People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXX

No. 32

August 06, 2006





UPA Govt Must Learn From NDA’s Fate


The debate on rising prices in both Houses of parliament ended in a protest walk out by the CPI(M) and Left parties who expressed dissatisfaction and protests against the finance minister’s callous response. Significantly in the Lok Sabha the protests by the Left parties found an echo in the interventions by Congress members themselves who as the press described it “heckled their own minister”. 


In the Rajya Sabha former food minister Sharad Yadav openly admitted that his government had committed a serious mistake by permitting foodgrains to be included in the commodity exchanges. The BJP benches did not react when he made this comment! 


The following is an abridged version of CPI(M) Polit Bureau member Brinda Karat’s speech in the Rajya Sabha on this issue:


THE point that I would like to make at the outset is that this whole issue of rising prices, skyrocketing prices is directly related to a particular framework of policies, within the neo-liberal framework. And as far as that is concerned, we find that there is a similarity in the policies followed by the NDA government and the current policies being followed by the UPA government. Sir, it was exactly the same position earlier, and, I would request Venkaiah Naidu not to distort what has happened in the past but look at the records even of parliament. Exactly the same speeches which are made by him today were made by the Congress leaders at that time when they were in the opposition and you were the ruling party. But there are those who have remained consistent. Consistent, why? Consistent, because we are not bothered about who is sitting in power and who is not. There is the consistency which is driven by a commitment to defend the interest of the mass of people in this country, and, it is precisely for this reason that the language that we spoke in parliament on price rise when the NDA was in power, the language that we spoke on the streets when the NDA was in power, is exactly the same language that we are speaking today in parliament when the UPA is in power, whether it is in parliament, whether it is in the coordination committee or whether it is on the streets of this country. Rising prices are determined very clearly by the retreat of the government from its very basic duty and responsibility to defend the minimum requirements of the people of this country. 


We have also heard a lot, I am sorry that I have to start this speech by responding to what Venkaiah Naidu has said. But, I found some of the comments quite offensive. I mean, we have heard a lot about barking and biting and who bites in the morning and who bites at night and who barks in the afternoon and so on and so forth. What we are really concerned with, and, I think, Venkaiah Naidu will also appreciate that being committed to the parliamentary system of governance that is the bite of the janta. They have already experienced it in 2004. They have not learnt. In the last five state assembly elections, the bite of the janta ensured that the BJP lost its deposits in most of the seats where its candidates stood. But, they have not learnt. We respect Adarniya Vajpayee ji, it is a different matter that his own party does not do so now. But at least let them heed what he has said. At the recent BJP national executive meeting he advised them to learn from the communists as to how they maintained public support. Let them not learn from us but at least heed the advice of your own leader.




Today, in this short intervention on rising prices, the main focus that I want to make is precisely on those three or four major policies which require to be changed. The first point when we talk about rising prices is its impact in a country where 90 per cent of this country’s workforce is in the unorganised sector with no protection against rising prices and with fluctuating incomes. If a worker earning around 15 to 20 rupees a day has to pay 11 or twelve rupees for a kilo of atta what will be the quality of life? Throughout the world, one of the measurements of poverty is how much does a family spend on its food requirements. Now, Chidambaramji is here, we are hearing so many great examples that he is following the American path. But, I am sure he knows that one of the measurements in America is that if one-third of your family budget is spent on food, you are considered poor. In our country, if that standard is taken, 93 or 94 per cent of our people would be poor, not 26 per cent which these fudged statistics are showing. But, even going by those statistics, today, nine out of ten families in rural India and seven out of ten families in urban India are spending 60 per cent of their budget on food requirements. And, that is not to say those food requirements are met or that they are getting 2,400 calories a day which is the minimum which is required. But, this is the amount that is spent just on food. Therefore government's responsibility becomes even more important and it is in this context that people have to face the cruelty of the neo-liberal framework, the cruelty of a budget which cuts down on food subsidy, the cruelty of a ministry, when prices are rising, which brings out a draft recommendation which is actually going to be considered by the cabinet to cut APL/BPL quotas, to increase prices in the ration grains and to cut down the requirements in the name of the APL. In a situation where our people require government's support to meet the very basic needs for human survival, which is food, in such a situation, the UPA Government, following faithfully the footsteps one by one set by the NDA Government, is doing precisely the opposite. 


One of the reasons for this dismal situation is the five times hike in petrol and diesel prices. As far as our Party is concerned, we know that international oil prices are going up. We are very well aware of it. But what did we say to Chidambaram and his colleagues? International prices of oil are going up, but why do you want to conceal the fact that you have benefited from international prices going up by your framework of duties and taxes? Out of every one rupee, which we are expected to pay for petrol, 55 paise of that is tax. Of which, the largest share is that of the central government, followed by the state governments. It is a fact with regard to the state governments also. But the largest share is of the central government. We have given a note to this government. We have shown to them how when prices are going up, and they are burdening the common people, the net increase in their revenues has been Rs 38,000 crore. At present, the government's revenues from increased prices is Rs 1,26,000 crore. We told this government that you cut your duties, you cut your taxes, and save the common man and women from the burden. But what have they said? "Ask the state governments to do it." That defies logic. We have said that we are prepared to do it. You first cut your taxes; you cut your duties; you bring it down and save the common people from the burden, and undoubtedly, the state governments will follow suit. But you have refused to do it. 


Therefore, the first demand that we make is this. We want the government to answer this. The Left has given a note to the government, which is based on the facts and which is based on logic. Will the government respond to that? Is the government prepared to take the sense of this House and reverse its totally anti-people five times hike of diesel and petrol prices? 




The second point I want to make is do not destroy our Public Distribution System. Under the NDA government, we have seen the most dreadful, dismal situation of six crore tonnes of foodgrains rotting in godowns, while people of this country were starving and then they exported the grains. They did not want to give it to the BPL families at a lower price, but they gave it to foreign traders at Rs 4 a kilo We know what their record was. But what do we find today? It is a total and utter mishandling of the food economy and the procurement policy. I have raised this before on the floor of the House and I am sorry to say that this government has failed utterly to give any convincing answer. First of all, they put the target of procurement only at 16 million tonnes and procured only around 9 million tonnes. It is not that wheat production has fallen drastically. It's stagnating. We know it is stagnating. We are concerned about it. Do not diversify at the cost of food security. But what about procurement? They have removed all the restrictions which were there in the Agricultural Produce Marketing Act. They have allowed big traders including foreign traders to go anywhere in the country to procure wheat. They deliberately keep their own procurement price down so as to leave the farmers with no choice but to sell to the big traders. And then, having done that, they destroy the Public Distribution System by huge slashes in wheat allocations. I want to draw the attention of the House to this. The most recent figures about monthly allocation. In the Antyodaya, the monthly allocation of wheat is slashed from 2.81 lakh tonnes to 2.55 lakh tonnes. The BPL allocation is slashed from 5.25 lakh tonnes to 4.46 lakh tonnes. And as far as APL is concerned, they have slashed it from 15 lakh tonnes to 1.94 lakh tonnes. In other words, the entire PDS is being destroyed systematically and one of the main reasons – the links between low procurement and slashing wheat quotas – is precisely because this government wants to retreat from its basic responsibility of providing food security to the people of this country. 


They say they are giving compensatory rice quotas. Where did you have these discussions? Have you discussed it with the state governments? Have you discussed it here in parliament? So, clandestinely, they are, in any case, destroying the Public Distribution System at a time when the basic demand has to be, to strengthen the Public Distribution System. In that, we have been constantly saying, universalise the system, give up these BPL and APL business because in the name of APL, what you are actually doing is, you are dividing the poor because of the vague statistical manipulations to identify BPL. Again and Again, we have raised it in this House. Sharad Pawarji gave us an assurance that they are going to set up a committee along with the MPs in which we can look at this. They have not done it. But, in the meanwhile, saying that there is a very poor offtake from APL, they have actually drastically reduced the rights of the APL cardholders where, in fact, APL cardholders are those who earn more than Rs 311 a month.


Our demand is, strengthen the Public Distribution System and include other essential commodities. Why can not you include dal? We know what this government's policy is. Successive governments have absolutely neglected the production of pulses in this country. In the last 30 years, production of pulses increased from 10 million tonnes to 15 million tonnes. This is the result of your food policy. Five million tonnes' increase in 30 years in the production of pulses in this country! It's the neglect of the most important source of protein, dal or pulses. We want the government to pay more attention to production of pulses. Immediately it is necessary to include oil, dal and other essential commodities in the Public Distribution System so as to afford some minimum relief to the people of this country. 




Another crucial issue is that of futures trading. It is the NDA government which lifted the ban of trading in essential commodities; 90 commodities were included, including the essential commodities, in futures trading. And we know today how there is a huge expansion of speculative capital in the future trading market. When we raised it with the UPA government, they said, "No, no; farmers will benefit." How are farmers are going to benefit? Are farmers trading on the stock market with their produce? No they are not. Once they sell their produce that is the end of their part of the contract and their income from it. It is the buyers and those who trade in contracts who benefit, not the farmer. You just take one example of wheat. Last year, three months future contracts for wheat was around Rs 680. One year later, what is it? It has gone up to Rs 900. So, what is happening is, the speculative manipulations of essential commodities in futures trading markets which were allowed by the BJP-led NDA government impact the spot market prices causing havoc with prices of essential commodities. And it is essential that we have a ban on essential commodities in futures trading. Even organisations like UNCTAD, have warned against futures trading and have advocated keeping certain commodities out. 


And, lastly, on the Essential Commodities Act, once again, I have to say that there were two decisions taken by the NDA government. One was to reduce the list of essential commodities under the Act by bringing it down from 79 to 50. The second thing they did, by another government notification, was to remove all restrictions on the amount of stock any trader could keep. No restriction on movement, no restriction on stocks, no restriction when you have to bring them into the open market. In other words, that was a licence for hoarding and profiteering. 


We want to know from this government: Are you or are you not going to rescind the pro-trader changes which were made in the Essential Commodities Act? Are you or are you not going to rescind the pro-hoarder changes which were made subsequently in that Act? As far as futures trading is concerned, are you not going to ban – this was a policy of your own previous governments – futures trading in essential commodities? Having said this, I hope that this government will learn lessons from the past and will prevent itself from taking the disastrous path which its predecessor took and which the people so aptly responded to in the 2004 general elections.