November 23, 2014

Aggressively Furthering Neo-Liberal Reforms

BY now it is clear, despite all the high pitched rhetoric, that PM Modi is more aggressively pursuing the very same neo-liberal economic reform trajectory that this government has inherited from the earlier UPA government. This is happening like it did initially with Dr Manmohan Singh invoking illusions of an `era of prosperity’ which will convert India into a land of `milk and honey’. This is also happening, like in the past, particularly after UPA-1 jettisoned the outside support of the Left parties and went ahead with the Indo-US nuclear deal with the active moral and material support by India Inc. The crucial difference on this occasion under PM Modi is that the illusions being sold to the people are bigger with hyperactive backing of international finance capital (IFC). Consequently, India Inc. is proactively performing as the `cheer leaders’ of this Modi government. There was a time when Dr Manmohan Singh was hailed as leading India into its `adulthood’ as an `emerging economy’. He was hailed as breaking `India’s isolation’ following the Indo-US nuclear deal. His rubbing shoulders with world leaders at G-20 `high table’ and elsewhere were clothed as `national pride’. This was promptly ditched later when the UPA government began implementing, under the pressure of the Left parties, albeit half-heartedly some pro-people policies that were seen as retarding the pace of neo-liberal economic reforms (read, pace of creating greater opportunities for profit maximisation), falling behind the expectations and hopes of IFC and India Inc. Both, thus, actively promoted and echoed the Modi campaign of `paralysis’ under Dr Manmohan Singh. All through the election campaign, Mr Modi never failed to underline that the then Indian prime minister had turned into `Maunmohan Singh’ in India and spoke only on his foreign tours. This latter attribute is being implemented with greater vigour by PM Modi today. PM Modi’s speeches abroad, on his current ongoing foreign tour, are being telecast live 24/7 and grabbing print media headlines. PM Modi seems to have perfected the art of deflecting the agenda away from any other activities of some importance domestically. The observations of the 125th birth anniversary of Jawaharlal Nehru at New Delhi’s Vigyan Bhawan were completely overshadowed by the media coverage of PM Modi’s speech to NRIs in Sydney, Australia. Recollect that during seven phase general election campaign, Modi would hold public meetings in non-polling states grabbing media headlines, thus influencing voters, effectively subverting the `code of conduct’. Crowds of below 20,000, considered less than average in street corner meetings in India, are portrayed as massive on foreign tours, which they may indeed be in sparsely-populated countries (less than a tenth of India’s population). Hailing such crowds India Inc. and PM Modi’s drumbeaters – sections of the corporate media – have articulated their loyalty through their editorial comments. The Times of India says: “Enthusiastic responses to Prime Minister Narendra Modi’s diaspora address in Sydney matched those at New York’s Madison Square Garden, showcasing the reach of civilisational India that’s larger than India as nation state”. It, therefore, goes on to urge faster reforms saying “investment climate at home must improve, economic reforms which render domestic policy liberal and transparent have to be undertaken”. Likewise The Hindustan Times editorially says: “The G-20 Summit was another public diplomacy triumph for Mr. Modi, who is demonstrating great ease on the global stage”. And, “Perhaps mindful of the millions watching at home Mr. Modi reminded audiences about his ambitions, achievements and the values he hoped they would pursue”. Urging a faster pace of reforms, it concluded by saying: “PM declared that unlike other governments which liked to devise new pieces of legislation he relished demolishing laws that stifled citizens (Read: Demolish all restrictions on profit maximisation). Such a clear reiteration of his philosophy of government is welcome”. Some like The Indian Express hailed the G-20’s pledge to lift their combined GDP by an additional 2 percent by 2018 but cautioned that the commitment “to add $ 2 trillion to the global economy seem more like motherhood and apple pie”. It then goes on to speak of “improving the country’s investment climate” which “is something this government must independently do if it wants to bring back growth and job creation”. All these clearly show that a slogan given by Mr Modi during his election campaign – yeh dil maange more – was a reflection of this eagerness of India Inc. for more reforms at a faster pace which, in the first place, prompted them to express their loyalty through liberal material support for the campaign. This is the payback time. One of Mr Modi’s favourite `cheer leaders’, the Adani group, in whose private jet he crisscrossed the country on his hectic election campaign tour, will now be provided probably the largest credit facility by an Indian bank for an overseas project. The SBI will provide a loan of $ 1 billion (more than Rs 6,000 crores). This comes over and above the Adani group’s existing borrowings of close to Rs 65,000 crores. Such largesse comes despite serious questions regarding the project viability; environmental battles that Adani’s beleaguered coal venture in Australia is currently facing; problems of high debt and India’s projected coal self sufficiency. The union power minister has recently said that India would stop import of thermal coal in the next three years. Adani’s expect to export two-thirds of the coal output from the Australian mines at Carmichael to India. Adani mining, the Australian subsidiary of the Adani group, which is undertaking this project, has “$ 1 billion in debt, negative shareholder’s funds, zero revenue and high cash burn” noted the Sydney Morning Herald. Despite Australia’s Queensland state granting all environmental clearances, the company is still battling out with green campaigners in court, who claim that such mining poses threat to the Great Barrier Reef around the island continent. This will only add to the existing risks which already project that these coal mines will reach its full production only by 2022. If full production is not reached by 2017, the Adani’s risk losing $1 billion annually. Finally, the current slump in coal prices to a five year low of $ 70 a ton will push the cost of production higher than the global price in the foreseeable future. Despite all these known constraints, this huge loan has been sanctioned to Adani’s biggest thermal coal project in Australian history. What else does it mean? Payback time, of course. With such reforms favouring IFC and India Inc. and reforms of another nature imposing further burdens on the Indian people – slashing the MGNREGA allocations, hiking taxes on petroleum products, hiking railway fares, privatising public sector etc etc – is Mr Modi’s economic recipe. In order to divert the natural growing popular discontent away from targeting his government, the RSS/BJP sharpen communal polarisation. They seek to further advance their objective of undermining the secular democratic character of the Indian Republic to facilitate the creation of the RSS version of a rabidly intolerant fascistic `Hindu Rashtra’. For the sake of India, i.e., Bharat, this diabolic strategy must be exposed and defeated by powerful popular mass mobilisations. November 19, 2014