State of the Republic

Sitaram Yechury

THE 53rd anniversary of the Indian Republic was celebrated with usual pomp and gaiety. The customary speeches and declarations of intent were all there. The president of India, in his maiden speech on such an occasion, drew upon his much publicised “Vision 2020” and called for a “mega mission” to reach urban amenities to the countryside. This was keeping in line with the distress he expressed over the condition of the rural poor.

Earlier, during the discussions on and the release of the tenth five-year plan document, the prime minister had projected India’s growth rate to be over 8 per cent annually. This, he thundered, would catapult India into the club of fastest growing economies in the world. It is only a matter of time, according to him, when the country will overflow with milk and honey. Such platitudes abound.

Is there any basis for such wishful thinking? The current economic fundamentals tell us a different story. The debt situation continues to worsen. There has been a net capital outflow from the country. The servicing of foreign debt has reached a stage where, for the past few years, fresh loans are being taken in order to repay past loans and interest. The agricultural sector is, at best, stagnant. Foodgrain production has fallen below the rate of population growth --- for the first time since independence. Starvation deaths and distress suicides continue to stalk rural India even while 60-odd million tonnes of foodgrains are rotting in godowns. 

Industrial recovery is slow and sluggish. The possibilities of recovery are taking a beating with the global economic recession continuing unabated.   Consequently, the prospects for any export-led growth become dimmer by the day. Even the much-hyped growth in the services sector has been adversely affected by the global economic recession. In any case, the growth of the services sector is contingent upon healthy agricultural and industrial sectors. When the later stagnate or decelerate, it is only a matter of time before the former follows suit. And that time seems to have arrived.

All this has been imposing greater burdens on a vast majority of our people.  While the distress of the rural poor required to be highlighted by the president himself, the other disturbing fact is the sharp decline in the overall employment growth in the economy. During the decade of economic reforms --- the 1990s --- employment is estimated to have grown at around 1.01 per cent per annum, compared to 1.55 per cent in the eighties (Report of the Second National Labour Commission). Large-scale closure of industrial units, both private and public, is leading to massive retrenchment and layoffs. The voluntary retirement scheme has virtually become a compulsory retirement scheme for thousands of workers.

The loot of India's public assets continues unabated. After enacting some drama for public consumption, the union cabinet has cleared the sale of two premier petroleum companies --- HPCL and BPCL. These blue chip profit-making companies are to be handed over to foreign and domestic capital, literally for a song. Such is the contempt for national assets that the cabinet specifically barred other public sector giants like ONGC from biding for these companies. Telecom privatisation has reached a stage where facilities and concessions are being doled to the rich, at the expenses of the common telephone user who will have to pay more for every call that is made from a landline.   

The state’s withdrawal from the fields of education, health, food security etc has meant that the common people will have to pay more for these services, if not forego them completely. Already with the privatisation of electricity in many parts of the country, the common people are being forced to pay much more than they did a few years ago. The concessions to the rich, however, continue to pour with new taxation reforms like the Kelkar committee proposals. During the decade of these economic reforms, the share of tax revenue in India’s GDP has been constantly declining. This is the main reason why the government's finances are in a mess; they are declining. But this very decline in revenue is being offered as a justification for further retreat of the state from its social obligations to the people. 

India, thus, currently has an economic dispensation like this. As far as the people are concerned, the state withdraws from providing support for their basic socio-economic needs (which, constitutionally, the central government is obliged to undertake). However, as far as the corporate sector (both foreign and domestic) is concerned, the government steps up its intervention to create conditions for generating greater super profits. 

With such a dispensation, the president’s wishful thinking can only remain a pipe dream. Unless the course of these reforms is reversed and such reforms are put in place as would lead to economic empowerment of our vast millions, no rejuvenation of the economy is possible. This requires a massive public investment to build the much-needed economic and social infrastructure.    This, in turn, needs a massive resource mobilisation by taxing the rich appropriately and blocking the deliberately created avenues for sleaze that deprive the government of thousands of crores of legitimate revenue. 

Above all, this requires the need to put an end to the enormous loot of public resources that takes place through corruption in high places. But this precisely is the culture of this Vajpayee government. Political morality has been deliberately allowed to degenerate to its nadir. 

This is the state of economic foundations of Indian Republic today.  Simultaneously, the growing assaults on the Republic’s secular democratic foundations converge to mount an all-round rapid undermining of the Republic itself.

Celebrations on an anniversary of the Republic must necessarily mean to redouble the resolve to protect, safeguard and further strengthen the Republic.  This resolve naturally entails the need to develop strong people’s movement against the policies that are undermining the internal strength of the Republic. This, in turn, means the need to deliver India and its people from the clutches of the present government.

Let us resolve to strengthen the people’s struggles and movements in the defence of our Republic.