People's Democracy

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


No. 21

May 31, 2009




�Struggle For Revolutionary

Social Transformation�

M Venugopala Rao


�The global crisis of capitalism has raised to the forefront the basic fact that capitalism cannot solve a single issue faced by humanity in the world. Without ideological preparations of the working class, it is not possible to launch powerful struggles against capitalist system. We must tell the workers that it is not sufficient to fight against the effects of exploitation. We must ultimately prepare ourselves to fight against the cause of exploitation itself. We should also call on the working class to be prepared to fight against the moribund capitalist system itself. This alone would ensure establishment of a world without crisis and exploitation.  History has placed the responsibility on the working class of the world to be the �grave diggers� of capitalism.� 


M K Pandhe, member of the Polit Bureau of the CPI(M), reasserted this call while delivering Sundarayya memorial lecture on �Global Economic Crisis and Its Impact on the People of India� on May 20, 2009. This lecture was  organised by Sundarayya Vignana Kendram Trust in Hyderabad on the occasion of the 24th death anniversary of Comrade P Sundarayya.


Pandhe said he was deeply impressed by the simple and unassuming lifestyle of Comrade PS, recollecting his stay with the latter at Kolkata for about a decade. Paying homage to Comrade Sundarayya, Pandhe said he was one of the most outstanding Marxist-Leninist in India whose contribution to the revolutionary movement of our motherland was of paramount importance to the new generation and his contribution as a former general secretary of the CPI(M) was of immense importance. As a champion of the cause of toiling people of India, Comrade PS  worked tirelessly throughout his life in defence of their vital interests. The self-sacrificing and spotless life of Comrade Sundarayya made him respectable even among those who do not accept Communist ideology, he said.




Narrating the genesis of the economic crisis that broke out in the US in the middle of September 2008 and subsequent developments, Padhe explained the bail out packages announced in India and elsewhere in the world by capitalist governments and made it clear that such packages were only an attempt to save capitalism and the profits of capitalists. Therefore, it is the duty of the people of India to fight against every attempt of the capitalist class to pass on the burden of the global financial crisis on the shoulders of the working class, he said.


The global financial crisis had exposed the utter failure of the market economy advocated by the triumvirate World Bank-IMF-WTO, Pandhe asserted.  The phenomenon of concentration of capital had given rise to the growth of monopolies to control the global market and the cut throat competition among the leading multinational corporations to increase their market share had given rise to several malpractices among the big capitalists with tacit support from the capitalist governments, he explained. A bubble economy was created and, as warned by several economists, the bubble burst in the US in September 2008. The bailout packages prepared by several advanced countries included partial or full nationalisation of banks or other financial institutions and taking over the toxic assets of financial institutions. Those who were advocating privatisation of banks and financial institutions are today advocating taking over of those institutions by the government as a means to save them! The total bailout packages all over the world are estimated to be above $42 trillion, the CPI(M) leader explained. To overcome the impact of economic meltdown, most of the capitalist countries had imposed job cuts, deteriorating working conditions and even wage cuts on the working class, he said. Several restrictions and even ban on migrant workers in advanced capitalist countries were resorted to in a big way. In the name of taking protectionist measures, the US and other countries have been advocating purchase of their domestic products to reduce dependence on imports. These measures would adversely affect the developing countries whose exports would be drastically cut, Pandhe pointed out. The massive demonstrations organised prior to, and during, the G-20 meeting in London in the first week of April 2009 and the call given by the WFTU to organise demonstrations in all the countries to oppose the policies of globalisation and capitalist meltdown reflected growing discontent prevailing among the people in the world against the policies of globalisation and neo-liberalism, he explained. While the entire capitalist world was engulfed in a deep crisis, the impact on the socialist countries was minimal. The package implemented by the Chinese government to improve the living standards of the people which would absorb the additional production generated due to expansion of industrial and agricultural output, and the steps taken by Vietnam for increasing domestic consumption and maintain growth rate were mentioned. Cuba and North Korea had not faced the impact of the global slowdown, because their economies did not have many relations with advanced capitalist countries, he said. The global financial crisis has undermined the influence of the US in the world and shattered its dream of dominating the world economy. The hegemonistic policies adopted by the US government with a view to creating a unipolar world had received a big jolt and possibilities of emerging of a multipolar world had become more real, he explained.





Contrary to the claims of the UPA government that the fundamentals of Indian economy were strong and that it was insulated from the global financial crisis, the impact had begun soon to be felt when Indian exports had started falling and domestic units were forced to cut their production, Pandhe said.   Recollecting the bailout packages announced by the RBI and the UPA government, he made it clear that the net result of the policy of the government was that the capitalist class was trying to put the burden of the crisis on the shoulders of the working class and the toiling people. The liberal concessions given to the capitalist class �  loans and reduced rates of interest, tax cuts and reduction in excise duty on some items, etc. �  were recovered by increasing tax burden on the common people. The stimulus package offered by the government of India had failed to overcome the crisis but only added to the coffers of the super rich. The UPA government had not taken any measures to restore the import restrictions which were withdrawn due to conditionalites of the WTO.  Foreign goods continue to enter Indian market, adversely affecting the Indian commodities. The  UPA government failed miserably to protect the large number of workers who had lost jobs as a result of the meltdown of the economy. Though hours of working for the workers were increased and lay-offs declared without taking statutory permission from the authorities and without paying wages to the workers, and units were being closed illegally, blatantly violating labour laws. Pandhe charged the ministry of labour of conniving with the managements.  The criticism of the policies and the demand made by Indian Labour Conference in February 2009 for full implementation of the labour laws and introduction of employment insurance scheme had fallen on deaf years of the government, he said.


Explaining the role played by the Left parties in preventing the UPA government from disinvesting profit making public sector undertakings; from passing a bill in the parliament to privatise the pension scheme; from putting PF money of workers in the share market; from increasing FDI in banking and insurance companies; from allowing entry of FDI in retail trade; from handing over Indian banks to MNCs, etc., Pandhe made it clear that it had prevented the global crisis from having wider impact on the Indian economy.  The trade union movement organised three nationwide strikes during the UPA regime to oppose the policies of globalisation which compelled the UPA government to slowdown its neo-liberal reform agenda and saved the country to some extent. Despite the demand by the Left parties to ban operation of participatory notes in the share market, the government had withdrawn certain restrictions imposed on them earlier by itself. The participatory notes had become a device to make black money white or to permit hawala money into share market. The foreign institutional investors who operated in Indian share market were also utilising those notes for making quick money and indulging in clandestine deals, he explained. The harrowing swindle estimated to be around Rs 8000 crore by the management of Satyam Computer Services had highlighted how the corporate undertakings have been minting money by resorting to several illegal practices with the connivance of the state administration and close contacts the Ramalinga Raju family had with the chief minister of Andhra Pradesh. The length to which the degenerated capitalism could go was exposed in this case, Pandhe said. It is a clear case of a capitalist management taking full advantage of a deregulated free market economy with full patronage of the state administration. But the defenders of capitalist system were trying to cover up such instances at the cost of genuine development of national economy, he said.  There are several such Satyams which are yet to be exposed. Demanding the government to confiscate the huge resources stashed away in Swiss banks by the Indians and use the same for improving the standards of living of the people, Pandhe accused the government of protecting several ministers, bureaucrats and industrial houses who might be holding such secret accounts.


Explaining how the global economic meltdown had affected women most severely, Pandhe said that the capitalist society was trying to use women as a cheap source of labour, increasing their hours of work and lowering their earnings.  The conditions of Anganwadi, ASHA and mid-day meal workers is a clear example of this. The conditions of women workers in beedi and plantation industry had further been deteriorated, invoking them to adopt a path of struggle, he said. Quoting from a memorandum of the National Commission for Enterprises in the Unorganised Sector submitted to the government, Pandhe explained the adverse impact of the global economic crisis on the informal sector. The commission earlier estimated that 77 per cent of Indian population in the unorganised sector live with an average per capita daily consumption below Rs 20 per day. The commission now observes that during the current slow down, it is precisely these people, the poor and vulnerable engaged in informal sector enterprises or formally employed by the formal sector, who will be affected the most adversely. The commission advises the government to pay focused attention to protect, at the least, the livelihood security, employment and income of the vast majority of the people,  estimated to be 88 crore, who are either poor or vulnerable and so doing stimulate overall economic growth.


Pointing out several measures to help the worst affected people so that they can face the crisis and maintain their standards of living demanded by the Left parties and the trade union movement, Pandhe underlined some of the measures to be taken urgently.  The government must take steps to generate jobs and demand in the economy through public expenditure in infrastructural projects. Employment guarantee scheme for urban and rural poor and  middle class sections of the society, as visualised in the national common minimum programme,  with a minimum of 180 days job as proposed by ILO should be implemented.  The minimum wages of all informal sector workers should be increased at least by 20 per cent. Financial assistance should be arranged by the government to several lakhs of people who are forced to do the work of hawking and vendoring to meet both ends meet. Forward trading in essential commodities must be banned. The government should give credit to the small and tiny sector at concessional rate and increase their share of credit sizeably. The government must give required facilities of marketing to them through a network of sales organisations. The government must invest substantially in granting social security benefits to the vast deprived sections of the society, Pandhe pointed out.


C Sambi Reddy, managing trustee of Sundarayya Vignana Kendram, presided over the meeting. Y Siddaiah, secretarty of the trust, and Telakapalli Ravi, convenor of Sahiti Sravanti, also participated in the programme.