People's Democracy

EDITORIAL

Three Years of UPA-2:

Do People Have Much to Celebrate?

NOTWITHSTANDING the pomp and show of the official celebrations on the third anniversary of the UPA-2 government, there is very little for the vast majority of Indian people to celebrate.  

One indication of this is the cruel coincidence that every anniversary of the UPA-2 government has come with a human tragedy.  The first anniversary in 2010 came with the Mangalore air crash. The second came with a railway accident in Bihar. This year the third anniversary was accompanied by a tragic rail accident involving the Hampi Express in Andhra Pradesh, killing instantly at least 25 people. Over these years, there were 36 rail accidents in 36 months that have ‘officially’ led to the death of nearly 500 people and left nearly 1200 injured. 

The third anniversary celebrations and the bombastic claims made by the government remind us of a story connected with the life of the famous English playwright and satirist Oscar Wilde. While he was an employee, his boss one day charged him with coming late for work everyday. Mr Wilde retorted by saying that he was making up for this lapse by leaving early everyday! During these three years, the standards of livelihood for the vast majority of our people are being eroded literally from both ends. 

Before we come to the growing burdens and woes of the people, recollect that major promises made when this government assumed office remain unfulfilled. The president of India had assured that this government would pass the women’s reservation bill providing for one-third reservation to women in the state legislatures and the parliament within the first 100 days. This has not seen the light of the day. Similarly, important legislations like the Food Security Bill, the Land Acquisition Bill, the Communal Violence Bill, the Lokpal Bill etc remain unimplemented. So much for the celebrations. 

Likewise, many of this government’s claims regarding the economy remain far away from the declared target. The government started this year by claiming that our economy would register a GDP growth rate of 9 per cent. We ended with a growth rate of 6.9 per cent. The industrial growth rate this year ended at a meagre 2.8 per cent as compared to 8.2 per cent last year. In the ‘report card’ issued at this third anniversary celebrations, it is claimed that there is a record coal production. What is not said is that the gap between the demand and supply of coal widened to a record level as well; that too despite our immense coal reserves.  Likewise, the claims of the highest capacity addition in the power sector must be seen against the fact that over 60 per cent of this capacity is unable to maintain normal operations due to severe fuel crunch. The report says that 559 projects under the Jawaharlal Nehru National Urban Renewal Mission have been approved so far. It, however, does not say that only 128 of these have been completed so far. This list of such mismatches goes on. 

The most criminal aspect has been that despite a record foodgrain production of 250 million tonnes, people continue to go hungry.  These columns had noted, in the past, that the stock of foodgrains currently in the central government’s godowns is far above the required buffer norm. The country has been told that there is no more storage capacity and, in fact, huge quantities of foodgrain are rotting in the open. The finance minister informed the parliament that if procurement of foodgrain proceeds normally this year, the government would have to spend an extra Rs 20,000 crore for storing this grain. Given the continuing spate of distress suicides by our farmers, however, the country cannot afford not to procure at the minimum support prices. Yet, instead of distributing this excess stock of foodgrains to states at the BPL prices which can be distributed through the PDS network so as to reach the hungry, the government chooses to allow this stock to rot in the godowns.   Soon they will start exporting the same, thus earning revenue by keeping our own people hungry.

The cruelty of all this must be seen in the background of the latest data of the National Sample Survey in its report on “Key indicators of household expenditure in India,” A study done with these data shows that even by the abysmally low definition of poverty by the Planning Commission, over 60 per cent of our population in all states of the country fall below the poverty line (The Times of India, April 29, 2012). This, in fact, confirms the findings of the late Arjun Sengupta committee report which estimated that over 80 crores of our people are somehow managing to survive on less than Rs 20 a day. 

On top of this comes the relentless rise in the prices of all essential commodities. The overall inflation accelerated in April 2012 once again, confirming the trend of a double-digit inflation rate.  Notwithstanding all the so-called flagship programmes for the aam admi that the UPA-2 government tomtoms about, all its talk of “inclusive growth” remains a sham. 

Worse still is the fact that the future has greater burdens for the people in store. The UPA-2 continues with its faulty diagnosis of our economic downturn. It continues to adhere to the neo-liberal understanding that the growth rate can be boosted by attracting higher levels of investments. As a result, it continues to increase the number of ‘incentives’ (read: subsidies) to foreign and domestic capital. The finance minister has reversed or diluted all the major tax proposals that he had made while presenting the budget. The government hopes that this will reverse the trend of foreign institutional investments leaving the country which has resulted, amongst others, in the sharp decline of the value of the rupee. 

The major flaw in this line of reasoning is that even if investments increase, economic growth cannot improve unless what is produced by such investments is sold in the market. (Of course, speculative investments can increase and can artificially inflate the growth statistics.) This, in turn, requires that people have adequate purchasing power in their hands. It is precisely this that is sharply declining due to the growing levels of poverty and the relentless price rise. With the prices of all essential commodities rising, people are left with little or no resources to purchase other commodities. This, in the main, explains the sharp decline of the growth rate in the manufacturing sector. What is required is to reverse this neo-liberal trajectory itself.

Higher levels of public investments will generate employment, on the one hand, and build our much needed infrastructure, on the other. In the past, this column has shown that there is no dearth of resources for this, if the huge tax concessions for the rich are given up. This, in turn, would increase the purchasing power of the people, enhancing the levels of domestic demand. This would give the required impetus to the manufacturing sector and consequently to the levels of industrial production to grow. Such a trajectory would set in motion a sustainable cycle of economic growth. 

During the remaining two years of this UPA-2 government, public pressure through powerful popular mobilisations should be mounted to force the reversal of the current trajectory of economic reforms and, in its place, to follow the course suggested above. 

However, committed to the international finance capital led neo-liberal trajectory of economic reforms, this UPA-2 government will not reverse its policy trajectory unless compelled to do so by powerful struggles of the people. 

Before this issue People’s Democracy went to press, the UPA-2 government has sharply increased the price of petrol by an unprecedented 7.54 rupees per litre in Delhi, while the looming threat of hike in diesel and LPG prices appears still closer. Powerful protests must be mounted by the people against such criminal burdens on the people. 

May 23, 2012