The Lok Sabha election has produced what was easily the worst conceivable outcome by giving an outright majority to the Bharatiya Janata Party under a man who is widely believed to have been complicit in mass killings of Indian citizens belonging to one faith, and who even 12 years on has not been fully exonerated by the country’s legal system despite its compromised, semi-functional nature, and vulnerability to diabolical manipulation. Make no mistake. Despite a limited (31 percent) national vote, Narendra Modi’s victory is the result of a Rightward shift in society, and the triumph of Hindutva combined with neoliberal capitalism.
Tag - Neoliberalism
It’s a sign of the pathology of much of India’s mainstream media that it displays the rise of the speculative-trader-industrialist Hinduja brothers to the top of Britain’s (not India’s) billionaire list on the front page, as many papers did on May 12, while blacking out the shamefully persistent phenomena of grinding poverty and rapidly growing income inequalities in this country.
A vitally important issue that has altogether fallen off India’s economic-political discourse is growing economic inequality. In part, this is because of the continuing hangover of the euphoria generated by economic liberalisation, and the growth of social-Darwinist ideas and moral indifference towards the poor within our burgeoning middle class. In part, this also reflects India’s Rightward political drift, and the declining ideological-political influence of the Left and its own retreat from egalitarianism.
'The Congress can't return to power unless it reins in prices, lowers interest rates, taxes the rich,' says Praful Bidwai. 'If this means sacking those most responsible for the UPA's pro-big business policies including Finance Minister Chidambaram, so be it!'
On October 15, the Central Bureau of Investigation did something unusual in the coal block allotment scam—if only under the Supreme Court’s goading. It filed a First Information Report against top industrialist Kumar Mangalam Birla and former coal secretary PC Parakh for illegally allotting two coal blocks in Odisha in 2005 to the Aditya Birla group-owned Hindalco Industries to generate electricity.
Under neoliberalism, income and regional disparities have got bloated to a point where the country's rich and the poor live in two separate worlds.
Corruption doesn’t occur primarily, as Team Anna holds, because there’s a “lack of an independent, empowered, … anti-corruption institution”. The real reasons include a neoliberal policy regime that encourages privatisation of common property resources through sweetheart deals and a politician-bureaucrat-businessman nexus; the rise of greedy entrepreneurs; an increasingly compromised civil service; poorly monitored public service delivery; and a dysfunctional justice delivery system.
England’s worst rioting in decades has ended, but not without leaving London, Birmingham, Liverpool, Nottingham and other cities scarred and large numbers of people shellshocked at the intensity of the violent confrontation between the police and angry youth. The rioting, in particular, the looting of supermarkets and shops, has provoked angry condemnations.
Several recent developments, including the release of intercepts of a telephone conversation between corporate lobbyist Niira Radia and a Dravida Munnetra Kazhagam MP, a Parliament uproar over the underselling of telecommunications spectrum, and media stories on the growing power of the lobbyist–politician–policymaker nexus, have highlighted a major affliction of the Indian polity which should concern all conscientious citizens. Lobbyists have come to acquire enormous clout, to the point of influencing the choice of Cabinet minister, nominating key bureaucrats, and formulating economic and industrial policies at the nuts-and-bolts level.
The News International, May 12, 2007
Prime Minister Singh in an unusually reflective speech critiqued a collusive business-government relationship which has led to persisting inequality in India, yet Praful Bidwai argues that he has failed to see how his observation applies both to himself and his policies.
On May Day, Prime Minister Manmohan Singh struck an unusually reflective and candid note while speaking at the Institute for Studies in Industrial Development in Delhi. He said he's "puzzled by the persisting regional imbalance in industrial development… in India." He expressed serious concern that most Indian businessmen operate in "oligopolistic markets and in sectors where the government gives them special privileges".
Singh then went on to ask: "Are we encouraging crony capitalism? Is this a necessary but transient phase in the development of modern capitalism? Are we doing enough to protect consumers and small businesses from the consequences of crony capitalism…?"
Singh's self-critical observation about "crony capitalism"
or a collusive business-government relationship, which produces undeserved gains for corporations must be welcomed. He's absolutely right to say, "We cannot depend only on a few large industrial houses and capitalists for driving our industrialisation process…" His warning about "oligopolistic markets" which unfairly favour Big Business doesn't come a day too soon.
Yet, Singh seemed to be trying to pre-empt serious criticism of elitist economic policies, which would logically lead to their correction. His attempt to present "cronyism" as a "necessary" (if "transient") phase in capitalist development in India gives it the ring of inevitability.
Evidently, far from being "transient", cronyism has proved lasting and abiding for decades -- whether during the much-maligned "licence-permit raj" of the 1960s and 1970s, or its partial dismantling in the 1980s, or under full-throttle liberalisation and privatisation launched by Singh himself in 1991.
Cronyism's forms have certainly changed. Three decades ago, corporate-state collusion meant the grant of out-of-turn industrial licences. In the early 1990s, cronyism consisted in temporarily amending import regulations to benefit certain industrial magnates. It also meant a wholesale rewriting of the ground-rules even of privatisation, as in basic telephony -- where the state wrote off obligatory licensing fees.
Today, it means establishing Special Economic Zones, promoting organised retail and hypermarkets, and allowing companies to borrow $22 billion abroad at low interest rates. Cronyism's basic content remains unaltered.
Singh's criticism of cronyism was further muted by his remarks that industrial growth would pose "challenges like displacement of people, environmental damage and alienation of the working class." And yet, "one cannot throw the baby out with the bathwater." The "baby" in question is rapid industrialisation -- a magic formula to help India emerge as "a major industrial power." But this totally disregards the social consequences of industrialisation.
Singh is himself guilty of favouring Big Business in countless cases. Recently, his office intervened on behalf of the Korean company POSCO, which wants to build a giant steel plant in Orissa -- India's largest-ever foreign investment project (Rs52,000 crores).
Singh has earmarked 3,000 acres of forest land to POSCO. He is pushing the state-owned Kudremukh Iron Ore Co to transfer its mining lease to POSCO. This falls squarely within the definition of cronyism. Singh's discourse about cronyism, then, is a half-apology, mixed with a little regret -- transient enough to allow a mere shrug of the shoulders.
Its second most important feature is that the "cronyism" confession comes from a person who, with due respect, is himself a crony. Singh wouldn't have been appointed finance minister in the crisis year 1991 without prior approval by the international financial institutions (IFIs), including the World Bank and the IMF.
Former Prime Minister P.V. Narasimha Rao, an intelligent but deeply cynical man, decided to obey the IFIs' dictates. After the collapse of Soviet Union, he felt, non-alignment would have no future; India would have to play the only game left in town -- neoliberalism. Singh would perform that function. Rao repeatedly hints at this in his autobiographical novel The Insider.
Singh, a long-standing friend of the IFIs, proceeded to play the cronyism game with unmitigated zeal -- not least through the appointment of other cronies like Montek Singh Ahluwalia and P. Chidambaram to key positions in 1991-95, and then again after the United Progressive Alliance came to power three years ago.
The positioning of top bureaucrats dedicated to neoliberalism in key ministries was integral to the process. They included N.K. Singh, Vijay Kelkar, Rakesh Mohan, R. Vasudevan, R.V. Shahi, Anwarul Huda, Arvind Virmani, Ashok V. Desai, S. Narayan, Tejinder Khanna, Y. Venugopal Reddy, to mention only some.
Equally important were the "Revolving Doors": former IFI employees and consultants would join as secretaries of economic ministries. Contrariwise, Indian civil servants would join the IFIs upon retirement or on deputation. At one time, 21 out of 27 economic bureaucrats passed through such "Revolving Doors"!
The change of economic orientation was reflected in foreign policy too. India moved away from non-alignment, and towards the United States. The process was hesitantly begun by Rao, and acquired momentum under the National Democratic Alliance.
It's now peaking under the UPA with the India-US nuclear agreement, and India's willingness to cut a deal on services and non-agricultural market access in the World Trade Organisation, behind the backs of other developing countries.
A glaring instance of cronyism today is the appropriation of vast powers by planning commission deputy chairman Montek Singh Ahluwalia, a quintessential World Bank-IMF crony. The commission has never been more powerful than it is today -- ironically, under the sway of anti-planning free-market policies.
Ahluwalia decides everything -- whether the Northeast will develop or not, how many districts the National Rural Employment Guarantee will cover (without adequate funding), and whether primary schools will run.
Since 1991, the Indian state has mollycoddled Big Business through massive tax breaks and excise/import duty concessions. Indian companies pay an average of 17 per cent tax on their profits, less than one-half the rate in the west. Thanks to reduced taxes, cars and air conditioners cost less in absolute rupees than they did 10 years ago -- inflation notwithstanding.
The single-minded devotion with which crony capitalist policies have helped business is starkly evident in the growth of India's high net-worth individuals, whose disposable income exceeds $ 1 million. Their number grew from 61,000 to 83,000 between 2003 and 2005.
Even more shamefully, India has, according to Forbes magazine, the world's fourth highest number of billionaires. India (with 36 billionaires) has just overtaken Japan (24). Their total wealth equals one-fourth of India's GDP! India has three of the world's top 20 billionaires, a number exceeded only in the US (five).
At the other pole, there is steady accumulation of poverty and destitution, aggravated by dispossession and displacement. The neoliberal years have seen the slowest reduction in poverty. But the true extent of deprivation is probably growing faster than before. India's global human development rank is a miserable 126.
Needless to say, Indian growth is increasingly mal-distributed. Capitalism always builds on the best, on the most developed regions. SEZs will further aggravate disparities. So it's completely hypocritical for Singh to say he's "puzzled" by growing disparities. Disparities and imbalances follow directly from his own policies.
If he wants this to change, the UPA must tax the rich more, reinforce the death duty, discourage inheritance, and launch an incomes policy which sets upper limits on salaries and bonuses. It must also promote public investment in backward areas -- to reduce regional disparities. Only then can cronyism be cured.
Inter Press Service, March 16, 2007
by Praful Bidwai
NEW DELHI, Mar 16 (IPS) - By ordering police to open fire on peasants trying to protect their land from being acquired for a Special Economic Zone (SEZ), the communist government of West Bengal state has indicated the crumbling away of the last bulwark in India against neo-liberal and free market policies.
At least 15 people died and over 50 were injured by police firing on Wednesday in Nandigram leading to serious rifts within the Left Front coalition that is supposed to rule West Bengal but where power is monopolised by the Communist Party of India-Marxist (CPI-M).
Since the firing, Nandigram has witnessed unceasing confrontation between the state police and CPI-M cadres, on the one hand, and local residents organised under the banners of various political parties and non-party groupings, on the other.
After the initial shock and fear that sent them fleeing, people belonging to five villages in the Nandigram area, about 150 km from West Bengal's capital Kolkata, have regrouped and are now fighting the police and demanding to know the whereabouts of their missing relatives.
"The people claim that the number of those killed is much higher than the official figure of 15, and that the police and CPI-M cadres are burying bodies under rubble and building roads and culverts over them," said Aditi Chowdhury, a Kolkata-based social activist who has been following developments in the area, where trouble first erupted two-and-a-half months ago over the acquisition of land for the construction of an SEZ.
Speaking with IPS over telephone Chowdhury said: "Thousands of armed policemen surrounded the villages, and on many occasions they fired at eye-level to kill. TV footage showed trucks carrying bodies with their legs dangling out. The brutality was chilling.'' She added that state Chief Minister Buddhadeb Bhattacharjee's brazen defence of the firing, as part of an attempt to restore law and order in the area, has only occasioned more public anger.
The Nandigram events, in particular the police firing, have seriously dented the image of the Left Front, which has ruled the state for an uninterrupted three decades - considered a global record in democracy and electoral politics.
The CPI-M's main partners in the Left Front - which includes the Communist Party of India (CPI), the Forward Bloc, and the Revolutionary Socialist Party (RSP) - are livid and have publicly deplored the resort to repression. They are alarmed at the blatant contradiction between what the Left preaches at the national level, and what it practises in the states where it is in power - West Bengal and to a lesser extent in southern Kerala.
Like West Bengal, Kerala has also been looking to foreign investment to help generate employment for its skilled workforce. But its Chief Minister V.S. Achuthanandan, once a factory worker himself, has stuck to transparent functioning and a pro-poor approach in dealing with foreign investors keen to set up software parks in the 100 percent literate state.
In West Bengal, Bhattacharjee advocates the zealous pursuit of industrialisation at any cost, if necessary by offering concessions and tax breaks to investors, of a kind which the Left Front has always regarded as "crony capitalists".
CPI general secretary A. B. Bardhan strongly condemned the police action in Nandigram as "unheard of" in the Left Front's history and a black-mark in its record. The party's West Bengal secretary Manju Majumdar called it "brutal and barbaric." Forward Bloc general secretary Ashok Ghosh said the incident "has tarnished the image of the Left Front." And senior RSP leader Kshiti Goswami rhetorically asked: "Does democracy exist in this state or not?"
Together these partners hold a total of 51 seats in the 294-strong legislative assembly, as compared to the CPI-M's overwhelming 176 seats. They have long complained, usually off the record, that they are not consulted by the CPI-M while taking major decisions on behalf of the government. But Nandigram has given them a new voice.
The dissidents in the Left Front have found a strong supporter in the grand old man of West Bengal politics, CPI-M politburo member and former chief minister Jyoti Basu. He told the Left Front chairman Biman Bose that the CPI-M was running "one-party rule in this state. It doesn't look like a coalition government at allà" Basu has asked the Chief Minister to own up responsibility.
Clearly there are serious misgivings about Nandigram and Bhattacharjee's industrialisation policy within the CPI-M too. These are voiced in private by party leaders and especially intellectuals who are bitterly but cogently critical of neo-liberal or free-market policies.
Bhattacharjee is inured to such concerns. He has been rooting for private sector-led industrialisation as a panacea for the state's economic woes. He is pushing through an automobile factory for the Tatas, one of India's foremost business groups, at Singur in the face of staunch opposition from peasants who are being forced to sell their land under the colonial Land Acquisition Act of 1894.
Nationally, the Left Front demands abrogation of this law because it allows the state to expropriate land to be used for private profit.
The Tatas are also being offered huge subsidies at Singur, of the order of one-fourth of their capital investment.
Bhattacharjee shelved land acquisition plans for the Nandigram SEZ because of powerful protests in early January, and because the CPI-M politburo asked him to put all SEZs on hold in line with the central government's own decision to do so until after a national rehabilitation policy is finalised.
But, as the influential Times of India daily pointed out in an editorial on Friday, ‘'the offer to withdraw the notification for land acquisition and shift the SEZ project elsewhere seems like a ruse meant to distract the villagers who had barricaded the area''.
SEZs have become intensely unpopular in India because they are widely seen as "sweetheart deals" which offer huge tax breaks and privileged treatment to promoters and exporters at the expense of the public exchequer. Even the World Bank has expressed misgivings about SEZs.
Originally, 10,000 acres of land were meant to be acquired for the Nandigram SEZ to be awarded to the Salim conglomerate of Indonesia, which is believed to be a front for the super-corrupt Suharto family. There is a great deal of unease in the CPI-M and the Left Front about favouring this group.
Why did Bhattacharjee resort to draconian police action after the Nandigram SEZ was shelved? He claims the state had to reestablish its writ and law-and-order, which had broken down; the area was blockaded to government functionaries for two-and-a-half months.
"The rest of the answer lies in the CPI-M organisational structure in West Bengal," says Tanika Sarkar, a modern Indian historian who visited Nandigram to inquire into the violence there in January.
Speaking with IPS, she explained that the CPI-M cadres control the entire area and have a stake in all major economic transactions. ‘'It won't brook any challenge to its monopoly of power. Yet, when the protests against land acquisition broke out on Jan. 7, and the cadres tried to suppress them, they faced the people's anger. Many were driven out. The have been itching to return and reestablish their hold."
Sarkar said the CPI-M cadres knew that they could only return to Nandigram by relying on police support. ‘'That's what the latest operation was all about. Brutalising ordinary people and denting the party's credibility as a pro-poor organisation is the price the CPI-M had to pay to please its local cadres."
Nandigram has major implications for the Left's future in India. Of the country's many political parties, the Left alone has a coherent critique of neo-liberal policies, which are creating havoc through their vicious dualism, contribution to widening disparities, and callousness towards the poor.
If the Left embraces neo-liberalism in West Bengal, and tries to attract corporate investment irrespective of whether it generates employment and skills, that will damage its credibility, and weaken its ability to act as a progressive pressure-group to rein in the aggressively pro-liberalisation Manmohan Singh government at the centre.
It is in pursuit of the pressure-group role that Left Front supports the Singh government from the outside rather than join in the federal government.
India's Left parties today enjoy their highest-ever representation in Parliament. Their credibility and respect far exceeds their membership or political representation. They are best placed to develop an alternative model of development that is not predatory on people's livelihoods.
"But this won't happen unless the Left, in particular the CPI-M, stops its own rightward drift," argues the noted political scientist Achin Vanaik. ‘'If it fails to correct course, it will undergo rapid decline,'' said Vanaik who teaches political science at Delhi University. (END/2007)