People's Democracy

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


No. 09

February 28, 2010



President’s Address:  Rhetoric

Bereft of Tangible Relief


THE president of India’s customary annual address to the joint session of parliament on the first day that it meets in any calendar year is designed to contain a balance sheet of the government’s performance in the past year as well as a declaration of intent for the future year. It hence covers the work of all ministries and their programmes for the coming year. While these shall be the subject matter of scrutiny in the days to come, the essence of this government’s objective are outlined by the president as the following: “Since assuming office in May 2009 my government has worked single-mindedly to build on the achievements of its earlier term to deliver the promise of faster and more inclusive growth. The aam admi was and is at the core of this promise; the aam admi had to be protected against the ravages of the worst ever global economic crisis since the great depression and against the failure of the monsoon in large parts of the country in mid-2009.”

Further, the address states, “there has been an unhappy pressure on the prices of foodgrains and food products”. While seeking to cover up the utter failure of the government in containing this runaway rise in the prices of all essential commodities, the president of India reflected the government’s callous cynicism by stating that “higher prices were inevitable given the shortfall in domestic production and prevailing high prices of rice, cereals and edible oils globally.” In other words we are being told that the government had no options before it to provide relief to the people on this front. Therefore while suggesting that the people “inevitably” had to suffer this price rise, the president ironically suggests that the price rise is due to the, “payment of higher procurement prices to our farmers and the impact of higher public spending on programmes of rural development which have successfully raised the incomes in rural areas”. The people are therefore to be blamed for this price rise because they are consuming more! Sounds uncomfortably similar to George Bush’s assertion over a year ago that global food prices are on the rise because people in India and China are eating more!

Naturally therefore, the president does not state the obvious truth that this price rise is in the main due to the refusal of the government to undertake the obvious measures that are needed. For one, much of this price rise is due to speculative commodity trading. Trading corporates have reported annual profits ranging from 150 to 300 per cent while foodgrain prices have been rising at an annual rate of nearly 20 per cent. Further, the extremely injudicious decisions taken by the government, eg exporting sugar instead of creating a buffer stock when all indicators showed that the production would be much less than the consumption demand has led to sugar selling at more than Rs 50 a kilo.

One sure way of containing prices would have been through strengthening the public distribution system and selling all essential commodities at controlled prices. Acting quite to the contrary, the government decided to reduce the allocation of foodgrains to the states for the above poverty line category, its quantity to the tune of nearly 70 per cent. For instance, Kerala which was receiving 1.13 lakh tones at Rs 8.90 a kilo under this category was reduced to mere 17,000 tonnes. Now the president of India talks of the government releasing “30 lakh tonnes of wheat and rice in the open market over the next two months”.  This ironically is being done by offering the states to procure rice at Rs 17 a kilo instead of Rs 8.90 earlier. Far from reducing the prices, this will only compound the problem further.

Thus by all indications the president’s address does not provide any confidence that the main problem facing the Indian people will be solved by the government. On the contrary, there seems to be advance explanations for greater burdens that will be imposed on this front in the coming days.

Coming to the president’s assurance that the aam admi was protected against the global recession “by strong policies of administering a domestic stimulus to the economy which has yielded handsome results…….. At a time when industrial countries have experienced limited growth India has continued to grow at an impressive rate.” Naturally, there is no reference to the fact that over a crore of people lost their jobs and the people’s misery has been compounded by this dual assault of job loss due to global recession and the price rise in essential commodities.

There is however no indication whether these stimulus packages will be continued or not. The Rs 2.18 lakh crore stimulus in various packages released last year was seen by the RBI as having increased the money supply in the economy providing grist to the inflation mill. The RBI therefore has set out monetary policy measures aimed at reigning in Rs 36,000 crores. While this would dampen the impact of the stimulus packages, these packages themselves may either be withdrawn or shrunk given the concerns of international finance capital and the Indian ruling classes over the burgeoning fiscal deficit.

In any case, the gains from such stimulus packages have accrued more to the corporate sector and the ruling classes while people’s misery has only compounded. Thus in the tackling of the impact of the global recession on India, the government has further widened the hiatus between the shining and suffering Indias.

Genuine concern for the aam admi can only come about if the neo-liberal trajectory that widens the gap between the two Indias is reversed. Experience of the last two decades shows that notwithstanding all talk of inclusive growth, the gap between the rich and poor in India has widened dramatically. When Manmohan Singh as the finance minister ushered in the new liberal regime in 1991 with the budget that year, it was officially estimated that 34.5 crores of Indians were below the poverty line – or nearly 41 per cent at that time. In 2009, according to the latest Planning Commission sponsored  Suresh Tendulkar Report, 37.2 per cent of India or 43.8 crores are below the poverty line today. While percentages may serve academic analysis, the real world sees absolute numbers. These two decades of neo-liberal economic reform have seen nearly 10 crore more Indians sliding into poverty. The World Bank however, estimates that India is home to 1/3rd of the world's poor, with nearly 46 crore people or 42 per cent under the global definition of poverty. 46 per cent of the world's malnourished children are Indian. In 1991 India ranked 121 out of 160 countries in the Human Development Index, two decades later, we are at 134, amongst 182 countries. Therefore the findings of prime minister appointed  National Commission for Enterprises in the Unorganised sector, which showed that 77 per cent of Indians survive on less than Rs 20 a day, are no surprise to the ordinary Indian.

The big question for India before this budget is whether it will change the trajectory of the last twenty years and more meaningfully towards an inconclusive growth path. While the images of an 'emerging' India rubbing shoulders with the G-20 at the high table dominate media attention and raise aspirations of people of a super-power status, a vast majority of our people continue to aspire to just get the next meal. The take over of public utilities and till-recently state-supported social sectors like education and health by the market forces have added to the woes of the people. The latest date of the NSSO shows that at least an additional 4 crores of people have been pushed into poverty due to expenditure on health alone. Will this budget attempt to reverse these trends? The president of India's address to the joint session of the parliament, thus, is a mere rhetoric of flagship programmes of Bharat Nirmaan and concern for the aam aadmi which will not provide any tangible relief to the people.

(February 24, 2010)