After The Victory, The Struggles Ahead Begin

Utsa Patnaik

THREE weeks ago the Indian people inflicted a resounding defeat on the government of the communal-fascist forces in this country. All right- minded people have heaved a sigh of relief as that lowering, uncivilized incubus, which had clouded and contaminated our every waking moment like a nightmare, has been relegated to the periphery of the political scene. Let us make no mistake: the incubus is still there, the communal –fascist forces are only in temporary disarray: they will soon reorganize to create every type of mischief and try to subvert the peoples’ mandate in every possible manner. For the present, however, their summary removal from the centre of the political stage by the people has created a historic opportunity for not only undoing the severe damage which has been done by these forces over the last six years but for pressing ahead with measures to improve the welfare of the masses. This opportunity has to be seized and utilized with the utmost seriousness and dedication by the progressive forces.

Before discussing nature of the tasks ahead let us briefly look at the remarkably unedifying role that the print and electronic media in this country have played in the recent past. With a handful of honourable exceptions, there has been a wholesale and uncritical acceptance by the mediapersons of the inhumane neo-liberal agenda of global finance capital and correspondingly the most sickening sycophancy has been displayed by them to the leaders of the communal-fascist forces who have been implementing this agenda in this country for the last six years, whether through repeated inane talk of the alleged “Vajpayee magic” in The Hindu or the fatuous statements placing Vajpayee above  Nehru in the Financial Express.  The opportunistic transfer of sycophancy to other predictable agents after the election results underscores the fact that contemptible expediency rather than principle governs their behaviour.

THE ROLE OF THE MEDIA

The role that should be played in any healthy society, by the press and electronic media in presenting information and events objectively, and in acting as watchdogs in the interest of promoting the greater public good, has been abdicated in favour of pushing the partisan viewpoint of a tiny segment of the population (less than one-tenth of one per cent) which plays the stock market and is integrated with the aims of global finance capital. The interests of the millions of working people of this country who have been suffering bitterly under the neo-liberal policy regime of finance capital, have been ignored by the mediapersons and there has been active connivance in spreading the disinformation that the former government wished to spread, that somehow it was economically necessary to sell the country’s assets to imperialism in its modern avatar of international finance capital. The media have ended up virtually by acting as dalals to a tiny handful of financial speculators, vis a vis the general public.

At no time was this more evident than the media’s hysterical treatment of the recent post-election fluctuations on the share market, where every downturn in share prices was presented in both the press and by television channels, as though it was a grave crisis, and the direct reaction to policies of employment generation and halt to PSU disinvestment announced by the new government. The media have been making out as though the very mention of no longer following the traitorous policy of the former rulers in selling off the country’s public assets to foreigners, the very mention of any new development plans benefiting the masses through more employment, was a mortal sin, because it hurt the financial speculators’ ‘sentiments’ and ‘lowered the market’. All values and priorities have been thereby totally inverted: to paraphrase Wilde, the majority of mediapersons have shown that they know the price of everything, and the value of nothing. The basic question is, to whom does this country belong – to the less than one tenth of one per cent of the population, which is sufficiently well off to play the share market for speculative gains, or to the millions of working people who produce the material wealth of this country? This material wealth includes the economic surplus on which the parasitical classes like the speculators the media itself, subsists. It is no part of the automatic birthright of a tiny handful of speculators and their media dalals, that public sector enterprises built up out of the taxpayer’s money, should be continue to be given away for a song to private enterprise, or that the inhumane agenda of finance should continue to be followed no matter how much unemployment, indebtedness and misery it generates. The financial rentiers like all rentiers and speculators, are parasites on the productive body of society, and as Keynes had pointed out it would be in the best interests of society if they were subjected to euthanasia.

GLOBAL FINANCE CAPITAL

Why is global finance capital inhumane, and in what way has the internalization and implementation of its agenda by the late unlamented NDA government severely harmed the majority of the Indian people, to the extent that it has pronounced a firm rejection of these policies in the elections? Finance capital consists of global sahukars who operate on a gigantic scale and it is inhumane because like all moneylenders, financial interests are unconcerned with maintaining material production or peoples’ livelihoods. On the contrary, financiers are obsessed with suppressing levels of economic activity, fearful in case expansion and growth gives rise to inflation, which would lower the real interest rate (the money interest rate minus the inflation rate) they get on the funds they lend. No matter how high actual levels of unemployment and poverty in a country might be, in their desire to control potential inflation, financiers show an insensate obsession with lowering government expenditure (“cutting the fiscal deficit”, “downsizing”) and hence they lower the level of economic activity, thereby raising unemployment and causing massive income losses in the material productive sectors. We have seen the results of the NDA government cutting rural development expenditures to less than 6 per cent of GDP by 2001 compared to 14.5 per cent of GDP (average for the 7th Plan period 1985-90) – a total collapse of rural employment and incomes, hence a huge drop in purchasing power, manifested both in rising levels of hunger (drastically falling per capita absorption of foodgrains) and in industrial recession affecting the major manufacturing employer, the textile sector in particular.

At the same time we have seen that international financiers want all curbs on the free flow of their capital to be removed so that they can access third world financial markets and acquire our assets, which also raises the possibility of their precipitating financial crisis by withdrawing these funds if a more attractive destination emerges. India like other countries opening to global financial flows has exposed itself thereby to the threat of sudden financial crisis, and is forced to hold mountainous forex reserves in excess now of one hundred and ten billion dollars, which involves the irrational practice of “borrowing short to lend long”. If an individual was to take a short-term loan, say of one lakh of rupees from a bank at 6 to 7 per cent interest rate and lend that money to others at a 1 per cent interest rate we would all consider it a foolish thing to do. India is precisely in this position: on a large part of the forex reserves the nation has to pay a high interest to its creditors while the investment of part of the reserves is in long-term foreign government securities earning a negligible rate of return. The forex reserves are costing the nation around 2 per cent of GDP or 9 billion dollars a year to hold, a sum which would be enough to double the present miserably low central health and education budgets.

The contrast is clear. Either the government continues to maintain its current exposure to potentially highly destabilising external flows, is forced to waste 9 billion dollars of the nation’s money every year and still worry about ‘reserve adequacy’, and willy-nilly toes the inhumane deflationary agenda of finance capital which inflicts misery on the people: or, it reduces its exposure to unregulated external capital flows and regains some measure of control over expansionary policies which raise employment and secure livelihoods. The elections have given a clear and strong verdict of the people in favour of the latter. The common minimum programme has been announced already, with excellent schemes for restoring falling employment through an employment guarantee programme and with proposals for restoring eroded food security. An education cess is to finance larger outlays on education. But formulating good schemes is one thing, implementing them in the face of attempted economic and ideological sabotage which is bound to follow, is another. To ensure that the peoples’ will is implemented and that the mandate is not frittered away, requires continuous vigilance and struggle on the part of all progressive forces from this point onwards.

INCREASE IN POVERTY

Above all the progressive forces should discount the advice of the professional establishment economists who continue to spread the untruth that poverty has declined or remained unchanged in the nineties. The policies of the last government have led to a massive increase in poverty, and the task of restoring purchasing power is a formidable one. Immediate food-for –work to give relief from rural distress is essential because the employment guarantee scheme will take some time to formulate and implement. Take one of the worst affected states, Andhra Pradesh where distress suicides continue as expected even after a number of relief measures have been announced by the new government. The official Planning Commission estimate of poverty for the year 1999-2000 is 11 per cent of the population only, and this is based on the bogus procedure of all official and most academic estimates which values the quantities consumed by people 30 years ago, required to give 2400 calories at that time, and applies a price index to update that old poverty line. The actual data on consumption from the NSS Report relating to 1999-2000 shows that 86 per cent of the rural population of Andhra Pradesh consumed less than 2400 calories (see Table A). Thus the official estimate is excluding 75 per cent of the actually poor people from the set it recognizes as the poor. The official estimate of 11 per cent ‘in poverty’ means that the very definition of poverty based on a calorie norm has been silently and dishonestly given up, for it is only by looking at the basic data we see that only those are officially considered to be poor who consume below 1560 calories! For comparison, at the All-India level, 75 per cent of the rural population is found to be below 2400 calories according to the NSS data.

Where the major part of the population is undernourished, targeting makes no sense and a universal PDS is another essential step for enabling the deprived to access food. In subsequent articles we will be taking up the real profile of poverty by individual states, which has been ignored hitherto in the academic literature.

Table A