[Pen-l] Neoliberalism in India

[Louis Proyect <lnp3@xxxxxxxxx>]

The Quest for a Neoliberal Agenda
August, 30 2008

By Veerendra Kumar
Source: The Hindu (India)

After the trust vote of July, the United Progressive Alliance 
government envisioned the prospect of unleashing the stalled 
juggernaut of liberalisation, since the recalcitrant Left and its 
allies had been jettisoned. This trumpeted reform process that is 
gaining momentum in vital sectors demonstrates collusion between 
corporate interests and the current dispensation.

Topping the agenda is the opening up of the banking sector. The 
second phase of the process is to commence in April 2009. The move to 
reduce government equity holding in public sector banks to below 50 
per cent is disturbing. Foreign banks will be allowed to own up to 74 
per cent of private sector banks and 20 per cent of government owned 
banks ? Credit Suisse, the Rabo group and ANZ are awaiting entry, and 
UBS, Dresdner Bank and United Overseas Bank have secured licences. 
The result will be the collapse of social banking, loss of jobs and 
the poor getting pushed out of the banking net.

The Finance Ministry on August 14, 2008 passed an order for the State 
Bank of India (SBI) to acquire State Bank of Saurashtra, as a prelude 
to the amalgamation of six associate banks. The SBI Subsidiary Bank 
Amendment Bill, 2008, is yet to be moved in Parliament. The 
inspiration for this merger paradigm stands discredited in its very 
homeland, as percipiently observed in an editorial in The Hindu on 
August 20: "Indian policy makers ought not to miss the point that the 
world's largest banks in the United States have been guilty of 
regulatory transgressions and have piled up unprecedented losses."

Switzerland's largest bank, UBS, a union of Swiss Bank and Union Bank 
of Switzerland, has decided to break up. Behemoths such as Citigroup, 
JP-Morgan Chase and HSBC Holdings have proved vulnerable, as the 
majors have taken a hit of more than a $300-billion (Rs.130,000 
crore) in asset write-downs because of the sub-prime crisis. The 
International Monetary Fund estimates the final damages at $1 
trillion (Rs. 43.5 lakh crore).

Additionally, Merrill Lynch, Wachovia, Bank of America, Royal Bank of 
Scotland, Washington Mutual and Morgan Stanley have, through losses 
and write-downs, joined the Hall of Shame, according to The 
Economist. If only the Finance Minister were to heed the advice of 
Arthur Burns, former Chairperson of the U.S. Federal Reserve, who 
admonished Walter Wriston, then Citibank chairperson, thus: "Walter, 
you are absolutely wrong to have an earnings target for a bank. It is 
not seemly." Banking then, as for us in the Indira Gandhi era, was 
conceived of as a quasi-public utility and not a "business" aimed at 
maximising dividend payouts.

full: http://www.zcommunications.org/znet/viewArticle/18624

_______________________________________________
pen-l mailing list
pen-l@xxxxxxxxxxxxxxxxxx
https://lists.csuchico.edu/mailman/listinfo/pen-l