There is no sign of recovery from the ‘bubble syndrome’, says Prabhat Patnaik
Noted economist Prabhat Patnaik on Saturday pleaded for putting restrictions on flow of foreign capital, introduction of certain trade barriers to discourage imports and reduce current account deficit (CAD) to help the country tide over the present economic crisis.
The eminent Marxist economist and political commentator, who studied at Delhi School of Economics and Oxford University and taught at Cambridge University and JNU, delivered a talk on ‘current state of Indian economy – role of public sector and insurance industry.’
In his one-hour long address, he highlighted on how opening of the economy had led to dismantling of the public sector and, meted out step-motherly treatment to rural economy by discouraging agriculture. The meeting was conducted by Visakhapatnam Insurance Institute (VII).
A trenchant critic of neo-liberal economic policies, Prof. Patnaik said due to capitalist forces, spending on public health and education were getting slashed. Though public funding of medical insurance in the United Kingdom was good, in the United States, Obama’s Health Care Plan had come under severe criticism for its thrust on buying insurance by citizens.
Recalling his initiative as the Vice-Chairman of Kerala State Planning Board, he said with a note of sarcasm that now perhaps Kerala government pays more than Obama regime towards providing health insurance to the people.
Defending a strong public sector, he touched upon how capitalist forces had antipathy and animosity towards public sector institutes and always put pressure on the powers-that-be for their privatisation under the pretext of boosting investors’ confidence. He said the United States at one point of time exerted pressure on India to privatise State Bank of India. He criticised the call for cutting down government expenditure in core sectors in the name of austerity measures and reducing fiscal deficit to deny funds to public sector. Mr. Patnaik said “neo-liberal economic policies rely on mechanism of bubbles. High growth rate by raising the expectations of the people always lead to collapse of economy.” On present economic crisis in the country, he said there was no sign of recovery from the bubble syndrome as it was a result of an illusion-centric approach. CAD which had raised the concern of many was an offshoot of capitalism and import liberalism. He pointed out how too much importance on imports had made public sector giant BHEL to cut its utilisation by half. “China diyas and crackers are replacing products made by Sivakasi workers. The rupee depreciation will make the country more dependent on foreign goods, making most domestic units sit idle not denying them an opportunity to for capacity addition.” Insurance Institute of India secretary general Sharad Shrivastava, all India council member A.V.R.K. Murthy, and MLC M.V.S. Sarma were among those present.