Vivek's Commentary

Marx, yesterday someone asked me one question. I am asking you the same question  – Do you really think that you are still relevant?  Why do you think I am not relevant today? Vivek, tell me, is capital still being accumulated?  Yes… Thomas Piketty found that the rate of return on capital (r) > growth of the economy (g).  It means capital is still accumulated.  Figure no. 1  Above figure shows that the pure rate of return to capital (after tax and capital losses) r is below the growth rate of world output g for the only period of 1913 to 2012. Now r is greater than g. This itself shows that the capitalist can still accumulate the capital as the rate of return on capital is higher than the economic growth.  Okay what do you think, is profit falling?  Ummm. This I am not sure but it’s very difficult to comment in one word. Few sectors are experiencing fall in profit and few sectors are growing. But yes if the mon...

Traditional theory, H-O trade theory suggests that the country should export the labor-intensive commodity id labor is the abundant factor and if capital is abundant then should export the capital-intensive commodity. But this is now less relevant as the countries are exporting the same product which is imported by the same country. Let’s examine the China India trade pattern. The following table shows the Chinese export to India (top 15 in million dollars) Data source – Export Import Data Bank, Department of Commerce Top 15 Chinese export mainly consists of Electrical machinery and equipment, Nuclear reactor and parts, organic chemical, plastics, light weighted vehicles and parts, optical, mineral fuels, fertilizers, inorganic chemical etc. The most of these products are labor intensive (except nuclear reactor and parts). The following table shows the Indian export to China (top 15 in million dollars) Data source – Export Import Data Bank, Department...

Reserve Bank of India has decided to increase the repo rate by 25 basis point to 6.5 % and reverse repo rate is settled at 6.25% and marginal standing facility rate at 6.75%.  What does MPC say?  The USA economy is growing mainly due to export while in the European Area, the political uncertainty is weakening the economy. Japan is gaining due to the consumer confidence and market sentiments. The emerging economies are not in good shape due to oil price and trade war. The Fed rate increase in June and anticipated of further increase is directing the capital flow to the advanced economy from emerging economy. The stronger dollar is reducing the price of the gold. Retail inflation is increased to 5% in June while headline inflation is increased to 4.6%. The increase in MPC will further affect the inflation. MPC expects the increase in MSP for Kharif crops and good monsoon will increase the demand in the rural area. The volatility in oil price, geopolitical tension...

Karnataka state has witnessed the 6 president's rule. The formation of Karnataka government is highly influenced by Central government. Another interesting thing about Karnataka State is that the state can't digest the coalition government. Coalition government in Karnataka were unable to complete the whole term. Let us see some interesting things. I will divide these article into 3 parts - 1) Same party is ruling at State and Center but Something goes wrong with Party at Center - Karnataka State faced first president's rule in 1971 from 19th March 1971 to 20th March 1972. Veerendra Patil from Congress was Chief Minister of Karnataka, but Congress split in 1969 and Veerendra Patil preferred to be with Congress (O) and therefore government lost the majority in 1971. 2) One party is ruling at state and another party is ruling at Center - In 1977, Karnataka state witness second state emergency. In 1977, Janata alliance managed to win the loksabha election. Janata alli...

The N K Singh's 15th Finance Commission has started the debate over the population criteria. But we are ignoring one thing. Are states using this fund properly? Let's take two states - Gujarat and Maharashtra Before 2017, there was two types of expenditure - planned and non-planned. Planned expenditure of states is the expenditure that comes under center's advances to states for their plan. The expenditure other than planned expenditure i.e. spending to maintain the law and order i.e. spending on police, government offices and departments etc is known as non-planned expenditure. Now let's have a look of planned expenditure of Maharashtra state. Data Source - An author uses data from Reserve Bank of India for given analysis Budget estimates are predicted expenditure based on the analysis of pre-budget trends. Revised estimates are a mid-year estimates based on six months actual trends and predicted expenditure for the balance six months. Accounts are actua...

On 20th March, Indian government in their "HISTORICAL DECISION" granted the autonomy to 60 educational institution (5 Central Universities, 21 State Universities, 24 Deemed Universities, 2 Private Universities and 8 Colleges). Source - Public information bureau of India Human Resource Minister Shri Prakash Javadekar said that UGC will have control over the given institutions but these institutions will have freedom to start the new courses, off campus centers, skill-related courses, research parks and other new academic programs. They are free to hire the foreign faculty and enter into academic collaborations. This looks like India will witness the high quality education, India will witness the research based education etc etc. But I don't think so. Anyway we already have 74 autonomous institutions (This doesn't include the institutions and colleges which are grated the partial autonomy or autonomy for specific department.). But still we haven't seen any majo...

There is tremendous reduction in the power of BJP in Gujarat. One can easily say that by just observing the seats won by BJP. But I am going to use some concentration index to show that. In market, Herfindahl-Hirschman Index (HHI) is used to measure the monopoly power. The range of HHI is between 0 and 1. If HHI is 1 then there is monopoly i.e. one firm has absolute power in given market and if HHI is zero then it means no one has control over the market. HHI is calculated by adding the square of market shares of firms. Now I am going to use this HHI index in political economy to measure the concentration of power. After that I will use Effective Number of Political Parties which is proposed by Laakso, M., & Taagepera, R. (1979) to measure the degree of coalition. (Data source – Election Commission of India)  Now let’s see the HHI and ENP.  (Index has been calculated) Let me explain the trends. Here HHI is reduced from 0.48 to 0.29 in last 15 years. ...