A Requiem For “Development”

  Prabhat Patnaik

THE “pundits” who have been holding forth on the election results/ exit polls on the various television channels have missed one very simple and obvious fact, namely, everywhere in the country the people in their overwhelming numbers have voted against the concept of “development” that has become fashionable in the last decade and a half. They have made it very clear that they simply do not want that kind of “development”.

Chandrababu Naidu who was a great exponent of such “development”, and for that very reason a darling of the “development” crowd, has suffered the most humiliating defeat in the history of the TDP. S M Krishna, another votary of “development” and hailed by the “development” crowd for his Business School background, is by all accounts headed for a similar defeat.

Amarinder Singh, yet another “development”-freak, is all set to lose the state of Punjab for the Congress in the Lok Sabha polls. Digvijay Singh who was so committed to “development” that Bhopal was always chockful of visiting dignitaries from the World Bank, the ADB and other such outfits, bit the dust some months ago. And above all, the NDA government whose commitment to “development” was so great that its prime minister Vajpayee was hailed by his cronies for a while as “the development man” (vikas purush) and whose “development” achievement had made the Indian “upper crust” “feel good” in a way it had never done before, is clearly on its way out. We are listening indeed to a requiem for “development”.

PROMOTING URBAN PROSPERITY

The chief hallmark of such “development” is the promotion of a small island of urban prosperity amidst a vast ocean of rural distress. (It is no accident that Andhra Pradesh, Karnataka and Punjab, the three states mentioned above, have also been the states witnessing a spate of peasant suicides in recent months). The urban upper class has been provided with a significant increase in income and wealth under this “development” paradigm: the ceiling on executive salaries has been lifted; generous tax concessions have been doled out; the stock market has been nurtured into experiencing boom conditions; government assets have been “privatized” for a “song”; foreign money has made its way into the economy through a proliferation of NGOs; and, in the case of states like Andhra Pradesh, the government has borrowed massively for “development” in order to feed the pockets of the urban rich.

Of course even certain not-so-rich sections of urban India have benefited from this “development”, partly as a fall-out of the very enrichment of the rich, partly as a consequence of the outsourcing of IT-related services from the metropolis, and partly owing to the urban house-construction boom which the burgeoning liquidity of the banks, itself the consequence of the inflow of speculative global finance, has given rise to.

Even within urban India of course the industrial workers have witnessed mass retrenchment and unemployment (with even renowned industrial centres like the Ahmedabad textile industry getting literally obliterated), and an attack on their democratic right to resist; and small business has been hit by a combination of recessionary conditions, non-availability of credit, and competition from imports.

RURAL DISTRESS

The most severe impact of this “development” however has been felt in the countryside. There has been a squeeze on the peasantry, through a combination of high input prices, including of electricity; low output prices against which all protection has been withdrawn; sharply reduced credit availability from institutional sources; and sharply reduced investment in rural infrastructure. The rural poor have been even harder-hit: they have suffered not only on account of the decimation of the production-structure in the countryside, but also owing to the reduced development expenditure of the State, and the collapse of the public distribution system. They have been reduced to a state of hunger unseen in this country since independence. And all sections, whether in urban or in rural India, have seen a cut in government expenditure in the social sector, a decline in their “social wage”, and a deterioration in the quality of public services. To the urban rich the quality of public services does not matter since they prefer the privatization of such services anyway, but to the bulk of the people this entails a direct and palpable lowering of the quality of their lives.

This is the “development” which has been much acclaimed by the World Bank, the ADB and other such outfits, which has launched laudatory editorials in publications like The Economist of London, which has earned encomiums from sundry mouthpieces of international finance capital, which has given rise to the slogan of “India Shining”, and which has been hailed by the media and even a section of the academic community that takes its cue from the pronouncements forthcoming from Washington DC. The encomiums from international finance capital include the conferring of awards like “International Statesman of the Year”, “International Finance Minister of the Year”, “One of the Hundred Most Important Personalities of Our Time” etc., which the likes of Chandrababu Naidu, Manmohan Singh and Chidambaram (in their time), and Atal Behari Vajpayee (who, poor man, had to be bracketed with a film star like Aishwarya Rai instead of shining in solitary splendour) have received.

It is this “development” which the people of the country, in particular the vast multitudes of the Indian countryside, have voted overwhelmingly against. This fact however cannot be digested by the media, both print and electronic, which have been a party to the propagation of the myth of “Shining India”. So the poll pundits of the media have thought of all kinds of explanations, “anti-incumbency factor”, “wrong alliances”, a presumed “Atal wave” which for some mysterious reason stopped at a certain geographical point, a “Priyanka factor”, and what have you, to explain this popular verdict. There is not a mention (that I have heard) in any of the television discussions on the electoral verdict, of the agrarian crisis and the rural distress as possible influences on the electoral outcome.

MYTHICAL GROWTH

A question was briefly raised in some TV channels after Naidu’s debacle whether the phenomenon of “Andhra growth” was a myth. But it was quickly brushed aside on the grounds that Naidu after all had won a second term. One can say the same about Digvijay Singh as well. Why, it may then be legitimately asked of me, has the anger against this “development” paradigm surfaced now and not earlier? The simple answer to this question is that this paradigm itself has been put in place in its entirety only in the last few years. The driving force behind this of course has been the BJP-led government which even used, in the most un-Constitutional manner, the services of the Eleventh Finance Commission to coerce the state governments into implementing the so-called “development” agenda with regard in particular to the “unbundling” and privatization of the power sector (the one element which has had such enormous adverse implications for the peasantry). But certain state governments like MP under Digvijay Singh, Naidu’s Andhra Pradesh and more recently Karnataka and Punjab which were themselves eager votaries of this “development” paradigm, pressed ahead with gusto and compounded the agrarian crisis. Sheila Dikshit’s Delhi, which also implemented power sector reforms was fortunate in not having much of a peasantry. (Besides it has had a degree of success in mobilizing tax revenue, through service taxation for instance, which has contributed towards the maintenance of government expenditure). But who knows: with massive power cuts in Delhi as a direct result of power sector reforms, it too may be facing the peoples’ wrath in a few month’s time (though fortunately for it no elections are immediately due).

ANTI-INCUMBENCY FACTOR

Of all the possible explanations of electoral swings, the so-called “anti-incumbency factor” is unquestionably the most banal. And barring perhaps a few practitioners of the dubious discipline of psephology, hardly anyone uses it anywhere outside India. If Al Gore in the US got the majority of popular votes despite two terms of Clinton presidency (a clear violation of “anti-incumbency”), the reason for it according to most American commentators lay in the boom years of the Clinton era. If George Bush Sr. got thrown out despite conducting what was then considered in the US a “successful” war in the middle east, the reason most commonly cited was not any “anti-incumbency” but the miserable state of the economy. If Margaret Thatcher never lost an election during her long tenure (another clear violation of “anti-incumbency”), the reason lay according to most commentators, initially in the appeal of “Thatcherism” and later in her “success” in the Falklands War. In short, the “anti-incumbency factor” holds sway in the discourses by pundits in the Indian media in a way that it does not elsewhere.

International finance capital however is much smarter than these pundits; or at any rate it has much sharper instincts. It sensed the uprising from below; it sensed the threat implicit in this verdict, not necessarily to the “reform package” as a whole immediately, but to the regime erected by the BJP-led government over the last few years, which allowed it to have an unprecedented sway over the Indian economy, a regime of disinvestment and of deliberately nurturing a stock-market boom where even India’s oil sector was up for grabs by a speculator like Warren Buffet. And it responded by withdrawing funds from the stock-market, and even from the country, bringing down the Sensex as well as the rupee. If the expected electoral result was merely the outcome of an anti-incumbency factor, so that a bunch of tweedledees who had been in power for some time would now merely make room for a bunch of tweedledums, with nothing more at stake, then why should finance capital react the way it did, upon the arrival of the Exit poll results? Obviously its instincts were sharper than those of the poll-pundits. It sensed a threat to its newly acquired and growing hegemony. And it displayed the temerity to blackmail the political formation that was expected to be victorious into respecting its hegemony and ignoring the popular verdict.

The brazenness of it is striking, and the BJP’s reaction to it is typically that of a toady. What international finance capital is openly demanding is a commitment, on the part of the political formation that is coming to power, that, no matter what the wishes of the electorate may be, it must continue its hegemony over the Indian economy which the BJP-led government has yielded to it. The people may vote any way they like; but it must rule. And what does the BJP president Venkaiah Naidu say? Instead of declaring that the people are the sovereign and a bunch of international speculators operating on the stock market cannot hold society to ransom, he actually wants people to vote in the manner that the international speculators want, using the speculators’ wish as an argument! This is toadyism with a vengeance. It is important to ensure that the political formation that comes to power in the coming days does not succumb to bullying by international finance capital and does not betray the peoples’ mandate.