March 16, 2014

Growth For All Our People Needed

SECTIONS of the India Inc, the self-appointed drumbeaters of the RSS/BJP’s prime ministerial aspirant, are scaling new heights in the euphoric support. We had the occasion in these columns in the past to note that such euphoria was a chillingly reminiscent of how sections of global capitalists openly assisted the rise of Hitler and fascism in Germany in the 1930s. Fascism was, in fact, welcomed by many a beleaguered global capitalist who saw in Hitler, likewise in Mussolini (who famously spoke of the unity of the state with capitalists), a way out to continue their profit maximisation in a world shattered by the 1939 Great Depression. The building up of the German war-machine, the consequent requirement of a modern infrastructure for the movement of the army, the military-industrial complex and the subsequent World War-II provided a bonanza for the global capitalists, notwithstanding the havoc it wreaked consuming unprecedented millions of human life and destruction of material wealth. Additionally, the fascist state unleashed horrendous repression, most of which is painfully recorded in history. Such repression included the complete abrogation of democratic rights and civil liberties, particularly the rights of the organised trade unions and working class. This later aspect directly meant that the share of profits rose to unprecedented heights, with no resistance against inhuman exploitation being allowed to be exercised by the working people. Major capitalist countries like USA, France and Germany joined the anti-fascist alliance more to prevent a fascist Germany’s global domination (which would adversely affect their own domestic capitalist class interests) and particularly when, after heroically braving the fascist war onslaught single handedly, the Soviet Red Army scored the first decisive victory at Stalingrad. Leaving aside this glorious chapter in world’s history where the Soviet Union played the decisive role in the defeat of fascism, the point to note here is that in the current situation of a continued crisis of global capitalism, continuing since the 2008 global financial meltdown, corporate India sees in India’s communal fascistic machine the best opportunity to maximise profits notwithstanding the horrendous consequences that it may have for India’s unity and integrity particularly its social harmony. Thus, its cries for a ‘strong leader’ and so on. The latest instance for such euphoric celebration is the upward movement of India’s stock markets, in an otherwise gloomy world. The Sensex is scaling new heights breaching ‘barrier 22k.’ The Nifty has also created a new record. India Inc, through the spokesman of a leading finance company, promptly responded saying, “The possibility of a Narendra Modi led NDA government coming to power after Lok Sabha elections is fuelling the rally” (Hindustan Times, March 8, 2014). In its quest for unbridled profit maximisation, India Inc perennially looks for a ‘quick fix’ solution to explain stock market fluctuations. This has often happened in the past. The Sensex tumble in 1998 was attributed to the delay in Ms Jayalalithaa sending her letter of AIADMK’s support to a waiting Vajpayee to be sworn in as the PM. This was the time when the East Asian economies collapsed. The consequent international financial turmoil that followed was best described as a situation where ‘scavengers were mopping up the bones of what were once considered Asian tigers.’ Again, international financial turbulence was ignored when the Sensex tumbled in 2004. The Left parties’ outside support to the UPA-1 without which a government could not have been formed was blamed using the pretext of some statements by Left leaders seen as “market unfriendly.” Some corporates also attributed this to the fact that the Left parties prevented their then favourite BJP’s A B Vajpayee to return to power with his NDA. Likewise, today, ignored is the fact that international markets are in a state of great flux. The Wall Street reached record levels following a strong US payrolls record. A number of jobs were added during the last two months notwithstanding a growing unemployment rate. The consequent market buoyancy in USA released funds for investment elsewhere globally. This resulted in larger FII flows into India. However, this euphoria is not lasting as negative news pours in from the European and the Asian markets over the Ukraine crisis and the relatively discouraging domestic economic data from China. Its impact is already being felt globally and will soon influence the Indian markets. Further, the stock markets also respond to domestic economic fundamentals. According to the finance minister, these are showing a relative turnaround after 18 months with the rupee strengthening against dollar and the current account deficit (the gap between India’s export and import earnings) situation improving. This is thanks to the much delayed luxury import curbs which the Left has been suggesting for long time now. Stock market fluctuations, though too marginal to impact on the livelihood conditions of the vast majority of our people, are, however, important as levels of market capitalisation determine the corporates’ capacities to access the financial markets. On an average, a corporate invests a nominal 20 percent of its own resources borrowing the rest from the financial markets. Thus, crucial to the India Inc’s profit maximisation drive is to continue to keep high such contrived market buoyancy. This, in turn, is determined by their capacity to manipulate the state by exponentially raising the levels of ‘crony capitalism.’ This column had occasions to discuss this scourge earlier and note that the PM also had to once concede in the parliament that “India can ill afford crony capitalism.” Yet, the UPA-2 all along promoted it. This is corroborated by the MD of a leading investment bank, who said, “Throughout the recent slowdown, there has not been a single year of decline in overall (corporate) earnings.” India’s largest private sector company, Reliance Industries, zoomed 5.72 percent, while the largest Telco, Bharati Airtel, soared 5.5 percent and the largest private bank, ICICI, gained six percent. All this would not have been possible but for the massive concessions that the government provides to the India Inc. As noted in these columns earlier, India Inc is desperately looking for a ‘messiah’ who can deliver such concessions and ‘sweet heart’ deals on a larger scale. Thus, sections of them self-appoint themselves as the ‘cheerleaders’ of the BJP PM aspirant. Gujarat has an unprecedented record of concessions given to corporates. Reports based on RTI inquiries reveal a string of such concessions (Hardnews, July 2012). L&T was allegedly allotted eight lakh sq m of prime land in the industrial zone of Hazira, Surat, without auction, at the rate of one rupee per sq m, while the price fixed by the land committee was Rs 950 per sq m. Land for the Tatas’ Nano car project, 1,100 acre, was allegedly sold at Rs 900 per sq m while it’s market rate was around Rs 10,000 per sq m. They got bank loans of Rs 9,570 crore at 0.10 percent interest with a moratorium of 20 years. No financial institution would grant more than 100 per cent of the total project cost. The total project cost is estimated at Rs 2,200 crore. Additionally, subsidised electricity and water were provided as well as facilities for disposal of hazardous waste. The Gujarat government reportedly suffered a loss of Rs 33,000 crore. Thus, the total amount of concessions given to the Tatas has been estimated to cost the state government exchequer more than Rs 60,000 for every Nano car produced! Likewise are the details alleged regarding the Essar and Adani corporate groups. This is the so-called ‘vibrant Gujarat’ which has the highest poverty rate in the country, according to the Planning Commission’s Tendulkar committee. Close to four lakh farmers do not have electricity connections. Reportedly, 9,829 workers, 5,447 farmers and 919 labourers have committed suicide under the current chief minister. The state debt has steadily increased every financial year --- from Rs 87,010 crore in 2008-09 to Rs 98,528 crore in 2009-10 and Rs 1,12,462 crores in 2010-11. Therefore, are corporate India’s expectations for more ‘sweet heart’ deals not justified? Of course, particularly when they come at the expense of compounding misery on the working people as evidenced by the state’s low and further declining human development indices. The success of India Inc’s euphoria, if it happens at all, comes with a venal cocktail of communal mayhem and mega corruption promoted by crony capitalism. The frightening consequences of the curtailment of human rights, civil liberties and social harmony will be disastrous for the rich mosaic of diversity that constitutes our India. Worse, this will be accompanied by a further damning decline in the quality of life of the vast majority of our people. What India needs is an alternative policy trajectory, alternative from the policy direction followed by both the Congress and the BJP, where economic growth will take place accompanied by the growing economic prosperity of all our people and not merely for the miniscule ‘Shining’ India. Such an alternative is not merely possible but is also eminently feasible as argued in these columns in the past. This is the task at hand in the forthcoming 2014 general elections.