Articles by Prabhat Patnaik

Development in India Prabhat Patnaik Capitalist development in an economy like ours, taking place within the context of particular agrarian relations and a particular power configuration in the world capitalist economy, depends crucially upon the state to widen its market. The ability of the state to do so however is itself limited. The market question therefore gets linked to the ability of the state to generate enough resources to maintain the tempo of its own investment. This ability in turn is determined by the play of class forces in the economy

Gathering Fiscal Crisis Prabhat Patnaik The 1984-85 Budget appears rather bemusing at first sight. The Central Plan outlay is to be stepped up by as much as 25 per cent, but no major tax efforts have been made, And yet the magnitude of deficit financing is estimated not to exceed Rs 1,762 crore, which is less than Rs 200 crore in excess of what was proposed in last year's budget. What then has happened to the fiscal crisis which even the Economic Survey had hinted at? How has the Finance Minister managed his sums so that so much seems achievable with so little effort? The simple answer to this is that there is a great deal of 'window dressing. The impression of fiscal soundness which the Budget exudes is altogether misleading.

There is enough internal evidence in the 1982-83 Budget to indicate that apart from the price increases already decreed, further increases are contemplated and in fact the budget figures are worked out on that basis.

The strategy of the Budget for 1975-76 is quite clear: concentrate your shrinking investible resources mainly on inputs for agriculture; and find the wherewithal for this, if necessary, through a further squeeze on mass consumption rather than on the consumption of the middle and upper classes.

A Theoretical Note Prabhat Patnaik A slowly growing agriculture imposes strict limits to the growth of industry; these limits in a capitalist economy make their presence felt through a process of discontinuous growth, ie, booms and slumps or cyclical movement A boom comes to an end when real wages have been pressed hard enough through a rise in food prices to reduce capacity utilisation; this comes about in the industrial necessaries sector by a fall in workers' consumption and in the other industrial sectors by a fall in investment especially of the government which is sensitive to the political implications of continuing' inflation in food prices; the sensitivity of private investment to capacity utilisation creates a downward spiral leading to a slump; finally the growing unemployment and the stowing down of inflation create conditions for a new spurt of industrial growth as government investment picks up once again and so eventually does private investment.