MacroScan - an alternative economics webcentre

A comparison between Modi Government's Ayushman Bharat Programme and Obamacare in terms of coverage and budgetary allocation shows that the prior does not come close to Obamacare, especially with regard to effective coverage. The question of whether insurance-based healthcare system is better than public provisioning of healthcare stands at the heart of an analysis of the scheme in India.

The rise in the short term benchmark interest rates by the Federal Reserve of United States may lead to higher capital outflows for India. This would result in increased downward pressure on the rupee, and with the oil prices rising in light of the sanctions on oil exports from Iran, international borrowing is becoming costlier, and will become even more so in the short to medium term.

The recent eruption of farmers' agitations across India is another case in the current phase of rural discontent. While the anger of the cultivators is being expressed in local, regional and national agitations, the much-hyped official attempts to placate farmers have turned out to be only more jumlas.

In the light Trump's tariffs that are frightening US corporations and European and North American allies along with Japan and China, a report by IMF, World Bank and WTO have produced Reinvigorating Trade and Inclusive Growth. While persisting on "trade reform", the report fails to recognise the arguments about the distribution of gains from trade. In contrast, the evidence-based arguments presented in the UNCTAD's Trade and Development Report 2018 report are telling.

While the rise in oil prices explains the sudden deterioration of the current account balance in India's external payments, it also signals the vulnerability to inevitable shocks that is inherent in the changing structure of India's external trade relations.

The rupee's slide raises the question of whether India's central bank should intervene by selling dollars to prop up the currency. But past experience of such efforts has yielded mixed results, so other measures may be necessary.

The Modi government's claim of ushering in the largest healthcare scheme in the world is completely vacuous. The chosen method of enlarging healthcare access to the poor is wrong both because of the route chosen (the insurance route which benefits insurance companies more than it benefits the patients) as well as because of the ridiculously paltry financial provision.

Falling rupee requires immediate government action. Awaiting an equilibrium that never comes would not only keep squeezing the working people but would eventually make the government run to the IMF and other financial institutions in panic. Measures like raising interest rates, fiscal compression, and using foreign exchange reserves have their own fallouts. There have to be direct restrictions on inessential imports combined with some controls on capital outflows.

A combination of direct import controls on inessential items, reduction of petro-product prices, measures for reducing the consumption of such products, and direct taxation, especially on wealth, is the obvious way of getting out of the tailspin in which the Indian economy is currently caught. There is no alternative to these measures if we are to avoid the fate of countries that eventually run to the IMF and get caught in the vice-like grip of "austerity".

Site optimised for 800 x 600 and above for Internet Explorer 5 and above