India with second largest population in the world is far away from China in the different aspects which are considered in the formation of ‘human development index’. In 2014 out of 188 countries India ranked 130 and China was positioned at 90. The Chinese are now allowed by their government to have more than one child. With additional human numbers, China may get a demand push from the internal market as demand from markets outside has started declining. Are we heading towards a repeat performance of the 2008 slowdown from 2016 onward which originally ignited in USA?
India in 2016 is still an agricultural country as the largest number of its people, around 69 percent, live in rural areas and here non-agricultural activities are virtually non-existent. However, agriculture accounted for only 13.7 percent of the GDP in 2012-13. In one of the so-called economically rich states in India viz. Maharashtra every year a large number of agriculturalists are forced to commit suicide mainly due to humiliation suffered for the non-payment of micro loans advanced by unrecognized moneylenders. Since 2006 such incidents are in public debate throughout the country. Previously, the incidence of farmers’ suicide in Vidarbha district was discussed in the country in detail. Last year another district in Maharashtra, Marathawada is in discussion as a large number of farmers committed suicide.
Another rich state in India, Punjab is well known for starting the ‘green revolution’ in the late sixties and making the state prosperous after partition. Recently farmers of Punjab have started committing suicide for their failure to repay debts committed for agricultural activities. The worst aspect of Punjab’s agricultural dynamics is the ‘dreaded’ disease of ‘cancer’. Punjab’s Malwa region is treated as the cancer capital of India— one cancer- express train leaves Bhatinda with large number of cancer patients every day for Rajasthan. These unfortunate farmers are compelled to drink ‘water’, which is simple ‘poison’; everyone knows it, but remedial measures are no one’s headache in the country! In a democratic country how long people in rural areas will be compelled to live and die as second grade citizens. Around 70 percent of India’s population still live in rural areas and farming is still the major livelihood of these people. Unfortunately, in the absence of concrete action from governments both at the centre and the states, the people of the country must take it as a priority task to save our millions of farmers!
It is well known to even a schoolchild in India that some big industrialists and rich businessmen as a matter of habit refuse to repay their loans to banks and that the securities they provide against loan in most cases are not realizable. Many of these willful defaulters are not only well known people of this country, some of them are even lawmakers or friends of our political bosses! The Governor of the Reserve Bank of India (RBI) cautioned his staff in a recent meeting that in many cases such high profile defaulters are not punished but for common people punishment is a must. ‘The culture of impunity should stop’ said RBI Governor (Indian Express dated 16.01.2016). Why loans unpaid by poor farmers, for no fault on their part should be an issue so that they are compelled to end their life? Why is legal action not taken against lenders who refuse to follow legal means to collect their debt from distressed farmers?
Since independence governments have failed miserably to provide assured irrigation water supply throughout the country to our farmers. Every time the monsoon fails, the poor farmers suffer and the government agencies look the other way. Irrigation infrastructure even after seven decades of independence, is either non-existent or non-functional when the monsoon fails. It is in the national interest that the supply of irrigation water should be fully insured and that no farmer should suffer for lack of water. Their counterparts in the corporate sector are fully protected by ‘insurance of A to Z sectors of their business activities’. Regarding the supply of bad quality inputs and artificially raised prices, local level officers should be made accountable, individual farmers must get legal aid to approach the courts for compensation. There are so many Chambers of Commerce, so many live TV shows delivering awards to businessmen and women, but in India ‘farmers are ignored, neglected and humiliated’ as they remain in the fields far away from the capital cities of India. How long will we continue to pamper only the secondary and tertiary sectors and treat step-motherly the livelihood of millions of farmers? The people responsible for farmers’ suicides cannot avoid accountability to society! Actions must start now!
In 1991 the World Bank introduced in India ‘LPG’ or ‘liberalisation, privatization and globalisation’ policies but ‘quick profit’ and ‘cartelization’ by the MNCs virtually destroyed our unorganized agricultural sector. GM seeds introduced by foreign companies in India are yet to be proved as safe for living beings, both human and animal after two and half decades! These companies have no social responsibility. The growth rate of agriculture in 2012-13 at 1.2%, in 2013-14 at 3.7% and in 2014-15 at 0.2% clearly show that Indian agriculture is not a priority issue for our policy makers. (TOI dated 11.01.16). If 70% of our population have to live in rural India and this is the state of affairs there, the centre cannot avoid its constitutional responsibility by blaming the states only because agriculture is a state subject and rich states like Maharashtra, Punjab etc. have maintained wilful silence. While the executive fails farmers continue to commit suicide upon crop failure, and society is just an onlooker. Will it be a big expectation that the judiciary may intervene to stop this manmade devastation which is continuing for so many decades.
A recent survey- SECC Report of Goverment. of India (Socio Economic and Caste Census - between 2011 to 2013) shows that 56 % of rural households don’t own any land and occupation in rural India is mainly in the unorganized sector. The Report also mentions that 74.5 percent of Rural Households earn less than Rs 5000 per month. The recent announcement of the 7th pay revision committee’s report of the Central Government employees clearly fixes minimum and maximum salary at Rs 18000 and Rs 2,70,000 per month respectively and some of these employees will draw this enhanced salary every month while working in the rural areas. Workers working in the private sector and working in rural India get respectable remuneration as compared to their counterparts in unorganized sector. However, workers in rural India are mainly unorganized and they are virtually treated as slave labour though their total number runs into millions.
Any discussion on the changing dynamics of Indian economy remains incomplete without a discussion of the frequent press reports of millionaires and billionaires in India. Earnings of well known crorepatis of this country engaged in corporate sector is very ‘unreasonably high’ as compared to their counterparts (!) in the unorganized sector. Business leaders in India are simply exploiting their fellow workers in the unorganised sector in the 21st century. Look at the compensation package of some promoters and professionals of the corporate sector in India in 2015.
|2 Kavery Maran||59.9|
|3 Pawan Munjal||37.9|
|4 B.L. Munjal||37.0|
|5 S.K. Munjal||36.0|
|6. A.M. Naik||28.4|
|7. D. Bhattacharya||21.1|
|9. Dinanath Dubhasi||14.8|
|10. Rahul Khosla||08.5|
Is it not beautiful that the Government of India’s Report claims that an unorganized worker may receive Rs 5000 or less per month in rural area, the highest paid bureaucrats of Government of India may get in future after pay revision Rs 2,70,000 per month and the highest paid professional in the corporate sector receives in India around 50 percent of the remuneration that of Indian Promoters ( Rs 5.1 crores per month).
1.2 billion people in India are ruled according to provisions of one single Constitution and there is only one Supreme Court in the country to implement the provisions of this Constitution. In real life these rules are implemented quite differently for different sections of people according to their social status and bargaining power! Our politicians allure people to dream of starting ‘Ram Rajya’ and criticize day and night ‘Jungle Raj’, ‘indiscipline’ and ‘anarchy’ but in practice no mainstream political party believes in basic principles of Indian Constitution. Indian Constitution in its Preamble states: India is a Sovereign Socialist Democratic Republic, but still after 66 years’ of independence we don’t know where we shall land!
If 54% of our population is included as working population, there is no clear statistics how many of us are working in the unorganized sector. We don’t have any record of child labour! Millions of our women population are busy in household work only from early morning till late night and they are willingly kept outside the ‘working population’ definition!
During the last 7 decades both in Centre and in the states there are so many laws in the statute books to protect the interest of workers both in the organized and unorganized sectors, but in practice Indian labour is still to-day at the mercy of ‘money power’. Recently, Indian Railway went to occupy its own land in an area in Delhi (Shakurbasti) and started demolishing the huts of poor workers in the chilly December night of Delhi and during that process a child died. No law punished anyone, however, afraid of public criticism the Centre decided to lie low for the time being. This is ‘Ram Rajya’ of Government of India. ‘Contract labour’ is the rule in organized trade and industry, knowing fully well that this system is another method of naked exploitation of Indian labour in the 21st century! What happened to the Maruti workers in Gurgaon is still vivid in the public memory. Maruti in future may shift to Gujarat because any democratic protest there is simply stamped as an act of ‘sedition’ and ‘anti national’ and handled with an iron rod—the 2002 massacre is still alive in public memory!
In the same manner various instruments of capitalist exploitation of the natural resources of underdeveloped economies are still nakedly implemented on Indian soil to destroy millions of poor people including tribals. The Indian dense tropical and sub-tropical forest of the Himalayas, Odissa, Madhya Pradesh, Chhattisgarh and Western Ghats are being totally destroyed and some millions of inhabitants of these jungle are homeless and destitute. Indian rivers are converted into sewage channels and Indians are forced to use their unhygienic water. Our rich and scarce mineral resources were exploited by both public and private mineral exploring companies and they are exported at a nominal price to benefit rich industrialized countries like Japan, China, South Korea and other countries. Both the Indian Corporates and MNCs are not only destroying our natural resources, but millions were made homeless and simple beggars. In the 21st. century such ‘destructive decisions’ are against the interest of the people of the country. The Forest Rights Act, various environment protection laws and so on are used by people’s organizations to stop ‘foreign capital’ playing with the life, livelihood, property and liberty of our people. The Supreme Court forced Vedanta, a MNC to give up their bauxite project in the hills of Nyamgiri in Orissa. Tribals of India had to campaign outside India. POSCO of South Korea failed to locate their steel plant at Jagatsinghpur in Orissa simply because local tribals refused to vacate their fertile agricultural land and people of India were united to fight for their fundamental right to livelihood. In the same logic the present Central
Government failed to amend the Land Acquisition Law despite publishing so many times the same ordinances repeatedly in this regard.
During the independence movement the political parties assured farmers of India that in independent India land should go to the ‘tillers of soil’, what has happened after around 7 decades of independence? 56 percent of rural households don’t have any land. Those rural households who own land their largest number is either marginal or a small land owning class. It means a large majority of our rural households are either sharecroppers and landless agricultural workers. This is the real picture of the ‘development’ of the rural economy over so many decades.
Mr. Modi expressed sharp scepticism about MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) and its approach. In fact Mr Modi had mocked the Congress, stating on the floor of Lok Sabha that he would keep this rural employment scheme alive as a monument to Congress’s economic policy failure in the past.
“From 73.42 crores person days in April-June quarter of 2014, wherein UPA ruled until May end , employment fell to just 22.2 crore persons days in September quarter and further to 23.67 crore persons days in December quarter before marginally improving to 36 crore persons days in March 2015 quarter. The data for the current financial year shows that the employment generated is substantially higher than last financial.’ (Indian Express Editorial 7.01.2016) Thus some patchwork to exhibit ‘people friendliness’ was necessary when villages in India were burning from ‘unemployment and disaster due to the successive drought in Indian economy’.
The UPA Government was forced to guarantee food security to 80 percent of population under the National Food Security Act 2013. The World Trade Organisation (WTO) opposed this law but was forced to accept it. Though the distribution process is very defective and the quality of food grains is much below normal quality even then hungry people have no choice. Till today huge food grains are wasted due to defective storage practices, we forget that malnutrition is still a major issue in the country. Recent meeting of World Trade Organisation (WTO) at Nairobi refused to put any restrictions on subsidy given to agriculture in the developed countries. But rich countries are adamant that in poor countries where people are still living in rural areas, Governments should not extend any helping hand to the cultivators so that they get an opportunity to survive. That is why these instruments of World Bank, IMF and WTO are totally anti poor and destructive for the underdeveloped countries. This is evident from the following Table II.
Total support estimate for agriculture in $ Billions
Source: (OECD Data Base)
India, the second largest populated country is denied to extend agricultural subsidy even of only $ 51 Billion for 1.2 billion population, much less than that of USA ($ 96 Billion) and China ($327 Billion). In the present international perspective India has to ignore the dictates of these organizations and implement its policies as the democratic institutions of the country want. The suffering of the citizens in rural India has reached the limit.
After the 2008 depression the USA is gradually coming back on rail. However, Chinese figures show a gradual declining trend, a lot of questions are debated in public. However, the Government of India is optimistic about India’s growth prospect though the Indian financial market looks quite shaky!
The Chinese external debt was $28 trillion by mid 2014 against $7 trillion in 2007. Debt/GDP ratio in China has reached 282 percent, larger than USA and Germany (McKenzey Global Institute Report). This has created a new dimension in problems around the Chinese economy. Exports are declining but China has a huge foreign exchange reserve. The Foreign
Exchange Reserve of China was around US $3.3 trillion in 2012 and this increased to US $3.65 trillion on July 2015. China also manages US $200 billion to US $400 billion foreign exchange that are not included in the above calculation. The world economy may be thrown into another recession due to the turmoil in China. Already Russia and Brazil are in recession!
India’s external debt in 2013 was US $409.4 billion and it increased to US $440.6 billion in 2014. Debt/ GDP ratio increased from 22% to 23.3%. India’s Foreign Exchange Reserve to total debt went down from 71.3% in 2012-13 to 69% in 2013-14 (GOI Budget papers). It is foolish to imagine that India may fill the vacuum created by China by increasing production and attracting foreign investment. If the US increases the interest rate, foreign investors may avoid Indian soil.
Another school of economists suggests that the Chinese economic policy is in the process of correction to reduce dependence on the external market, rather it will be directed to the internal market, which may grow in future. China and USA have to compete to establish their hold on world economy!
India must learn from the Chinese experience and give up its old and defective policy of ‘export led growth.’ India itself is a huge market.
Click here to return to the April 2016 index.