People's Democracy

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


No. 01

January 03, 2010



Strengthen Popular Struggles in the New Year

For a Better India


People's Democracy wishes its readers a Happy New Year.


It is only customary that as the year ends an evaluation and assessment is made in order to strengthen popular struggles to improve the quality of life for the people in the coming year.



As 21st century's first decade ends, globally capitalism has exposed its historical limitations with the economic recession continuing. Large scale destruction of wealth, declines in industrial production and global trade has, according to the International Labour Organisation, increased global unemployment by 61 million people enlarging the total to 241 million. This is accompanied by a sharp drop in the medium growth in real average wages of the working people. This declined from 4.3 per cent in 2007 to 1.4 in 2008 and is expected to have dropped even further in 2009. Both these put together have according to the World Bank pushed an additional 89 million people into poverty taking the global figure to above 1.5 billion.


As we have repeatedly noted in these columns since the global capitalist crisis began, a political alternative to capitalism in the form of socialism is the only course open to humanity in order to liberate itself from such oppression and exploitation. The popular struggles to strengthen such a political alternative needs to be intensified in the coming year and decade. 


While the Indian ruling classes may be patting themselves on their backs for having remained relatively insulated from global shocks, mainly due to the Left blocking many a financial liberalisation reform under UPA I, the majority of Indians, mainly the poor have been subjected to relentless battering of rising unemployment and high food prices. This obviously has pushed many more people in our country into poverty.


The prime minister struck a very defensive tone at the recent conference of the Indian Economic Association by stating that �the percentage of the population living below the poverty line has certainly not increased.� There is an obvious realisation that the economic policies of liberalisation or reforms has ended in creating two Indias � a Shining and a Suffering. In an admission of guilt of sorts, he said, �based on the available evidence, we can claim that there is no evidence that the new economic policies have had an adverse effect on the poor. He also said �in fact, it (poverty) has continued to decline after the economic reforms atleast at the same rate as it did before�.


This in fact tallies with the latest official estimation of the incidence of poverty. The Suresh Tendulkar Committee, set up by the Planning Commission, has now put out an estimate that over 37 per cent of Indians live in poverty as compared with the existing officially estimated 27.5 per cent. Earlier, the National Commission on Enterprises in the Unorganised Sector estimated on the basis of consumer expenditure data that 78 per cent of Indians are being forced to survive on less than Rs 20 a day. This implies that nearly three- fourths of our population is today living in poverty.


There is a great deal of controversy on the methodology adopted for arriving at correct estimations of poverty. There has been a general tendency of gross underestimation. Notwithstanding this, it is now officially recognised that the number of people living below the poverty line has been growing in absolute numbers.


This also converges with the fact that many a state government has challenged the central government's estimations of those living below the poverty line (BPL). This has become significant since the budgetary allocations for rural development programmes and the supply of foodgrains to the states from the centre are determined by these estimations. The UPA government's commitment to the aam aadmi turned out to be more of a deception in the wake of gross underestimation of the BPL population.


Simultaneously, the quality of livelihood of the aam aadmi has sharply declined due to rising food prices -- by a whopping 20 per cent this year.  Despite all official explanations of a demand supply mismatch, worst monsoon in 37 years etc., the fact remains that the government has completely failed in arresting this runaway inflation. Much of this rise in prices can be attributed to speculative trading in these commodities. Since April 2009 the companies that have invested in food stocks have reported returns ranging from 150 to 300 per cent. Through these columns we had repeatedly pointed out how speculative trading in commodities has been contributing to such inflation. In the single month of June 2008, the total value traded in the commodity exchange was over Rs 15 lakh crores. Such high volumes are traded with the expectation that there will be greater returns. Such greater returns however can only come when the prices of these commodities rise above the levels at which they were when the trade took place. 


Therefore, there is no other way to control food prices except to crack down on such speculative trading and by banning the forward/futures trading in all essential commodities. This must be accompanied by strengthening the public distribution system. Unless this is done, the double whammy assault on the aam aadmi cannot be  prevented.  Given their inherent character, the Indian ruling classes refuse to take such steps. Greater avenues for profit maximisation are created at the expense of imposing further burdens on the people. This once again confirms the fact that the concern for the aam aadmi is nothing but a deception.


Under these circumstances, the prospects of a better livelihood for a vast majority of our people will crucially depend on increased governmental outlays for poverty alleviation programmes. A sharp increase in such allocations appear remote given the large shortfalls in revenues. During the first eight months of this fiscal year, indirect taxes under the three major heads � excise, customs and services � have yielded close to half the budgetary estimation. Similarly, the direct tax receipts have also been less than half of the budget estimate. It is unlikely that these shortfalls will be made up in the last quarter of this fiscal.


The vast majority of Indians can expect an improvement in their livelihood in the coming year only if the UPA government redoubles its efforts to mobilise resources for large public expenditures that can combat both poverty and unemployment. During the last fiscal the government announced that it had foregone legitimate tax revenue to the tune of Rs 4.18 lakh crores. One good way to begin the new year is to resolve not to repeat this and instead transfer this amount to public investments that will both create new jobs and improve the quality of livelihood of our people. 


The only way by which the Indian people can achieve this is by strengthening the popular struggles against the UPA government's economic policies. It is the strength of such popular pressure that must be intensified in the new year so that we can create a better India where the concerns and welfare of the common Indian are addressed in right earnest.


Once again wishing all of you a Happy New Year and the resolve to strengthen popular struggles for creating a better India for its vast majority.