ON TO AUGUST 16-31 CAMPAIGN

For Massive Protest Against NDA’s Economic Policies

  M K Pandhe

THE CPI(M) Central Committee’s call for a countrywide massive campaign in the second fortnight of August has given prominence to the question of economic policies being pursued by the NDA government and by most of the state governments. During the last 12 years, these policies have created an excessively adverse impact on the livelihood of toiling masses all over the country.

Seven united nationwide strikes organised by the working class have clearly reflected the growing militancy of this class to oppose the policies of globalisation. The people of India have increasingly seen from their practical experience how these policies result in growing dependence of the multinationals and slow down India’s economic growth. With growing pauperisation of the masses, the struggle for elimination of poverty from the soil of India is becoming a distant cry.

ECONOMIC SLOWDOWN

Citing the latest data, the February 2, 2003 issue of The Economic Times observed “that the capital formation rate has slowed down for two consecutive years from 27.7 per cent of GDP at constant rate in 1999-00 to 25.6 per cent in 2001-02. Some sectors have taken even bigger hit. In 2001-02, gross capital formation in manufacturing declined by 7.4 per cent, in transport by 24 per cent and in communication by 18.3 per cent over the previous year.” As the Economic Survey 2002-03 had to admit, “stagnation in industrial investment has been a major factor influencing the lower industrial growth in some of the years since mid-nineties.” The National Council for Applied Economic Research (NCAER) noted, “Growth remains elusive in most economic indicators and one factor that was yet to see significant improvement was investment activity…..Declining interest rates, stable exchange rate, moderate inflation rate, liberalised foreign investment regime, quieter internal security environment or even better profit earnings of the corporates failed to visibly induce new investments in industrial production capacity” (Business Standard, January 1, 2003).

It is just not a case of decline in growth rate; the agricultural sector is facing an absolute decline. During the six years ending 2002-03, agricultural growth has been negative for three years and remained almost stagnant in 1999-00. In 2002-03, it recorded a decline by 3.2 per cent and all blames were put on the drought situation. The decline in agriculture is explained further by the fact that the foodgrain production in 2002-03 fell much below the 1996 level by around 16 million tones. The major commercial crops like oilseeds, cotton, sugarcane, tea and coffee also faced a similar decline in absolute terms, while the remaining remained virtually stagnant.  

Despite all liberalisation measures and all concessions to big landlords, the gross capital formation in agriculture as percentage of the GDP has been consistently falling, reaching merely 1.3 per cent in 2001-02. The annual growth rate in agricultural employment has also undergone an absolute decline from 1.51 per cent during 1983-93 to – 0.34 per cent during 1993-2000; during the current year it has fallen further below. Per capita availability of foodgrains has also been going down every year during the entire decade of liberalisation.

SHARP RISE IN UNEMPLOYMENT

The unemployment situation has been aggravating and attaining complicated dimensions. Several factors have been contributing to such serious development. The persisting crisis in the capitalist economy all over the world and the onslaught of so-called market economy under the regime of imperialist globalisation are the two major factors behind it.

Expressing serious concern at the galloping rise in unemployment, the ILO has observed, “Economic slowdown have produced deterioration in the global employment situation. With uncertain prospects for economic recovery, a reversal of employment trends is unlikely in 2003.” As per the ILO estimates world unemployment reached to about 180 million at the end of 2002. In true reflection to the linkage between unemployment and poverty, according to ILO, “550 million workers were living on US 1 dollar or less a day at the end of 2002.”

Huge job losses in the public sector are contributing in a big way to aggravating the unemployment problem in the country. The public sector accounts for about 69 per cent of the total employment in the organised sector. Now due to the downsizing onslaught the public sector has suffered job losses in a very big size. As per a study report, the total employment in the public sector as on March 31, 2001 was over 27.75 million, which came down to 27.33 million on March 31, 2002 (PTI, May 16, 2003). In absolute terms, 4,20,000 public sector employees have been thrown out of employment during the period noted above. But far more disturbing data spring from the report of the Special Group on Employment for the tenth plan period, headed by Dr S P Gupta. The group assessed that nearly four million more labour force is likely to be shed only in the public sector units and the government sectors during the tenth plan itself.

Further distortions in the economy are in the offing as of the forthcoming WTO ministerial meet to be held at Cancun (Mexico) on September 10-14, 2003, is approaching. The meet is slated to discuss further liberalisation of trade in agriculture, investment regime and a host of procedural and other issues --- all aimed at further subjugating the interests of the developing nations in the interest of a few richer ones.

Given the already visible capitulating postures of the NDA government before the imperialist powers on several political and economic issues, the government of India’s role in the said ministerial meet cannot be relied upon unless people’s pressure is built up against the possibility of further surrender of national interests by this anti-national government. It has been learnt that during his recent visit to the USA, the Indian home minister has already given an understanding to the US president to cooperate in the forthcoming WTO meet, with a request that the outsourcing of the IT jobs from the USA to Indian market, which is being opposed by the American trade union movement, should be allowed to continue.

DISINVESTMENT & PRIVATISATION

The NDA regime has pushed the policy of disinvestment to outright privatisation by the outright sale of profitable public sector undertakings (PSUs). While delivering his 2000-01 budget speech in parliament, the finance minister declared, “Government have recently established a new department for disinvestment to establish a systematic policy approach to disinvestments and privatization, which will emphasise increasingly on strategic sales of identified PSUs.” In his address to the joint session of parliament, the president said “the shift in the emphasis from disinvestment of minority shares to strategic sale has yielded excellent results.”

Since the establishment of the ministry of disinvestment, 34 public sector units have been privatised through the strategic sale route. A sum of Rs 11,344 crore has been raked by the government out of the said strategic disinvestment deals (Public Enterprises Survey, 2001-2002). Apart from the hotels of the ITDC and HCI, the PSUs that have been strategically disinvested include: MFIL, BALCO, CMC, HTL, IBP, VSNL, PPL, STC, MMTC, HZL, Maruti Udyog, and IPCL.

The strategically important, profit making blue-chip PSUs, which are being desperately pushed for privatisation by the ministry of disinvestment, include the HPCL, BPCL, Shipping Corporation, NALCO, ports and docks, the Airports Authority of India and the CIL. 

The net profit earned by public sector undertakings in the 2001-02 was Rs 26,045 crore as against Rs 15,653 crore in 2000-01, recording a 66 per cent increase. Profit, interest, depreciation and tax payment have increased by 29.34 per cent to Rs 89,619 crore in 2001-02 from Rs 69,287 crore in 2000-01. The return on equity share capital (net profit to paid-up capital ratio) was 24.58 per cent for 2001-02. The net profit before tax (PBT) increased to Rs 38,299 crore in the year from Rs 24,967 crore in the previous financial year, registering an increase of 53.40 per cent. The PBT to net worth for 2001-02 was 16.49 per cent. The net worth has increased by 31.47 per cent. The PSUs’ contribution to the central exchequer by way of excise duty, customs duty, corporate tax, interest on central government loans, dividend and other duties and taxes has gone up by Rs 1,716 crore --- from Rs 61,037 crore in 2000-01 to Rs 62,753 crore in 2001-02 (Public Enterprises Survey, 2001-02).  

The two oil majors --- BPCL and HPCL, now under the dark cloud of privatisation --- are credited with an excellent financial performance. The BPCL’s turnover in the past few years had been Rs 42,294 crore and the excise duty paid was Rs 10,513 crore. The HPCL’s turnover has been Rs 45,286 crore and the excise duty paid was Rs 11,246 crore. Thus the total turnover of and total excise duty paid by these two oil PSUs have been Rs 87,580 crore and Rs 21,759 crore respectively.  

A very shocking fact have been revealed by none other than a committee constituted by the all-powerful prime minister’s office (PMO) last year to study the post-privatisation situation in certain privatised units. The committee undertook field visits to take stock of post-privatisation situation in the BALCO and Modern Food units. About the BALCO, according to the committee sources, “Sterlite forced VRS (voluntary retirement scheme) on employees and decided to pay the amount in five instalments…Those who refused are being troubled through transfers.” So far as the Modern Food is concerned, “It is unbelievable that in just over two years, Hindustan Liver Ltd has cut off staff strength from 1,650 to 850 and is in the process of shifting its Delhi machinery to Jaipur while the Faridabad unit has already been closed” (The Times of India, May 27, 2003).

INTENSIFY MASS STRUGGLES

The trade unions and other mass organisations led by the CPI(M) have to prepare all sections of the people to participate in a countrywide  powerful struggle so that these policies could be reversed. The fortnight from August 16 to 31 has to be fully utilised by the party and mass organisations to use this occasion for an intensive campaign against the government of India’s economic policies. All the tall claims of the NDA partners about the “rapid” progress of Indian economy have been fully exposed by the UNDP’s findings about human development in India which has brought down India’s rank from 124 to 127 out of the 175 countries studied.

A big educative campaign among the toiling sections of Indian people during the fortnight is needed to attract larger and larger sections of people in the vortex of the nationwide struggle that is looming large in the immediate future.