People's Democracy

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


No. 34

August 22, 2010



False Claims; Real Burdens


THE prime minister has delivered the customary address to the nation from the historic Red Fort on the 63rd anniversary of the country’s independence.  Much is being made of the fact that this seventh speech of Dr Manmohan Singh is the third highest in the history of independent India. Jawaharlal Nehru had delivered 17 speeches while Indira Gandhi delivered 16.  However, the content of the address, delivered in a dry business like fashion, betrays the approach of the government which is more like `keeping the ball rolling’ rather than a government announcing new initiatives for creating a better India. 


The prime minister said: “We are building a new India in which every citizen would have a stake, an India which would be prosperous and in which all citizens would be able to live a life of honour and dignity in an environment of peace and goodwill. An India in which all problems could be solved through democratic means. An India in which the basic rights of every citizen would be protected.”


Noble declaration of intent indeed, but far removed from the reality?  Through these columns, we had repeatedly shown that there are two Indias in the making. On the one hand, the number of US dollar billionaires has doubled in the last couple of years, who collectively hold assets worth one-fourth of our country’s GDP.  On the other hand, over three-fourths of our people barely subsist on less than Rs 20 a day. The agrarian distress continues unabated with no end in sight to farmers’ suicides. Clearly, `all citizens’ are not living `a life of honour and dignity’. 


The prime minister declared that his government “wants a food safety net in which no citizen of ours would go hungry”. In order to achieve this, he says, “We need to work harder, so that we can increase the agricultural growth rate to 4 per cent per annum.” In a situation where even after six decades of independence, our agriculture remains dependent upon the vagaries of the monsoon, there is no reference to increase public investments in agriculture.  During the last two decades of neo-liberal reforms, public investment in agriculture has been less than 2 per cent of our GDP annually. Unless this is reversed, it is impossible to create an India without hunger. The only announcement that the PM made was that “the Borlaug Institute of South Asia is being established in India. This institute would facilitate availability of new and improved seeds and new technology to the farmers….” This is rubbing salt in the wounds of our farmers. Unless the living conditions of our farmers are improved and they are not burdened by growing indebtedness, mere availability of technology will not solve the problem of hunger in India. This can only be addressed with massive hikes in public investments in Indian agriculture. This is something that the prime minister’s neo-liberal economic reform trajectory does not allow. 


Though there are customary references to `difficulties’ caused by `high inflation’, nothing concrete in terms of providing relief to the people has been spelt out.  On the contrary, there is an ironic justification of this price rise as being the consequence of providing higher prices to farmers.  “One affect of providing higher prices to farmers is that food prices in the open market also increase.”  Claiming credit for enhancing the minimum support price for wheat to Rs 1,100 per quintal and that for paddy to Rs 1,000 per quintal, the prime minister ascribes this as the main cause for the continuous hike in prices of all essential commodities.  If the farmer is getting Rs 11 paise per kilo of wheat, he is buying atta paying atleast Rs 14 per kilo in the open market.  Likewise, a farmer getting Rs 10 per kilo of paddy is buying rice paying atleast Rs 20 a kilo in the open market. Clearly, Mr Prime Minister, this phenomenal hike in the prices of all essential commodities is not due to higher MSP but due to phenomenal profits that the middlemen are making in the trade of essential commodities.  Yet, this government refuses to ban the speculative futures/forward trading in essential commodities. 


Further, the prime minister justifies the hike in the prices of petroleum products stating that the country cannot afford the increase in `subsidy’ on these products.  Repeatedly in the past, in these columns, we have exposed the gigantic fraud that is being committed on the people by claiming subsidies when none actually exist if high taxes on import of these products are removed and prices are calculated according to domestic costs of production and not on parity with international prices. These arguments are not being repeated.  Sustaining this fraud on the people, the prime minister justifies the hike in the petroleum product prices stating that “if this had not been done, it would not have been possible for our budget to bear the burden of subsidy and our programme for education, health and employment of the poor would have been adversely affected”.


A not so strange, yet a vicarious justification. Imposing greater burdens on the people, in the name of providing them better livelihood is the classic expression of deceit of neo-liberalism. If the resources required for improving the country’s social infrastructure are the concern, then the prime minister must answer why his government has foregone huge amounts of legitimate revenue in the last two years. According to this year’s budget papers, the revenue foregone in 2008-09 was Rs 4,14,099 crores.  In 2009-10, this figure was 5,02,299 crores, i.e., together amounting to over 9 lakh 16 thousand crores.  Even if we were to deduct the concessions given in excise and customs duties (the so-called `stimulus’ to combat global recession), the direct tax concessions to the corporate sector was Rs 66,901 crores in 2008-09 and Rs 79,554 crores in 2009-10.  The concessions given to high-end personal income tax payers was Rs 37,570 crores and Rs 40,929 crores respectively.  These concessions to the rich, in these two years, total to nearly rupees 2,25,000 crores. Many, many times higher than the so-called `subsidies’ for the poor.


While burdening the poor with higher prices, these are the concessions that this government is doling out to the rich. Unless the current neo-liberal trajectory is jettisoned and a policy framework that economically empowers the whole of India and not a miniscule minority of the ruling classes is brought about, no meaningful change towards creating a better India is possible. In the absence of such a radical shift in the policy direction of our country, the prime minister’s conclusion on this Independence Day that “the day when our dreams will come true is not far off” sounds hollow.  Worse, this signals the possibilities of heaping further miseries on the people. 


The people’s resolve on this Independence Day must, therefore, be to redouble our efforts through popular mobilisations to force the government to change its policy direction in order to build a better India for all our people.