Two Decades of Manmohanomics
Two Decades of ManmohanomicsThis is nothing but a convenient name for the Indian version of neoliberalism, which has been developed since the 1990s by a host of bourgeois ideologues, bureaucrats and political parties in sync with international trends and domestic conditions.
ABOUT a decade after US President Ronald Reagan flagged off the Neo-liberal Express from Washington DC, it finally reached New Delhi in 1991, with Finance Minister Manmohan Singh at the driver’s seat. Just as in the 1950s and 1960s the strong appeal of socialism in India and abroad was utilised by the bourgeois-landlord state to give a socialist tinge to the “mixed economy”, so the new set of reforms drew legitimacy from the neoliberal TINA (There Is No Alternative) gospel.
As the crowning glory of this policy regime, people often talk of the exceptionally vibrant growth achieved during 2003-04 to 2009-10. Not only in terms of GDP growth but on some other in dices too, new ground was really broken. Growth was no longer restricted to the services sector, but after a long gap extended also to manufacturing. Savings and investment grew at unprecedented rates. Along with liberalization of import and foreign investment rules, in certain sectors technology improved too. This served to intensify competition and led to major improvements in productivity. Indian corporates were reaching out to foreign lands with great gusto – no longer only to underdeveloped countries but to advanced economies as well – mainly through the merger and acquisition (M & A) route though.
How a Mini Bubble Was Generated
To a significant extent the high growth was an externally induced (rather than internally generated) phenomenon. After China, India had become one of the most favoured destinations of financial inflows while many other developing countries also had a similar experience. In our case this was largely facilitated by concessions offered to indigenous and foreign investors. One major step was the abolition of the long-term capital gains tax in the 2003-04 Budget, which for all practical purposes converted India’s equity market into a tax-free enclave and led to a surge of investments from foreign institutional investors (FIIs) and others. The surge was more or less maintained in subsequent (until recent) years. That the exchequer lost an important source of revenue in the capital gains tax was, needless to say, nobody’s concern.
The enhanced inflow of foreign capital was mostly in the nature of footloose financial investments in the bourses and in speculative activities in commodity markets and to some extent also in the real estates sector. This component, while contributing to the growth of GDP, stimulated the real productive sectors of the economy to a very limited extent.
However, the liquidity generated by large inflows of foreign capital made credit cheaper, which in its turn stimulated industrial growth in at least three ways. First, it financed purchases of auto-mobiles and triggered an automobile boom, further facilitated by expansion of highways and expressways. Second, it financed a boom in investment in housing and real estate, thereby promoting the production of construction materials and generating large number of (casual) jobs. Third, people in upper income brackets were getting rich quicker, for many of them effective income tax rates were falling, and happy with the opportunity to purchase large varieties of imported and indigenous consumer durables, apartments, etc. with borrowed money, they were on a spending spree, contributing to the expansion in demand for “lifestyle products”. All these were reflected in a rapid rise in the share of personal loans in total bank credit. Expansion in debt-financed consumption and investment was thus an important proximate cause behind GDP growth.
A second factor might be located in export growth in certain segments like software, petrochemicals, metals, gems and jewellery etc. Much of the export boost came from extraneous causes, i.e., from favourable changes in world market conditions not related to India’s economic performance. For example, the growth in iron and steel industry – including the highly polluting sponge iron segment – and consequently, also in coal and iron ore extraction, was largely induced by a surge in global demands caused by, inter alia, the construction boom in China in preparation for the Beijing Olympics.
To an extent the growth in exports resulted also from better competitiveness: according to the Global Competitiveness Report 2005-06 prepared by the World Economic Forum, India moved from the 55th Place in the world in 2004 to the 50th the next year in the Growth Competitiveness Index. This was particularly true of software exports, which grew from less than $1 billion in FY 1996 to nearly $23 billion in FY 2005 and more or less maintained the growth until recently. This has been the main driver behind the sharp rise in services exports as a whole, where India’s comfortable position as a net exporter helped substantially to reduce the big and growing negative balance in merchandise trade.
Among the comparative advantages that helped the growth of Indian enterprises in the sectors mentioned above, the foremost was certainly the low-cost human resources: not only cheap labour but also – and in some cases like pharmaceuticals, software and IT-enabled services (ITeS) this is considered more important – in technical and managerial skill at half to one-fourth cost relative to what needs to be incurred in the West. Another advantage is that India boasts the world’s second largest (after the US) English-educated population (this advantage, however, may not last long because the Chinese are rapidly catching up). At the level of infrastructure, however, India remains miles behind China and this is acknowledged to be the main bottleneck to growth. On the other hand, other developing nations too are entering the lucrative off-shoring market. So India’s comparative advantage will be sustained only until such time as other cheap-labour countries can create a labour force with similar levels of skills.
Another important contributor to growth was the large remittances sent by Indians working abroad – particularly the large number of manual workers who send home the lion’s share of their incomes. This money, earned abroad and spent in India, caters to the growth of the internal market while a fraction is invested in small-scale undertakings and provides a healthy boost to the employment-generating informal sector; at the same time it helps strengthen our foreign exchange position. However, with the onset of global recession this source partially dried up, and so did income from software and ITeS (information technology enabled services) exports.
Among other stimuli, an important one was the extraordinary profit bonanza made available to big corporates in the shape of huge concessions doled out by the state. This led to a sharp rise in investment in certain branches of industry and services. For a few years the satisfactory growth rate continued without BOP headaches because, in addition to high export earnings and remittances, there was more than enough inflow of foreign capital. The other problem – inflation – was very much there, but was thought to be within tolerable limits. One reason was that the strong rupee helped keep the imported oil bill and other import costs in check.
The unprecedented growth rate, however, did not light up the lives of those who with their labour made this possible.
Under the Pedestal, It’s Pitch Dark
Under capitalism growth is never, it cannot be, egalitarian. But in the neoliberal phase remarkable gains for capitalists and the rural rich have come only at the cost of extreme losses for the labouring people. In addition to the well-known cases of large-scale eviction for ‘industrialisation’ and other forms of corporate plunder, the normal process of capitalist exploitation is intensified in several ways. While extraction of relative surplus value is enhanced by introducing latest high-speed plant and machinery, effective working hours are extended by various means – for example by cutting down and strictly monitoring recess periods available to workers – to squeeze more of absolute surplus value out of the workers’ toil. Secondly, casual/contract labour is extensively used even for permanent jobs to reduce the wage bill. Though illegal, this is easily done thanks to the existence of a large and growing pool of industrial reserve army, which also serves to depress the general wage level. Thirdly, pay commissions and bipartite/tripartite wage agreements are being increasingly delayed, subverted and even scuttled to erode real wages or keep them stagnant.
What is the net outcome of all these? Writes C.P. Chandrasekhar in the article The Roaring 2000s (The Hindu, 10 May 2012):
“Since the early 1990s, when liberalisation opened the doors to investment and permitted much freer import of technology and equipment from abroad, productivity in organised manufacturing has been almost continuously rising. Net value added (or the excess of output values over input costs and depreciation) per employed worker measured in constant 2004-05 prices ... rose from a little over Rs. 1 lakh to more than Rs. 5 lakh [between early 1980s and 2010 – A Sen]. That is, productivity as measured by net product per worker adjusted for inflation registered a close to five-fold increase over this 30-year period. And more than three-fourths of that increase came after the early 1990s.
[However,] “the benefit of that productivity increase did not accrue to workers. The average real wage paid per worker employed in the organised sector, calculated by adjusting for inflation as measured by the Consumer Price Index for Industrial Workers [CPI(IW) with 1982 as base], rose from Rs. 8467 a year in 1981-82 to Rs. 10777 in 1989-90 and then fluctuated around that level till 2009-10. The net result of this stagnancy in real wages after liberalisation is that the share of the wage bill in net value added or net product ... which stood at more than 30 per cent through the 1980s, declined subsequently and fell to 11.6 per cent or close to a third of its 1980s level by 2009-10.
“A corollary of the decline in the share of wages in net value added was of course a rise in the share of profits. ... [T]he years after 2001-02 saw the ratio of profit to net value added soar, from just 24.2 per cent to a peak of 61.8 per cent in 2007-08. These were indeed the roaring 2000s!”
It is thus a highly paradoxical ‘success story’ with a virulent anti-poor bias that we witnessed in our country all along the post-reform years. And now it is clear that this has adversely affected growth itself in the longer run. A good many economists (not necessarily Marxist or post/neo-Keynesian) have held inequality as one of the major causes behind the crisis and recession in the West. In Europe, the income shift towards the upper classes led to a dampening of aggregate demand, while in the US the same trend – thanks to the ‘American way of life’ and the policy of debt-driven growth – was accompanied by an alarming fall in savings and increasing indebtedness. In Europe economic slowdown resulted directly from a fall in demand and that earlier than in the US. In the latter case, recession, which was artificially postponed through asset bubbles for a period, came via a sudden and acute financial crisis caused by credit and deficit explosion. In both instances, reduced purchasing power of the people was a fundamental reason for recession. In our country the great relative decline in the purchasing power of the working class, as enumerated by C P Chandrasekhar (see above), has had a long term recessionary effect comparable to that in Europe.
- In 2004-2006, after more than a decade of economic reforms and at a time when the economy was growing fast, per capita net availability of foodgrains was 7.8 per cent lower than in 1994-1996. Indeed it was lower than in 1954-1956. [Economic Survey 2007-08]
- While the number of dollar millionaires and billionaires was growing at a rate that was among the fastest in the world, as of 2004-05 a total of 836 million people (77% of India’s total population) had an income below Rs.20 a day. This was revealed in the 2007 report of the National Commission for Enterprises in the Unorganised Sector (NCEUS), better known as the Arjun Sengupta Commission. Four sections made up this 77%: “the extremely poor, the poor, the marginal and the vulnerable”. Even the so-called “middle income group” which constituted 19.3% of the population had an average monthly expenditure of Rs 1098 per capita, or less than Rs 4400 only for a family of four.
- The situation did not improve in the second half of 2000s. Even today, India lags behind neighbouring China, Pakistan and Sri Lanka in reducing hunger level, says the 2012 Global Hunger Index (GHI) released by US-based International Food Policy and Research Institute. It is ranked 65th out of 79 countries, behind China (at 2nd place) Pakistan (at 57th) and Sri Lanka (at 37th).
- According to the United Nation’s Human Development Report 2011, India ranks 134 out of 187 countries on UNDP's Human Development Index. As Dr. Amartya Sen pointed out at the Kolkata Literary Festival in early February 2013, half of Indian households do not have toilets and half of India’s children are malnourished. “India is the only country in the world”, he added, “that is trying to have a health transition on the basis of a private healthcare that does not exist.” Between 1999 and 2011, India’s Gender Inequality Index has worsened – from 0.533 to 0.617 and the country now ranks 129 out of 146 countries, behind Pakistan, Bangladesh and Rwanda. What is most atrocious is the fact that this deterioration has taken place during years of high growth – thus proving beyond doubt the anti-poor nature of the growth trajectory itself.
According to the GHI 2012 Report, “Between 1990 and 1996, GHI score was falling commensurate with economic growth. After 1996, however, the disparity between economic development and progress in the fight against hunger widened... In two other South Asian countries—Bangladesh and Sri Lanka—GHI scores were also higher than expected but decreased almost proportionally with GNI per capita growth.... China has lower GHI scores than predicted from its level of economic development. It lowered its levels of hunger and undernutrition through a strong commitment to poverty reduction, nutrition and health interventions, and improved access to safe water, sanitation, and education. ... In India, 43.5 percent of children under five are underweight from 2005–10, India ranked second to last on child underweight out of 129 countries— below Ethiopia, Niger, Nepal, and Bangladesh. ... [W]omen’s poor nutritional status, low education, and low social status undermine their ability to give birth to well-nourished babies and to adequately feed and care for their children .... According to surveys during 2000–06, 36 percent of Indian women of childbearing age were underweight, compared with only 16 percent in 23 Sub-Saharan African countries...” - The National Crime Records Bureau (NCRB) figures across 18 years for which data exist show that at least 2,84,694 Indian farmers have taken their lives since 1995. (This is a gross underestimate because it accepts the zero or near-zero figures declared by Chhattisgarh and West Bengal in recent years). Divide that 18 years into two halves and the trend is dismal. India saw 1,38,321 farm suicides between 1995 and 2003 at an annual average of 15,369. For 2004-12, the number is 1,46,373, at a much higher annual average of 16,264. Farm suicides rose sharply by almost 450 in Maharashtra in 2012 to touch 3,786. Andhra Pradesh also logged 2,572 farm suicides in 2012. That is 366 higher than the previous year’s figure. Uttar Pradesh saw 745 farm suicides — up by 100 over its 2011 figure.
- The scenario appears all the more gloomy once we take into consideration the well-known facts about shameful levels of malnutrition among women and children, high incidence of maternal and baby death, the sad plight of minority communities and dalits, adivasis, hill people and the like. Moreover, the growth pattern takes absolutely no care of the environment (India ranks 125 among 132 countries on Yale University's Environmental Performance Index, behind the likes of Pakistan, Moldova and Kyrgyzstan).
Lopsided and Unsustainable Growth
The Indian growth pattern is such that it aggravates existing disparities not only across classes but also in terms of economic sectors and geographic regions. The outcome is that we have a highly asymmetrical economy that is “large in size ... but strange in shape”, as veteran Marxist scholar Perry Anderson puts it:
“The country now occupies a prominent place in every prospectus of BRIC powers, where the Indian economy is the second largest in size, though in many ways strange in shape. Manufacturing is not its pile-driver. Services account for over half of GDP, in a society where agriculture accounts for more than half the labour-force, yet less than a fifth of GDP. Over 90% of total employment is in the informal sector, a mere six or 8 percent in the formal sector, of which two-thirds are to be found in government jobs of one kind or another. In India cultivable land is forty percent more abundant than in China, but on average agricultural yields are fifty percent lower. The population is younger and growing faster than in China, but the demographic dividend is not being cashed: 14 million new entrants into the labor force each year, just 5 million jobs are being created.
Nonetheless, growth averaged some 7.7 percent in the first decade of this century, with savings rising to 36 percent of GDP – double the respective rates of Brazil. But compared to China, with roughly the same size of population and similar starting-points in the 50s, India scarcely shines, as Pranab Bardhan has shown in his masterly analytic survey of the two countries, Awakening Giants, Feet of Clay.
The urban-rural disparity has also aggravated. The NSSO in its 66th round of quinquennial survey for monthly household expenditure, released in July 2011, showed that for the year 2009-10, average rural spending was Rs. 1,053 and urban spending was Rs. 1984. The new survey when compared with a similar survey made in 2004-05 showed that the average monthly expenditure in urban India increased by Rs. 832 as compared to just Rs. 492 in rural India.
The latest survey also revealed widened expenditure disparity between the richest and the poorest, especially in urban India. In urban areas, the difference in monthly expenditure between the richest 10% and the poorest 10% increased from 4.8 times in 2004-05 to 9.8 times in 2009-10. Rural India witnessed a lesser hike in this expenditure difference – from 3.2 times in 2004-05 it rose to 5.6 times in 2009-10.
The economic growth achieved in our country is indeed lopsided and distorted also in the sense that it deviates from the normal course of capitalist development where abolition of feudal/semi-feudal property relations not only improve productivity but also greatly enhance the purchasing power of agriculturists, thus expanding the home market for manufactured goods. In this way, industry gets the much-needed demand boost, pulling up mining, transport and other sectors and absorbing labour released from agriculture. An agrarian society evolves into an industrialised country, with the lion’s share of GDP coming from industries, and creates a solid base for the third phase where services sector becomes the principal growth engine. But in our country the middle stage of industrial predominance was never reached (largely on account of continuance of the semi-feudal fetters on productive forces and the stagnant internal market for manufactured goods) before the services sector became the fastest growing one thanks mainly to the extraneous stimuli of business process outsourcing in the West. Thus, the burgeoning services sector, certain high-tech capital intensive industries, a few extractive industries and real estates and construction happen to be the more important areas that have witnessed robust growth, even as agriculture and labour-intensive old industries like jute textiles and engineering tend to stagnate and decline. After 20 years of restructuring, agriculture, industry and services contributed 14.62%, 20.16% and 65.22% respectively
It is crucial to remember that since the industrial revolution, no country has become a major economy without becoming an industrial power; it is very doubtful if India can prove itself the sole exception in the longer run. As of today, the relative weight of the services sector vis-a-vis industries is much greater in India than in China and this is certainly not a sign of good health.
India now ranks very high in the global production of many minerals that it produces not for its own use but increasingly for exports. For instance, in 1995-96, only 1.4% of the bauxite produced was exported; by 2007-08 this figure had shot up to 47%.
Disproportionate expansion of the services sector creates a false impression of development without actually improving the quality of life for the vast majority. Even as the basic material needs of the working people are not met, the country is flooded with various types of services – leisure, entertainment, tourism, a greater variety of shopping malls and restaurants, and financial services (e.g., specialised/personalised banking) to cater to all such needs. Expenditure on these items enters GDP calculations and creates a statistical illusion of “India Shining”.
Similarly, the growth process has bypassed the most backward states and regions and has been concentrated in a few already developed states and upcoming regions (such as the Gurgaon-Manesar industrial belt).
Another basic problem with the present growth model is that, like the so-called green revolution, it depends on and caters to a very thin layer of population: the rich and upwardly mobile urban and rural middle classes. The other constituency the growth model relies on happens to be a considerable foreign clientele (for example, the BPO sector fully and the software sector mostly depend on overseas demands). By excluding the bulk of the population this growth model sets an inherent limit to its sustainability, which has now been crossed.
From Bubble Burst to Recovery to Stagflation
For all these shortcomings, India did experience, as we saw above, a significant growth rate thanks mainly to a tidal wave of footloose financial capital attracted by the vast Indian market and the lucrative concessions offered by the Indian state. When that wave suddenly stopped in 2008, naturally the Indian economy too received a big jolt. The shock came most conspicuously in the shape of millions losing their jobs in garments, footwear and leather and other areas as exports started falling rapidly. In 2008 itself and in the textile sector alone, some 7 lakh workers – majority of them women – were rendered unemployed.
For a more detailed, stroke by stroke analysis of the progression of the recent crisis, we quote rather extensively from an ICRIER (Indian Council for Research on International Economic Relations) Working Paper (No. 241, published in October 2009) titled The State of the Indian Economy 2009-10:
“The global crisis got transmitted to India in January 2008 with the beginning of a massive withdrawal of FII investments from India and the consequent crash of the equity market ... (Stage 1). There had been a net FII disinvestment of US$13.3 billion from January 2008 to February 2009 (14 months) in contrast to a net investment of US$17.7 billion during 2007 (12 months). This was followed by a massive slowdown in ECBs by India’s companies, trade credit and banking inflows (Stage 2) from April 2008. Short-term trade finance and bank borrowings from abroad swung to outflows of US$9.5 billion and US$11.4 billion respectively in the second half of 2008-09. The crisis struck the foreign exchange markets by May 2008 and the rupee fell by about 20 per cent from May to November 2008 (Stage 3). The Reserve Bank of India intervened heavily to support the rupee by selling dollars, leading to some depletion of the stock of reserves. By mid-September 2008, the crisis gripped India’s money market (Stage 4). The drying up of funds in the foreign credit markets led to a virtual cessation of ECBs for India, including the access to short-term trade finance. The collapse of the stock market ruled out the possibility of companies raising funds from the domestic stock market. Indian banks also lost access to funds from abroad.... All these put heavy pressure on domestic banks, leading to a liquidity crisis from mid-September to end-October 2008. …
From September 2008, the trade sector collapsed (Stage 5). In the second half of 2008-09, merchandise exports declined by 18 per cent against a growth of 35 per cent in the first half and imports fell by 11 per cent against a growth of 45 per cent in the first half. The growth in software exports dropped to less than 4 per cent in the second half of 2008-09 (38 per cent growth in the first half) and remittances declined in absolute terms by about 20 per cent in the second half (growth of 41 per cent in the first half of 2008-09)....
In the next stage (Stage 6), the crisis spread to the domestic credit market. The real economy deteriorated from September 2008, shown first by the sharp fall in export growth to 10 per cent in that month from about 35 per cent during April-August 2008, and negative growth thereafter; virtually negligible or negative growth in industrial output from October 2008; and negative growth in central tax revenue collection, also from October 2008. Business and consumer confidence began to ebb leading to a decline in overall demand. By November 2008, the situation had fundamentally transformed. Expansion of bank finance to the commercial sector slumped to Rs.609 billion during the four-month period, November 2008 to February 2009, just about a quarter in comparison with the expansion of Rs.2,362 billion during the same period a year ago .... This was primarily due to a sharp fall in demand for funds as investment and consumption dropped. It was also partly due to banks becoming extremely risk averse with the perception of default rising considerably.”
What did the Government of India and the RBI do? The Working Paper continues:
“The major policy response to the crisis came in the form of loosening monetary policy and administering fiscal stimulus packages. There were a few other measures like the relaxation of ECB rules, raising the cap of FII investment in debt etc.
“Monetary Measures
... Through successive steps, the RBI brought down the cash reserve ratio (CRR) from 9 to 5 per cent, the statutory liquidity ratio (SLR) from 25 to 24 per cent, the repo rate from 9 to 4.75 per cent and reverse repo rate
The RBI opened a special window for banks to lend to mutual funds, non-banking financial companies (NBFCs) and housing finance companies. The central bank also opened refinance facilities for banks, the Small Industrial Development Bank of India (SIDBI), the National Housing Bank (NHB), and the EXIM Bank besides introducing a liquidity facility for NBFCs through a special purpose vehicle (SPV), and increasing export credit refinance.
Fiscal Stimulus Packages
The central government announced three successive fiscal stimulus packages: one in early December 2008, the second one in early 2009 and the last one in early March 2009. These included an across-the-board central excise duty reduction by 4 percentage points; additional plan spending of Rs.200 billion; additional borrowing by state governments of Rs.300 billion for plan expenditure; assistance to certain export industries in the form of interest subsidy on export finance, refund of excise duties/central sales tax, and other export incentives; and a 2 percentage-point reduction in central excise duties and service tax. The total fiscal burden for these packages amounted to 1.8 per cent of GDP.
Impact on the Economy
The growth in GDP dropped to 5.8 per cent (year-on-year) during the second half of 2008-09 from 7.8 per cent in the first half.... The lower GDP growth can be attributed partly to the decline in private consumption growth to just 2.5 per cent in the second half of 2008-09 from ... an average consumption growth of 8.5 per cent in the whole of 2007-08. Private consumption growth dropped further to 1.6 per cent in the first quarter of 2009-10. The growth in fixed investment declined to 5.7 per cent in the second half of 2008-09 from 10.9 per cent in the first half and an average of 12.9 per cent in 2007-08. The growth in fixed investment dropped further to 4.2 per cent in the first quarter of 2009-10. Government consumption growth, on the other hand, rose steeply to 35.9 per cent in the second half of 2008-09 from just 0.9 per cent in the first half and 7.4 per cent in 2007-08. The sharp rise in government consumption growth cushioned the drop in growth of other components of aggregate demand and prevented a larger fall in GDP growth in the second half of 2008-09.” [Emphasis added]
The aforesaid package of monetary and fiscal stimuli – drawn up largely on the lines of measures adopted in the US – helped promote credit-financed consumption (first in the public sector and then to some extent also in the private sector) and infrastructural investment in PPP model (in many cases without proper cost-benefit assessment, as we shall see in the next chapter) while financial inflow from abroad was restored rather quickly thanks to the huge infusion of liquidity through stimulus packages introduced in the US and other advanced economies. These and some other factors combined to bring the GDP growth back to 8% in 2009 and then to 9.9% in 2010-11.
Such a fortuitous conjecture, however, was destined to be short-lived. Before long, high inflation struck again, with food price inflation being particularly high in some periods. The main causes were rising import costs (increasingly caused by, inter alia, the declining value of rupee), growing fiscal deficit of the wrong kind (i.e., spurred not so much by state spending on productive, employment-generating sectors/activities as by wasteful expenditure and “revenue foregone” and other concessions to the rich), cuts in subsidies and the neoliberal practice of leaving even administered prices to the vagaries of markets.
In an attempt to arrest inflation, the RBI raised interest rates repeatedly. This dampened debt-financed private consumption as well as investment, adversely affecting growth. Capitalists and their spokesperson Finance Minister repeatedly demanded, in increasingly aggressive tones, that the interest rates must be lowered in order to regenerate growth. But stubborn and often rising inflation would not permit the country’s central bank to abandon its responsibility of controlling price levels. So the Chidambaram-Subbarao clash continued, until a rapprochement was arrived at in January-February 2013, with the RBI agreeing to make credit cheaper by moderately lowering interest rates and the Finance Ministry taking fiscal conservatism to the extreme through drastic reductions in public expenditure both in actual terms in the current fiscal year as well as in budget provisions for the next year (see below).
The reconciliation was only to be expected because both the finance ministry and the country’s central bank work under the intellectual hegemony of international finance capital, although their immediate priorities and compulsions may differ and give rise to occasional frictions independently of who happens to be RBI governor. On this basis was started a new round of crisis management.