The Economic Depression and India

Dr. N.K. Bhattacharyya

The people of Iran and North Korea never expected such a massive defeat of the oppressive Republican regime in USA. After 80 years (1929-30 to 2008) capitalism (international finance capital) is seen once again rubbing its dirty nose on the public streets of the mega cities of the world. It is facing the worst possible challenges before it is finally replaced by a transparent system accountable for all its decisions to the poorest of the poor of this planet. The people of Cuba, Bolivia, Venezuela and many other countries in Asia, Africa and Latin America went to sleep peacefully on 4.11.08 after the onset of the economic depression around the developed world and the election of an African American for the first time as the new President of the USA. The poorest of poor around the globe whom our communists till address as ‘sarvaharas’ (destitute) have nothing to lose in any depression rather they are happy that the billionaires are begging from their government rescue packages in not millions or billions of US dollars but in trillions when as a matter of policy they refused to give despite hundreds of resolutions in the UN any tangible help to the poorest of the poor around the world for their basic needs to survive as human beings. They proudly proclaim that ‘in a market economy there is no free lunch’, charity is a bad word. Why are the governments both in developed and in underdeveloped countries around the world worried to save only these richest 10 percent of the world’s population, who are the architect of the present dark nights? What are wrong if these highly trained speculators become penniless and were given the opportunity of sharing beds in cold Delhi winter nights on the footpaths of Delhi near the Jama Masjid along with beggars, rickshaw-pullers and other poor people of that area!

It is an extraordinary event that USA’s concerned citizens has elected one of their senators as ‘President’ who promised to improve the living conditions of the neglected masses of that country. The outgoing President will be remembered in world’s history as a ‘war criminal’ who during his eight years’ of misrule not only made USA a bankrupt country, but destroyed completely the life and culture of the people of Iraq and Afghanistan and threatened to destroy that of both Iran and North Korea. Such a person should be tried in public for war crimes and barbaric activities against humanity. He is primarily responsible for the miseries of the people of Palestine. People around the world are waiting anxiously when USA decides to withdraw completely its military occupation from Iraq and Afghanistan. They have no locus standii outside the borders of USA. The imperialists also should call back its forces and military installations from the rest of the world, let each individual country decide how to protect itself, and USA’s fascist behaviour has to stop permanently at an early date. History will not forgive the Governments of the USA for such ‘fascist’ and ‘Hitleristic’ designs!

The hapless people of the globe who may account for 80 percent of the world population, express their full sympathies with those not so rich people who have lost every thing including jobs during the last 18 months since the sub-prime lending crisis in the USA came overboard in July- August 2007—their homes, their bank balances, insurance coverages, billions of US dollar investments in shares and bonds. Many of them have already committed suicide. The actors of this tragic drama were enjoying artificial comforts and enjoyments while millions of their countrymen were compelled to live in inhuman conditions. However, the poor people of Asia, Africa and Latin America know very well how to survive without safe drinking water, without 2000 calories per head per day, without the minimum educational and medical facilities. There is no job security for these people. The ‘artificial’ capitalist balloon has ultimately burst with a bang after 80 years (1929-30 to 2008) and the world leaders who can see beyond their nose should use this opportunity in building a new world order based on the age old concept of ‘Equality, Fraternity and Liberty’. The age old concept of capital based economic activity has lost its significance long back, so ‘capitalism’ is dead and it should be buried permanently in the grave built up for imperialism. Now it is the age of science and technology. The USA Dollar and gold etc. etc. have lost their universal acceptability and this is the opportunity to give all support to develop the ‘scientific temper’ (Nehru of India). Any attempt to revive exploitative ‘capitalism’ through ‘Keynesian monetary policies’ or any other mode should find its proper place – the gutter of human history.

The three organisations that the imperialists built after the Second World War to suck the blood of the poor of the world to enrich themselves — the World Bank, International Monetary Fund and the World Trade Organisations—have failed miserably to serve their master (USA) in avoiding the current crisis and save it from humiliation and destruction of the capitalist system. The US dollar has to be replaced by an acceptable basket of currencies of the world market. Why Saddam Hussein was taught a lesson when he rightly wanted to accept the Euro and not the US Dollar for the sale of oil? Has the developed world forgotten 9/11, then why every one is running to the oil exporting Middle East countries begging them to give advances and /or invest in their countries? All of a sudden Islamic Finance Corporations have become the favourite investment bankers to the west though it is China who gave the maximum incentives to these institutions for the last so many years. Not a single Islamic bank is in crisis as compared to so many triple AAA rated western and eastern banks. Will the rating agencies voluntarily wind up and go? The western investment banking institutions in the private sector around the globe were simply ‘casinos’ said the Prime Minister of India. The stock, derivative markets and hedge funds of the world are bleeding profusely and Russia closed them all. During the last 3 months the USA alone has seen a job loss of 6 million people, and this is spreading like wild fire throughout the globe. The king is naked. He has lost his royal robe.

What the People of India Demand

India’s socialistic pattern of society was meant to develop basic and heavy industry in the public sector. It gradually helped both Indian and foreign private sectors to take over the changing (not development) process in the secondary and tertiary sectors. Banks and insurance companies in the public sector helped the growth of Indian and foreign corporate sector. The greedy corporate sector thinks that the elected governments of this country should serve their interests only and nothing else. The non performing assets of our banking industry are in lakhs of crores but the Banks refuse to divulge the name of the celebrities of the corporate sector who defrauded these banks and looted money of ordinary citizens. There is no transparency in our banking industry; everything is done in utter secrecy. The British Raj framed rules which are still followed in our banking industry. The regulators of banks, insurance and share and bond markets are not only inefficient, they are afraid to do their job fearlessly. The interests of the nation and constitutional obligations are never followed by these institutions; they work as sub-offices of the Government Departments.

It is well known that the corporate sector habitually manipulates its accounts and refuse to pay the taxes due from them. Tax consultants are paid to advise how to evade or at least to reduce taxes. Black money accumulation is common in industry and trade and this is well known to tax collecting officials. CEOs, Directors and Chairmen of Companies are looting their companies and there is no ceiling on their perks, salaries, bonuses, and retirement benefits etc. Let our journalists publish the net income of this category of people in the big corporate sector during the last 5 years. The decision makers of companies should be stopped from looting their managed companies. Foreign Institutional Investments (FII) channeled via Mauritius and some other countries are exempted from paying corporate tax. They run away with huge untaxed capital profit from this country. Why should the country sacrifice revenue for so long a period? All the mainstream political parties passed a law on Special Economic Zones (SEZ) virtually without debate and corporate sector was exempted from paying any tax and it was also agreed that no law of the land will be applicable to the units located there. It means SEZs are sovereign countries within India! How then our exports are declining and the adverse balance of payments is increasing every day. Will Manmohan Singh explain this? Why not amend the SEZ Act and delete the exemptions given to the units in SEZ. The country’s tax revenue has to go up in this period of depression and all the loopholes to be plugged. Great Tata Sons once again in news! It wanted to fabricate a car in W. Bengal but refused to divulge the agreement on ‘concessions’ to be received from that state. Now it is claimed that Government of Gujarat has agreed to dole out around Rs 30000 crores to Tata Motors as an incentive to relocate their plant in that state! (News reports dated 12.11.08) Thanks to the (fake) doctrine of competition and market economy! Tax payers’ money is doled out to the corporate sector in whose interest? As soon as this ‘imported man made financial’ crisis reached Indian shores, our Governments were worried how to help the rich and almighty chieftains of the private corporate sector. The entire government machinery went into business to ‘monitor’ and to take ‘necessary’ actions so that Indian corporate sector should get all help to face problems created by them and their friends elsewhere. If our private banks lend in risky international ventures to fulfil their greed, why Indian people should be asked to pay. Lot of corporate houses have made acquisitions and mergers in the west in lure of profit, now in this depression they are all in red, who will bear the loss — Indian tax payers or the owners of majority shareholders? These issues should be debated in public and the Government should be banned from unilateral action without debate and discussion in Parliament. Our democratically elected Governments never bothered during the last 60 years to talk to those groups and unorganised sections who were demanding their ‘right to life and livelihood’. Indian police, paramilitary and even military were used and are still being used to suppress their expressions of genuine demands to live a life of dignity and grace, as promised in the Constitution of the country.

Rural India provides job opportunities to 70 percent of the people of this country but both long term and short term advances by banks never trickle down to agriculture, forestry, fishing and other primary sectors. Both the public sector and private sector banks refuse to give both long term and short term loan to small and marginal cultivators and share croppers and forced them to go village moneylenders. Due to the rising cost of cultivation, crop failure and the high interest rates of moneylenders those who failed to repay had no alternative than to commit suicide. Their number runs into thousands throughout the country and it is still going on. It looks ironical that as soon as rich industrialists and business community in India and abroad are facing some crisis created by their speculative system and casino culture, trillions of US dollars are doled out to the rich so that they should not suffer. The Government of India has provided more than Rs 2.8 lakh crores to help the corporate sector to overcome their temporary difficulties. Why not ask the Ministry of Agriculture and Rural Development to pump adequate funds in the rural sector so that persons living in the villages of India get assured jobs at the minimum wage rate for 365 days in a year instead of 100 days under NREGP. Purchasing power has to be injected into the rural economy of India and not in the hands of ballooners. Food security is a must for every Indian. World food production is sliding and India cannot afford any loss in food output. Per capita food output is going down and the poor without income have to go to bed regularly without food! And for that the entire infrastructure of the rural economy has to be reconstructed. Irrigation dams are old and silted. They cannot hold adequate water. Canals are silted. All irrigation infrastructures have to be repaired and desilted, investments have to make before the next monsoon. The recent devastation in Bihar and other states due to floods demand immediate attention. In the same manner those who are already displaced due to the wrong development policies of the governments have to be properly rehabilitated with land for cultivation. Landless people are waiting till today for a piece of land promised long before independence and it is time now to find land and distribute it to landless families for cultivation. Food security is the main issue in the 21st Century and it more important in India as till to-day two- thirds of our people still live in villages and depends on agricultural occupation. We have seen the horrible scenario in the western developed countries with the loss of jobs in manufacturing industries and in the service sector. Luckily our people are less dependent on such industries and their requirements are the bare necessities of a human being. This is the real face of Indian society, till Indians fail to solve this issue no development programme will have any real impact. Governments should stop hiding their heads in the sand; it should stand up and face this today. Only industry and trade failed to solve the problems of the west, our people still live in the villages and are totally dependent on the monsoon and agriculture. Indians have to bother for development of agriculture and allied activities and if we inject fund in the hands of millions of rural people, that will revive industries to meet the demand of the rural population. That was ignored in India in order to implement the policies of ‘Globalisation, Privatisation and Liberalisation’ as required by the west to safeguard their narrow selfish interest. Again talk has started through the G-20 meeting that goods and services of the rest of the world should enter India but Indian goods and services may not get the opportunity to go out! USA’s agriculture enjoying huge state subsidy should come to India and Indian farmers should make sacrifices for the survival of their richer brethren in the USA! India’s rural people must accept the challenge and tell the Government in clear terms not to do anything against the interest of the nation. MNCs engaged in agricultural business, should be under the constant scanner of the people.

An average Indian still does not have 2000 calories per day food. The real estate business never bothered to construct comfortable houses for the poor. Education and health care exist only in election manifestoes. In short, if the government has learnt anything from this inbuilt imperialist crisis, it should stop helping the developed countries by increasing our imports from them and reducing our exports. Already we have a huge adverse balance of payments. The import of oil should be properly regulated, it may reach Rs 1000 crores by the end of the year. It is sheer wastage to keep the rich happy by burning petrol in their individual cars and destroying the environment. Public transport capacity on rail and buses should be increased manifold and private cars using electricity should be encouraged. Petrol consumption by the private and government officials in their cars should be highly regulated because it is causing huge carbon emissions and wastage of foreign exchange for the greedy few. Private sector auto companies have already reduced production and increased retrenchments. Electricity driven autos should replace oil driven autos in a time bound manner and for that investments should be made here and now. Clean fuel policy is the need of hour. Second hand reactors from the west may wait; there is no hurry to bail out the western countries to sell reactors for civil nuclear power production. This is the opportune time to think and act for the benefit of 1 billion and odd people and not for the benefit of some thousands of self-centred industrialists, businessmen and high salaried middle class, to whom individual short term interest is more important than long term national interest. Those industries which are mismanaged should be asked to close down or taken over by the government depending on their viability. We should not nationalise all and sundry sick units because irresponsible trade unions may demand it for their selfish ends. Past history should be remembered. It will depend on the nature and importance of the industry to the nation. On the other hand once again State should come forward to invest in strategic and need based industries required by the country because the private sector may not get attracted due to adverse market sentiments. More investments by the state in proper areas should be made so that production should not suffer and supplies are ensured. Conventional theories of balancing the budget and artificial inflation created by the business should be tackled by creating enough public opinion and gaining their support.

Adequate unemployment insurance and health care facility should be ensured at an early date. There is no dearth of money. Progressive taxes should be collected from everyone who has to pay and every paisa of taxpayers’ money should be used for the benefit of the poor. We have increased the remuneration from the President to a class IV employee of the Government but they are not in the habit of delivering the goods. It is time that Indian policy makers both at the Centre and in the States should see the writing on the wall. Let us have a new blueprint to change the face of India instead of following the age old path dictated by the failed West! This is a unique opportunity to CHANGE but it should not be in any other pattern other than that of requirement of millions of Indians to live in the 21st Century.

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