce or eliminate unjust inequalities and create an environmentally sustainable economy. To achieve this, PHM country circles will collaborate with communities to develop locally appropriate solutions to counter neoliberalism and imperialism.

In its conclusion, the Call to Action aims to unite the health movement with other progressive social movements, creating a broad front to establish a new international economic, political, and social order. The PHM also aims to seek alliances with political parties and states that promote this new international economic order.

Wim De Ceukelaire is a health and social justice activist and member of the global steering council of the People’s Health Movement. He is the co-author of the second edition of The Struggle for Health: Medicine and the Politics of Underdevelopment with David Sanders and Barbara Hutton.

Ana Vračar is a health reporter at the People’s Health Dispatch, a fortnightly bulletin published by Peoples Dispatch and the People’s Health Movement. She is the regional coordinator of PHM Europe and Co-Chair of the PHM steering council.

This article was produced by Globetrotter.

Unemployment: Reflective of Demand-Constraint System

Prabhat Patnaik | 08 Jun 2024

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Its alleviation requires as an immediate measure a rise in aggregate demand, led by government spending.

A distinction is drawn in economics between demand-constrained systems and resource-constrained systems (which for simplicity and symmetry we shall call supply-constrained systems). In the former, an increase in output can occur if there is a rise in aggregate demand without causing any scarcity-induced inflation. In the latter, output is constrained either by capacity being fully used up, or by the scarcity of some critical input or of foodgrains or of the labour force, so that a rise in aggregate demand, instead of raising output, simply causes scarcity-induced inflation.

Capitalism normally, that is, except in war times, is a demand-constrained system, while socialism that existed in the Soviet Union and in Eastern Europe was supply-constrained. In a demand-constrained system, employment too will rise if there is an increase in aggregate demand.

This distinction is important to keep in mind at present in India when unemployment has become a serious social issue, when its acuteness has been a major factor behind the Bharatiya Janata Party’s humbling in the recent elections, and when its alleviation has become a matter of absolute priority.

Since there has been substantial deliberate curtailment of employment in the service sector, including government services, where shortage of fixed capital stock has played no role, we cannot hold any capacity constraint responsible for the current level of unemployment.

Likewise, the current level of unemployment is not due to the shortage of any critical input. Foodgrains, too, have not been in short supply, as is evident from the fact that even the Narendra Modi government, which debunks transfers to the poor as “freebies”, has been using up existing stocks to acquire some electoral goodwill by providing 5 kg of foodgrains per person per month to a large number of beneficiaries.

True, at this moment India is about to buy wheat in the international market to replenish depleted stocks, but this is due to mismanagement, not any basic scarcity of the grain in the country.

The acute unemployment we have in India at present, therefore, is reflective of a demand-constrained system; its alleviation requires as an immediate measure a rise in aggregate demand, led by government spending.

There are large numbers of government jobs remaining unfilled; the education sector is understaffed to an amazing extent, which is taking a heavy toll on the quality of teaching; even the armed forces have not seen their usual scale of recruitment because of which all kinds of schemes, like the Agniveer scheme, have been introduced.

The government, in short, instead of taking a lead in providing employment, has ironically been cutting down on employment; the reason lies apparently in the fact that it feels fiscally constrained. Let us examine this a little more closely.

The basic distinction we mentioned above is between demand and supply-constrained systems. Other than supply constraints, which we just saw do not exist, there is no such thing as an objective fiscal constraint on a sovereign state. Any such fiscal constraint is imposed upon the State by international capital and its local counterpart, the domestic corporate-financial oligarchy; it is reflective of a loss of autonomy on the part of the State, not of any objective limits on the State.

The fact that in a demand-constrained system there are no objective limits on the capacity of the State to spend was demonstrated in the economic literature more than ninety years ago when the Kaleckian-Keynesian theoretical revolution had got going; and yet the false theory that had been debunked over nine decades ago is still resurrected today to pass off what are in effect constraints imposed by big business on the State as objective limits on the State. The pre-eminent requirement for alleviating unemployment is that the State must shake off its thraldom to the caprices of international and domestic big capital; it must re-acquire, and act on, its resolve to serve the people.

In a demand-constrained system larger government spending even if it is financed by a fiscal deficit still overcomes unemployment; its main harmful effect arises not because of any “crowding out” of private investment or other such bogus claims made against it, but because it gratuitously increases wealth inequality. If the government spends, say, Rs100, and finances it by a fiscal deficit, that is, by borrowing, then, in effect, it puts the Rs100 in the hands of the capitalists through its spending (since the working people more or less spend what they earn), and then borrows it from them.

This is easily seen if we break up the economy into three mutually exclusive and all-exhaustive parts: the government, the working people, and the capitalists (let us for simplicity abstract from all external transactions by assuming a closed economy). The deficits of the three parts must necessarily, as a mathematical identity, add up to zero in any period. Since the working people generally consume whatever they earn, their deficit (or surplus) is zero, if the government runs a deficit then it must automatically create an equivalent amount of surplus with the capitalists without their doing anything consciously about it. If the government spends by borrowing the Rs100 from banks to start with, then by the end of the period it can borrow the Rs100 of surplus from the capitalists that would have gratuitously accrued to them, and pay back the banks.

This surplus accrues to capitalists because of the larger demand for their goods generated by government spending. It is a gratuitous addition to their savings and wealth, and hence accentuates wealth inequality. 

To prevent such accentuation of wealth inequality, the government should tax away these Rs100 from them, and finance its spending by an equivalent tax on the capitalists, which does not even reduce their wealth compared to the initial situation. It follows that larger State spending financed by taxing the capitalists can increase employment without even impinging on the capitalists whose initial wealth remains unchanged.

The State must have the courage to expand its expenditure and be prepared to face whatever road-blocks the domestic and foreign capitalists place against its actions (in the form for instance of capital flight) if it wishes to increase employment.

Expanding employment, therefore, requires, first, a filling up of all vacancies that exist within the government including of teachers at the school and university level, and of healthcare and nursing staff.

Second, it requires an increase in the number of posts in these sectors; education in the country, for instance, has reached abysmal levels and it needs revival through an appropriate expansion of qualified staff.

Third, it requires expanding the scope of the Mahatma Gandhi National Rural Employment Guarantee Scheme by removing its existing limits and making it universal and demand-driven; it should also be extended to urban areas and wages must be fixed at appropriate levels, well above the pittance currently being paid.

This itself will generate demand for a whole range of goods in the economy which will be met partly through a greater utilisation of existing capacity and hence through greater employment, and partly through the setting up of new capacity, including above all in the small-scale sector (for which appropriate arrangement of loans must be made). The provision of employment by the government in other words will create additional employment in the private sector through what is known as the “multiplier”.

As discussed above, this entire increase in State spending will have to be financed through larger taxes on the capitalists and the rich in general. Such taxes can be on their flow incomes or on their stocks of wealth.

Of the two, however, a tax on their wealth, which includes real estate and cash balances that earn no significant direct income, is preferable, for it then cannot even be said to have any adverse effects on productive investment. Of course, any wealth taxation must be accompanied by inheritance taxation to prevent evasion of the former.

What is shocking is that India has virtually no wealth or inheritance taxation, even when wealth inequality in the country has skyrocketed during the neoliberal era. This reprehensible fact, however, also implies the existence of immense scope for imposing wealth and inheritance taxation.

An increase in government expenditure financed by larger wealth and inheritance taxation provides the easiest and most direct route to the generation of larger employment in the economy. It will kill several birds with one stone: provide larger employment, keep wealth inequality in check which is essential for democracy, and improve the state of education and healthcare in the country from the abysmal levels to which they have sunk.

UNSC adopts US-drafted resolution on Gaza ceasefire

Agencies Published June 11, 2024 

US Ambassador to the United Nations Linda Thomas-Greenfield (C) votes during a UN Security Council meeting on the situation in the Middle East at UN headquarters on June 10, 2024 in New York. — AFP

• Fourteen votes in favour of resolution as Russia abstains

• Washington mulls talks with Hamas for release of its citizens

UNITED NATIONS: The United Nations Security Council on Monday adopted a US-drafted resolution supporting a ceasefire plan in Gaza, as Washington leads an intense diplomatic campaign to push Hamas to accept the proposal.

The text — passed with 14 votes in favour and Russia abstaining — “welcomes” the truce and hostage release proposal announced on May 31 by President Joe Biden, and urges “parties to fully implement its terms without delay and without condition.”

The resolution says Israel has accepted the truce plan, and “calls upon Hamas to also accept it”.

Hamas in a statement, referring to its demands that include a permanent ceasefire in Gaza and a complete withdrawal of Israeli forces from the territory said it “welcomes the Security Council resolution … (and) would like to reaffirm its readiness to cooperate with the brother mediators to enter into indirect negotiations regarding the implementation of these principles”.

The United States, a staunch ally of Israel, has been widely criticised for having blocked several previous UN draft resolutions calling for a ceasefire in Gaza. But Biden late last month launched a new US effort to secure a truce and hostage release.

“Today, we voted for peace,” US ambassador Linda Thomas-Greenfield said after the UN session.

The first phase of the truce would see an “immediate, full and complete ceasefire,” the prisoners exchange, and the “withdrawal of Israeli forces from the populated areas in Gaza”. This would also allow the “safe and effective distribution of humanitarian assistance at scale throughout the Gaza Strip to all Palestinian civilians who need it”.

US Secretary of State Antony Blinken earlier held talks with Prime Minister Benjamin Netanyahu and Egyptian President Abdel Fattah al-Sisi on Monday.

His visit comes after US President Joe Biden on May 31 outlined a three-phase ceasefire proposal from Israel that envisions a permanent end to hostilities, the release of Israeli and Palestinian prisoners, and the reconstruction of Gaza.

American prisoners

US officials have considered negotiating a unilateral deal with Hamas to release five American prisoners held in Gaza if ceasefire talks involving Israel fail, NBC News reported on Monday.

It was not clear what the United States might offer Hamas in exchange, according to the report, which cited two current and two former US officials. The United States says Hamas is holding five Americans who were taken hostage in the group’s Oct 7 incursion inside Israel, NBC reported.

Antony Blinken, asked about the report as he left Cairo, said, “The best way, the most effective way to get everyone home, including the American hostages, is through this proposal, is through the ceasefire deal that’s on the table right now.”

Any unilateral talks would be conducted through Qatari negotiators and would not involve Israel, the unidentified officials, who have all been briefed on the negotiations, told NBC.

The officials said Hamas would have an incentive to reach such a deal with Washington because it would strain US-Israel relations further and add pressure on the Israeli prime minister, who has been criticised at home for not doing more to get the hostages out.

Published in Dawn, June 11th, 2024