The level of economic activity under capitalism is subject to prolonged ebbs and flows. When the economy is on an upswing, this very fact acts as an elixir that emboldens capitalists, who begin to expect that the “good times” are going to continue; this makes them less worried about taking risks, more “adventurous”, and hence more prone to taking “bolder” decisions in their asset preference. And because of this they also undertake investment in physical assets like construction, equipment and machinery which makes the boom continue, and thereby justifies their euphoria.

The opposite happens when there is a downturn. It introduces a gloomy outlook among the capitalists; they become more acutely conscious of risks, become scared in their asset preference, and curtail their investment, preferring to hold money instead which is a riskless asset (though it earns nothing). This very fact in turn makes the slump prolonged, and thereby justifies their fear of taking risks.

This very obvious feature of capitalism, namely the self-sustaining euphoria associated with a boom and the self-sustaining gloom associated with a slump, has a bearing on the issue of diffusion of development to the third world. We are talking here of diffusion that spontaneously occurs through the working of unfettered capitalism of the sort that neoliberalism typifies, not diffusion brought about through deliberate third world State action involving protectionism and such like.

For capital, whether of the metropolis or of the third world, the latter constitutes a site of greater risk. The metropolis is the home base of capitalism and capitalists of all description, whatever the colour of their skin, feel safer there than even in their own countries (which is why there is so much of siphoning of funds from the third world by its own capitalists). In a boom however, which is a period of euphoria, the risk of holding third world assets gets underestimated. The euphoria of a boom extends to the realm of asset preference where not only is greater investment in general undertaken by capital (rather than its holding on to the barren but riskless asset, money), but even third world assets are demanded to a greater extent. The differential preference for metropolitan compared to third world assets gets reduced, which, apart from bringing greater direct investment to the third world, also brings greater finance for buying up third world assets. The relative price of third world assets compared to metropolitan assets increases; or, put differently, for any given price of metropolitan assets, the price of third world assets rises, which increases the production of such assets (i.e., increases investment) and hence raises the growth rate in the third world.

Exactly the opposite happens in a world economic recession. As capitalists become more risk-averse, not only do direct investment flows to the third world dry up (which may be further aggravated by protectionism in the metropolis of the sort that Trump is introducing), but finance capital too stops coming to the third world; indeed there develops a tendency for finance, whether originating in the metropolis or even within the third world, to move towards the metropolis. The relative price of third world assets compared to those from the metropolis drops which further chokes off local investment, causing a fall in the third world growth rate.

The foregoing has two implications. The first, which is fairly indubitable is that booms in world capitalism in conditions of neoliberalism are associated with higher growth rates in the third world, while slumps in world capitalism have the opposite effect. The second implication which is stronger is that the fluctuations in growth rates in the third world are greater than the fluctuations in the growth rates in the metropolis, since the impact of risk-aversion on investment falls even more heavily on the third world than on the metropolis, with third world asset prices relative to metropolitan asset prices also fluctuating. In short, euphoria or gloom in world capitalism has an even greater impact on the third world than on the metropolis in conditions of neoliberalism.

What this means is that the very “pundits” who were lauding the higher growth in the third world compared to its own past during the boom years of neoliberalism, and employing such growth as evidence of the beneficial effects of neoliberalism (conveniently forgetting even at that time that a process of primitive accumulation of capital was being unleashed against peasants and petty producers, which swelled the labour reserves to the detriment of all working people including even the unionised workers of the organised sector), will now have to eat their words. As the world capitalist recession continues and even gets accentuated, as finance begins to flow back increasingly to the metropolis as is already happening (resulting in a depreciation of several third world currencies, including above all the rupee, vis-à-vis the US dollar), investment and growth rate in the third world will dry up to an even greater extent than in the metropolis.

Since there is no end to the capitalist recession in sight, and since protectionism as is being practiced by Trump will only worsen the world crisis by intensifying the gloom about the future (even though the US may temporarily gain from this “beggar-my-neighbour” policy, only until others retaliate), the particularly acute distress of the third world that this recession brings with it, will also be a prolonged phenomenon. The third world in short is sinking into a prolonged period of stagnation. This will bring acute distress to the working people, since the primitive accumulation of capital at the expense of the peasants and petty producers that had accompanied the capitalist boom, will continue unabated, while stagnation will only further reduce employment generation within the capitalist sector.

The hype about the diffusion of development to the third world in short will soon disappear. This is not the first time that such a reversal is happening. In the late nineteenth and early twentieth centuries, during the late Victorian and Edwardian booms, there was also a hype about the diffusion of development to the third world. But many of the third world countries which were among the fastest growers of that time are today being counted as the world’s “least developed” countries, Myanmar being a classic example. To be sure, the diffusion of development to the third world during the capitalist boom of the recent neoliberal period has been more pronounced than earlier; and Myanmar’s fortune was tied to its oil resources whose exhaustion spelled its doom. But the point is that the phenomenon of yesterday’s champions being tomorrow’s laggards is by no means uncommon.

The Great Depression of the 1930s had followed the collapse of the long Victorian and Edwardian boom, and during the Depression only those third world countries had flourished which had managed to delink themselves from the web of unfettered world capitalism by imposing controls over trade and capital flows. Notable among these were the Latin American countries that had embarked on a “nationalist strategy” of import-substituting industrialisation after overthrowing the local oligarchies that had been in cahoots with imperialism. Colonised economies like India, by contrast, though they did see some industrialisation since even the colonial regime had to introduce a meagre amount of what was called “discriminating protection” to appease the local bourgeoisie, did not see enough of it.

We are once more entering a period of significant political upheavals and economic changes within the world capitalist system, as a consequence of the crisis whose impact on the third world, as suggested above, will be particularly acute.

One thing however is indubitable. An impression had been created of late that the third world can overcome its economic misery even while remaining within the orbit of world capitalism, that neoliberalism was giving rise to a diffusion of development to the third world from the metropolis which was so pronounced that the earlier argument about socialism alone creating conditions for overcoming the third world’s economic travails, had become passé; and even if some residual poverty remained within the third world despite rapid growth, it was only a matter of time before that too would disappear through a “trickle down” of growth. Capitalism in short was the panacea for mass poverty in the third world and not its progenitor as the Marxists had been arguing. The crisis that is enveloping the third world economies at present, is putting an end to that claim.

Courtesy: Newsclick.in
 

 

 

 
Newsclick Image by Sumit Kumar

Thomas Piketty and Lucas Chancel have just written a paper as part of their work for the World Inequality Report discussing the movement of income inequality in India. And their conclusion is that the extent of income inequality in India at present is greater than it has ever been at any time in the last one hundred years.

Their estimates go back to 1922 when the Income Tax Act became operational in India. The share of the top 1 per cent of the population in total income at that date was around 13 per cent. It increased to 21 per cent by the late 1930s and then fell to about 6 per cent by the early 1980s before rising to 22 per cent in 2014, the final year of their study.

What is striking about the paper’s finding is the almost exact synchrony between the break in inequality trends and the transition from dirigisme to neoliberalism. In the period between 1951 and 1980, the bottom 50 per cent of the population captured 28 per cent of the increase in total income while the top 0.1 per cent actually witnessed a decline in their income. In fact the income of the bottom 50 per cent increased faster over this period than the overall average. Between 1980 and 2014 however the top 0.1 per cent captured a higher share of the increase in income (12 per cent) than the entire bottom 50 per cent (11 per cent).

To be sure, data on income inequality can always be questioned. For a start we have no income surveys in the country; all we have are sample surveys relating to consumption expenditure and getting from the distribution of consumption expenditure to the distribution of income is problematical since we do not know how savings, which constitute the difference between the two, are distributed. Secondly, in all sample surveys, the top percentiles are always insufficiently represented, precisely because they are so few in number. Statisticians therefore make all kinds of assumptions about how income is distributed within the top decile to arrive at the share of the top 1 per cent or the top 0.1 per cent of the population. And these assumptions can always be questioned.

It is not surprising therefore that the Piketty-Chancel estimates too have been questioned by some commentators. But no matter how one views their absolute figures, the trends revealed by them can scarcely be questioned, since more or less the same method of estimation is employed across time. And this trend is entirely in conformity with what other researchers have been saying, and also with what one would theoretically expect. Credit Suisse for instance provides wealth distribution data. According to these data the top 1 per cent of households in India currently owns more than half (57 per cent) of the total wealth of all households, and wealth inequality in India has been rising extremely rapidly, indeed more rapidly than even in the United States.

Wealth distribution is invariably more unequal than income distribution, because the working class which has no wealth has nonetheless an income. Hence the Piketty-Chancel figures for the share of the top 1 per cent in income are by no means out of sync with the Credit Suisse figures about their share in total wealth. (By the same logic however they seriously negate estimates that put the share of wealth of the top 1 per cent at only 28 per cent, though even these latter estimates recognize the significant increase in wealth inequality since 1991 when neoliberal reforms began and when the share of wealth of the top 1 per cent was just 17 per cent according to them).

A measure of inequality that is often adopted is the Gini coefficient which captures the distance between the actual distribution and an ideal distribution characterised by absolute equality. The problem with the Gini coefficient however is that by looking at the distribution as a whole it misses out on questions like the shares of the top percentiles. For instance even when the share of the top 1 per cent may be increasing, the Gini coefficient may show a decline in inequality if some redistribution is occurring say from, say, the 4th decile from below to the bottom decile, ie, from the “poor” to the “very poor”. Piketty and Chancel accordingly do not use the Gini coefficient but look at the shares of the top few percentiles, which is a much more useful measure (especially if we are talking of economic power).

The Piketty-Chancel figures show that 1983-84 was the year of the lowest income-share for the top 1 per cent, after which this share started rising. It may be recalled that neoliberalism first made its appearance around that very time and that the budget presented in 1985 by Vishwanath Pratap Singh, who was then the finance minister in the Rajiv Gandhi government, contained significant steps in this direction (against which in fact the Left parties had organised a convention in New Delhi at that time). The association between growth in inequality and the pursuit of neoliberalism is thus strikingly close. And not surprisingly, such a growth in inequality has characterised almost every country in the world in the period of “globalisation” which is characterised by the almost universal pursuit of neoliberal policies under the diktat of international finance capital.

The authors, both in the paper itself and also individually in interviews, give a number of reasons why income inequality has increased in India in this period, reasons having to do with the pursuit of neoliberalism. The decline in the highest marginal income tax rate from 98 per cent to 30 per cent, the persisting inequality in land ownership, and the lack of access to education and health by the poor, are some of the points raised by the authors.

All these are very important. But there is an additional factor that needs to be mentioned here, namely the attack on petty production, including peasant agriculture, that neoliberalism has brought in its wake. While an improvement in the conditions of the peasantry does not necessarily benefit the agricultural labourers automatically, a deterioration in their conditions invariably gets “passed on” to the labourers. And what is more, since, in the event of such a deterioration, destitute peasants seek employment in the urban economy, where very few additional jobs are being created, they tend to swell the reserve army of labour which also affects the wages of the urban workers and hence the overall urban income distribution.

In other words, as rural India has on average a lower income than urban India, any widening of the rural-urban difference has the effect, other things being equal, of widening overall income inequality (by the Piketty-Chancel measure). But it also has the additional effect of widening the income inequality within the urban sector itself. It does this via a swelling of the reserve army of labour in the urban economy through the immigration of destitute peasants into it. For both these reasons, the assault on petty production launched by neoliberalism constitutes an important factor behind the growth of income inequality.

The case of China, where, according to these authors, income inequality was rising rapidly earlier but got reversed in the current century is instructive in this context. To be sure, there are basic differences between the Indian and the Chinese economies; but an important proximate factor behind the reversal of the growing inequality in China was the policy adopted by the Chinese Communist Party under the slogan “Towards a Socialist Countryside”. This policy checked and reversed some of the encroachments on peasant agriculture that the attempt to industrialise through a relentless export drive had entailed.

The introduction of a wealth tax (which, amazingly, India does not have), the increase in income tax rates upon the rich, the provision of quality education and health services to all under the aegis of the State, and of course land redistribution, are undoubtedly some of the steps that must be taken to reverse the growing income inequalities; and these entail a jettisoning of neoliberalism. But even while recognising this, we must also recognise, which the authors do not do explicitly, that neoliberalism is not just a policy of choice that can be given up at will. It corresponds to a stage of capitalism where international finance capital has acquired hegemony; overcoming neoliberalism therefore requires a class struggle against this hegemony through a wide mobilisation of workers and peasants.

The authors however rightly take on the apologists of neoliberalism who argue that such a growth in income inequality is essential for achieving the high GDP growth that has actually occurred in countries like India. This is absurd, since the highest rate of income growth that has ever occurred in world capitalism was experienced in the post-war period, during the so-called “Golden Age of Capitalism”, when income inequality actually was declining the world over. This decline in income inequality to be sure was not because of the operation of capitalism but because of the concessions that capitalism had been forced to make in the face of the looming socialist threat; but it shows that the argument that growing income inequality is essential for higher growth is a complete non-sequitur.     

Courtesy: Newsclick.in

Fifty years ago, Reverend Dr. Martin Luther King, Jr., delivered a talk entitled ‘Beyond Vietnam: A Time To Break the Silence’ at New York’s Riverside Church. He had come to talk in searing terms about the American war on Vietnam. That American war had begun in 1955, a year after the French withdrawal from their former colony. In the 1960s, US President Lyndon B. Johnson escalated the US presence in Vietnam, which faced sustained aerial bombardment. The sheer brutality of the use of chemical weapons and heavy bombs is reflected in the opinion of the Chief of Staff of the US Air Force Curtis LeMay who said, ‘we’re going to bomb them back into the Stone Age.’ It was against this vulgarity that Dr. King decided to speak. Silence was no longer possible. Religious leaders had to move ‘beyond the prophesying of smooth patriotism to the high grounds of a firm dissent.’ Dr. King, on 4 April 1967, positioned himself squarely on those high grounds.

During that year – 1967 – the United States air force conducted over two thousand weekly bombing runs over both North and South Vietnam. The year’s total ordinance dropped would add up to 15 million tons of explosives. By the time the United States withdrew from Vietnam, it had dropped three times the total tonnage of ordinance used in World War II. On Laos, the US dropped 2.5 million tons of munitions, seven bombs for every Laotian. The nature of the weapons curdles the stomach – cluster bombs, Agent Orange, poisonous herbicide, napalm, and fleshettes. It is important to underline that at least three million Vietnamese civilians died in that war.

Dr. King’s prose is powerful – and unvarnished – on these atrocities. How do the Vietnamese experience the war? ‘They watch as we poison their water, as we kill a million acres of their crops. They must weep as the bulldozers roar through their areas preparing to destroy the precious trees. They wander into hospitals with at least twenty casualties from American firepower for one Vietcong-inflicted injury. So far we may have killed a million of them, mostly children…Now there is little left to build on, save bitterness.’ Surely, he said, ‘this madness must cease.’

Prelude to King.
On April 17th, 1965, two years before Dr. King took the podium, twenty-five thousand people came to Washington as part of a protest called by the Students for a Democratic Society against the US war on Vietnam. The numbers of those who would come onto the streets as part of the anti-war movement would escalate from April 1965 to April 1967, including a hundred thousand people at protests across the country over the weekend of 15-16 October 1965. On 17 February 1966, world heavyweight boxing champion Muhammad Ali refused the draft saying, ‘I ain’t got no quarrel with them Viet Cong.’ A few months later, Stokeley Carmichael, a leader of the Student Non-Violent Coordinating Committee, described the war colorfully as ‘white people sending black people to make war on yellow people in order to defend the land they stole from red people.’

Dr. King joined a major struggle that had begun two years before him. But, in characteristic fashion, Dr. King’s entry into the anti-war movement was both lyrical and decisive. He did not merely speak against the war on moral grounds. The war, he argued, would divert the energy of the United States from the promise of the Civil Rights movement. Precious public funds were being moved from tending to the American poor to warfare, and it was the American working-class of all colors that was being sent to operate in ‘brutal solidarity’ as they burnt the ‘huts of a poor village.’ When America’s dejected took up Molotov cocktails and rifles in 1965, Dr. King went amongst them to plead for nonviolent action. But now the country was using ‘massive doses of violence to solve its problem.’ Was this example not one for ordinary people in the United States to follow?

The war must end, Dr. King said, and to bring it to an end those who had been drafted must object. They must not go to war. The war machine must be paralyzed. The working-class that is forced to go fight the war of the rich must demand that the resources go toward their own broken lives. This was a powerful statement. It echoes in our times.

Shirtless and Barefoot People.
Who was responsible for this war? Not the Vietnamese. They were part of the Third World upsurge, which had emerged after World War II in Africa, Asia and Latin America. ‘These are revolutionary times,’ Dr. King said. ‘All over the globe men are revolting against old systems of exploitation and oppression, and out of the wounds of a frail world, new systems of justice and equality are being born. The shirtless and barefoot people of the land are rising up as never before. The people who sat in darkness have seen a great light.’ Here is Césaire’s Discourse on Colonialism (1950) and Fanon’s Wretched of the Earth (1961), deeply felt prose on behalf of the world’s shirtless and barefoot peoples. Dr. King was speaking of the Vietnamese, but he had in mind all those others from Ghana (where he had attended the independence ceremony in 1957) to India (where he had been to the ‘land of Gandhi’ in 1959). The world’s people wanted to live with dignity. They had a right to self-determination.

It was the West, Dr. King said pointedly, that was against this upsurge. In his speech he mentioned the ‘counterrevolutionary action of American forces in Guatemala’ in 1954 and the actions of the Green Berets in Peru. Why was the United States so involved in ‘counterrevolutionary action’? Dr. King, unlike many liberals in the anti-war camp, went deeply into the heart of the American malady. ‘When machines and computers, profits motives and property rights, are considered more important than people,’ said the Reverend, ‘the giant triplets of racism, extreme materialism, and militarism are incapable of being conquered.’ The West, as the spear of global capitalism, wanted to suffocate the aspirations of the world’s people. This warfare, Dr. King underscored, would not only sabotage the planet’s hopes but it would also destroy the promise of the Civil Rights movement in the United States.

Fierce Urgency.
Three days later, the New York Times wrote an editorial titled ‘Dr. King’s Error.’ The basic point in this essay was that by linking the war with Civil Rights Dr. King had ‘done a disservice to both.’ The mandarins at the Times believed that Dr. King was wrong to say that the war would drain funds from the anti-poverty work in the United States. But the data did show, even in 1967, that the funds for urban redevelopment and for employment in Chicago, Harlem and Watts was being drawn down while the government increased its commitments to the war. It was also clear by 1967 that increasingly numbers of Black and Brown men went to fight in the war, in ‘brutal solidarity’ – as Dr. King said – with white soldiers against a war against the Third World upsurge. What the Times did not see was that the Civil Rights movement was kin to the Third World upsurge and that an attack on one – in Vietnam – was also an attack on the other – Civil Rights in the United States. Dr. King saw this clearly. It was not a matter merely of resources. It was a matter of participating in the global revolutionary dynamic.

As President, Barack Obama liked to quote Dr. King’s line about the ‘fierce urgency of now,’ which is a line that appears towards the end of this 1967 speech. That part of the speech was a rebuke to the kind of thinking in the Times editorial. Why was Dr. King excised with the ‘fierce urgency of now’? Because, he said, in human affairs there is ‘such a thing as being too late. Procrastination is the thief of time.’ Terrible events surround us. These events compel us to voice dissent. ‘Over the bleached bones and jumbled residues of numerous civilizations are written the pathetic words, Too Late. There is an invisible book of life that faithfully records our vigilance or our neglect.’ King wanted to write his name on the side of justice. He was not bothered by the sanctimonious rhetoric from the Times and from establishment liberals who raised their eyebrows at his vigil.

A year later, Dr. King said, ‘Only when it is dark enough, can you see the stars.’ It was of course dark enough in 1968. Dr. King was killed on the first anniversary of this speech. Whether that was a coincidence of not is not important (Reverend Vincent Harding, who helped King write the speech, thought it was not a coincidence). We are at the fiftieth anniversary of the speech. The sky is now so dark that even the stars are muted. Voices are stilled, afraid to say the full truth – that the ‘giant triplets of racism, extreme materialism, and militarism’ break the spirit of humanity.

Courtesy: Alternet

But what I’m positing is not occasional. It is a steady amount, paid every year, year after year, ad infinitum (well, for as long as you live!).
 

Sounds far fetched? Not really. Here’s how it would work –
 

Let’s start with a few facts. First is the fact that under Indian law, state government’s are the owner’s of mineral resources. However, governments own these in their capacities as Trustees for the people. In other words, the true beneficial owners of the resources are the people of the state.
 

Second, under Article 21 of the constitution future generations must have as much access to resources as our own. In other words, we are merely custodians of inherited resource wealth and cannot deplete the country of its resources leaving none of the value for our children. 
 

Now, as we know, Goa has rich deposits of iron ore. While much of these have already been extracted (the first mining concessions were granted by the Portuguese as early as 1929, though relatively modest amounts were extracted till the last decade), estimates of mineable reserves currently remaining in the ground are in the region of just under 600 million tons. In the years immediately prior to a 2012 Supreme Court judgment, huge amounts were being mined each year, which if continued at the same pace in future could have resulted in no ore being left after 10 years. However, the judgment limited future iron ore mining in Goa to 20 million tons per year. Now using this cap on the amount that could be mined per year in the future, and simply selling the right to mine for just (say) the next 12 years, based on long term average iron ore sale prices and percentages of value historically obtained by efficient governments, the Goa government could reasonably expect to earn approximately Rs 45,000 crores from the sale of future mining rights over this period (these estimates are taken from a letter sent to the Chief Vigilance Officer by the NGO Goa Foundation in June, 2015). If the money thus collected was conservatively invested to earn a return of (say) 3% above the rate of inflation, with just this 3% ‘real’ (i.e. excess) return being distributed to citizens as an annual dividend (and the remainder retained in the fund to effectively ‘inflation proof’ the principal amount for the benefit of future generations), an annual dividend of Rs 9,000 could be paid to each man, woman and child living in Goa today (assuming a population of 1.5 million). Voila, it’s as simple as that!
 

And this will not be the first time that such a thing has been done. The concept of permanent funds for mineral wealth is a well established one. Take the case of the US state of Alaska. Soon after the Trans-Alaskan pipeline system was opened, allowing Alaska’s vast reserves of oil to find their way to market, and on the back of a popular perception that the government had historically not managed the revenue from these reserves well, the state set up a permanent fund in 1976. This fund started distributing an annual dividend to residents in 1982 and has done so in every year since then. The most recent annual payment was USD 2,072 per head. To be eligible for the dividend an individual needs to establish that he or she has physically lived in the state for at least 185 out of 365 days of the calendar year preceding the date of the relevant dividend distribution (which typically happens in October each year).
 

By law, at least 25% of the Alaskan state’s oil revenues must be paid into the fund. The revenues of the fund go towards meeting the expenses of administering it (this is done by a state owned company which is operated at arms-length from the government of the day), retaining a portion within the fund as a hedge against inflation, and paying the annual dividend to residents.
 

Now let’s get back to Goa. During the years of peak iron ore prices (2004-2012) the state secured for its coffers approximately 3% of the (declared) value of iron ore extracted by private parties from within its boundaries. This came from levying royalties on miners, set as a percentage of the value of the ore that they sold. This very low percentage of the total value that was secured by the owners of the resource compares extremely unfavorably with instances where reasonably efficient owners have secured between about 50 and 75% of the value. 
 

Naturally, it would be wrong to assume that the full value of the resource can accrue to the state. After all it costs money to extract ore from the ground and sell it. Those doing so also need to earn a ‘reasonable profit’. So some of the value must accrue to the extracting parties. Taking this into account and assuming a generous profit to those parties, The Goa Foundation has estimated that during this 8 year period over Rs 50,000 crores (about 7.5 billion US Dollars) of value was lost to Goans due to the revenue system used by the state government. This is about twice the revenue that the Goa government earned from all sources during the period. Had this money been secured and invested in a permanent fund with 3% per year paid to residents as a dividend, it would have resulted in each Goan receiving Rs10,000 per year. The Rs 9,000 per year receivable from the sale of future mining rights, as previously mentioned, would of course come on top of this – so the dividend would grow as the pot grew. In short, what has happened in Goa in recent years amounts to a raw deal for the people on a massive scale.
 

But much of this is fairly well known.
 

In September 2012, following the report of a judicial commission (the so called ‘Justice Shah Commission), the Supreme Court banned mining in Goa. The judgment in April 2014 stated that a number of illegalities had occurred including mining after the expiry of leases (all mining leases expired by November 2007, yet mining continued until the Supreme Court order nearly 5 years later) and dumping waste outside mining lease areas, among others. It also specified that for mining to resume in the state fresh leases and environmental clearances would be required, an interim cap of 20 million tons per annum was placed on the amount that could be extracted each year, the government was required set up a permanent fund and to investigate and prosecute those who had broken the law.
 

Less than a year later, in January 2015 the central government issued an ordinance stating that henceforth all mining leases must be auctioned and no leases can be renewed on expiry (if desired, fresh leases could be granted following a fresh auction). However, in the weeks before the ordinance was promulgated, the government of Goa renewed the leases of 88 mines, extending them till 2027 while effectively backdating the renewals to 2007. It thus substantially weakened its position in recovering damages from parties that had been deemed to have mined illegally after 2007 as per the Supreme Court order.

Incidentally 56 out of these 88 leases were approved in the week before the ordinance was promulgated, presumably in the knowledge of the impending legislation. No auction was conducted.

So far so depressing.
 

But we should not be completely despondent. Much has been lost but there is still some hope for the future. If this (or a subsequent) government follows the orders of the Supreme Court it could attempt to recover at least some damages from those who acted illegally (bearing in mind that the Supreme Court pointed out several illegalities). Charges imposed could swell to nearly double the principal amounts if interest were taken into account. It could also cancel existing leases on the basis of current illegalities and auction new leases. This has recently been done in the case of coal blocks. The full proceeds from both sources of revenue could be put into a permanent fund. 
 

A local movement called Goenchi Mati (see www.goenchmati.org) has as its chief aim the persuasion of political parties to do precisely this. It is asking politicians contesting the upcoming state elections to sign a petition saying that they promote this course of action. For the sake of our children it deserves our support.