People's Democracy

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


No. 34

August 22, 2010



People's Alternative to Neo-Liberal Policies


Pinarayi Vijayan 


THE capitalist path of development in the post-independent India was intended to reinforce the interests of the bourgeois-landlord ruling classes. The ruling classes had failed to liberate the economy from the yokes of feudalism by abolishing landlordism and implementing radical land reforms. This resulted in a deep crisis in the economy and made the ruling classes to depend more on the imperialist powers, and subsequently shifted towards the neo-liberal policies on the pressure of the US as part of the imperialist globalisation.  


After the collapse of the Soviet Union, a milieu was fashioned globally to facilitate such policies. The CPI(M) and the Left parties had, during this period, unleashed relentless struggles against the neo-liberal policies initiated by the central government headed by the Congress party. Numerous joint actions were also organised during the post liberalisation period with other secular parties against the menace of such policies through broad based platforms. In addition to  combating the central government’s policies that serve the capitalist interests,   using the limited powers of the state governments, the CPI(M)-led governments persistently implemented pro-people policies to ensure possible relief to the people in states like West Bengal, Kerala and Tripura. In Kerala, the perspective of development itself comprised of the components of both the alternative and struggle against the central government’s anti-people policies. The universally known Kerala model of development is the outcome of such indomitable endeavour and stance of the CPI(M). It is a fact that both development perspectives evolved as a result of the divergent political views and its conflict. 




During the UDF government the neo-liberal agenda was eagerly implemented and the fallout has been a sharp deterioration in the overall development of the state. In 2001, the UDF government was led by A K Antony and after three years he was replaced with Oomen Chandy. The Oomen Chandy government also implemented the same policies and consequently around 1300 farmers had committed suicide during this period. The UDF government neglected the agrarian sector and budgetary allocation for agriculture was drastically reduced from 7.2 per cent to 4.5 per cent as compared to the budgetary allocation provided during the previous LDF government.  During this period 25 Public Sector Units (PSUs) were closed and on the recommendation of the Chaudhari committee, the government had decided to privatise the remaining PSUs in the state but failed to do so as a result of stringent protest unleashed by the working class movement. Large parts of the cottage and small scale industries in the state, including cashew, coir, bamboo, beedi, toddy, khadi, handloom etc and the plantation sector suffered severe crisis and devastation due to these policies. The government had put an end to all the subsidies to the coir societies and had even withdrawn the rebate given to the handloom sector.  


Both the health and education sectors in Kerala, which were acclaimed world over, also suffered appalling consequences as a result of such policies. Hardly any doctors were provided in many of the government hospitals and no medicines were made available. In the realm of education, merit was replaced with money power and meritorious students were denied of education because of their inability to pay the exorbitant fee and Kerala had even to witness the suicides of students due to such denial. The credibility of the entrance examination and even the SSLC examination obliterated, thanks to the repeated leakage of the question papers.  


During the tenure of the LDF government in 1996, several power projects were commissioned and therefore an additional 1086 MW of power was generated. As a result, load-shedding and power cut was completely withdrawn in the state. But the subsequent UDF government reinstated the load-shedding and power cut as it miserably failed to construct new power projects to meet the increasing demand for electricity. The impact of the neo-liberal policies on the state’s fiscal condition was so severe that it led to the closure of the government treasury time and again. In 2001, when the UDF assumed power, the total liability of the state was Rs 23,919 crore and after five years of its governance it had increased to Rs 50,000 crore!  The additional amount of liability during that period was more than the total liability incurred after the formation of the state itself!  


Albeit the fact that the UDF in its election manifesto promised to provide 15 lakh   jobs, their policies actually led to a drastic reduction in employment as a result of the ban imposed in all government recruitment and hence more than one lakh employees decreased in the government sector alone. The government was not hesitant to deny many existing benefits to its employees. The spirit of decentralisation and historic ‘peoples’ plan’ has been sabotaged and the powers conferred by the previous LDF government to the local bodies were often being taken away. All the social security welfare schemes were impaired. The government could not properly rehabilitate the tsunami victims and the tsunami funds were grossly misused and diverted. The Lok Ayukta had to intervene and had severely criticised the government for such misuse.  


The law and order situation had deteriorated greatly and never before such a worsened state of affairs was seen in the state. Numerous instances of lockup killings occurred and even Uruttu torture killing – using an iron rod – had taken place. The India Human Rights Report 2006 had reported the brutal killing that took place in the police lockup as bones of the victim were crushed with an iron rod. The police had even resorted to indiscriminate firing on adivasis at Muthanga killing one adivasi. During that period 22 sacred places of worships were damaged in confrontation. Sex rackets in the state flourished and many incidents of sex scandals and rapes were reported. Throwing away the past policies, the police was allowed to intervene in the labour disputes and many black laws were enacted. Police atrocities and lathicharges were very common and even the media reporters were repeatedly assaulted by the police. 




During 2001-06 the main feature of the UDF government in Kerala was nothing other than corruption and lack of governance. Kerala had witnessed massive upsurge against the then tainted UDF rule.The CPI(M) and the LDF led the movement against the neo-liberal agenda pursued by the UDF government in all realms of governance. The election manifesto of the LDF for the last election was an outcome of those movements and hence expounded the alternative policies,  including a comprehensive plan for the overall development and welfare of the state in its manifesto. Unlike the neo-liberal preaching, the LDF manifesto accentuated the perception to strengthen the public sector to intensify economic development. Simultaneously, so as to attract private and cooperative sector investments, it made certain concrete proposals. While striving for intensive economic development, great significance was given to protect sectors where people at large depended on, such as agriculture, cottage and small scale industries and fishing. The manifesto emphasised augmentation of production and productivity in cottage and small scale sectors and also the immense importance of ensuring people’s participation in the decentralised planning. It also highlighted the scope of enormous advance in areas like biotechnology, information technology, tourism etc to set up and for further expansion.  


The manifesto further underlined the need for a qualitative shift in the services being provided in education, health and other welfare schemes to meet the growing demands. It is inevitable in a modern society to ensure basic needs to all and hence special emphasis was given to ensure the welfare of the adivasis, dalits and fishing workers by enacting concrete schemes to accomplish the objectives.  


In the 2006 assembly election, people at large not only appreciated the uncompromising struggle that the Left had unleashed against the anti-people policies but also acknowledged the alternative plan of action offered by the LDF. The LDF in Kerala secured a historic victory with a thumping majority and secured 100 seats out of the 140 in the assembly.  Even in the strongholds of the UDF, many LDF candidates had won with a huge margin. New sections, especially the minorities, rallied in a big way behind the LDF throughout the state.   




The LDF government after assuming power immediately took steps to realise the promises made in the manifesto and thus the priority of development that the UDF made was completely reversed. The UDF government had imposed the financial burden of the neo-liberal policies on the common people. The LDF government at the same time decided to strengthen the State intervention to ensure welfare of the common people. The LDF government with such a perception had executed all the promises in all sectors during this period. It is unquestionable that every section of the society are benefited out of any of the welfare schemes that the government had implemented and no section is left out. The alternative policies, combating the menace of neo-liberalism and world economic crisis, have resulted in the overall development of the state and hence set a model for the rest of the country. The LDF government, confronting the contemporary challenges, accentuated further the globally acclaimed ‘Kerala Model’ and consequently set a new saga in the history of the development of the state. The Communist movement, which laid the foundation for the Kerala model of development in 1957, has again in these neo-liberal times, carved another chapter with its pro-people policies. It is significant to envisage how a state government, using the limited powers in the federal structure, strived to accomplish alternative policies at a time when the central government is fervently pursuing to implement the dictates of the Bretton Woods institutions.


      (To be continued)