GDP Growth and Deepening Inequality: A Lesson for India

 Dr. N. Bhattacharyya

People of developed countries – USA, EU and others were shocked by deep rooted and widespread recession from 2008/09 and in many of these countries they are still silently suffering in 2013/14. Unemployment in the USA and EU in 2008/09 reached double digits, however in 2012/13 though it declined to around 7 percent in USA but in most of the EU countries it still varies between 12 percent and 30 percent. ‘In the USA inequality is back to where it was before Great Depression, and the richest 1 percent captured 95% of all income gains since 2009, while the bottom 90 percent got poorer....’1. Such is the horrible real economic situation of the vast number of people in 2014 in many imperialist countries for continued adhering to disastrous economic policies targeted to help some selected few to amass wealth at the cost of vast majority of their own people. Unemployed parents, as reported, of some erstwhile developed countries are forced to hand over their children to orphanages! Why are the people of these countries assured that their economies will improve without bringing in a new system catering to the need of majority of the people and stop permanently such disasters from being repeated?

Mr. Obama in his State of the Union address on 28.01.14 suggested among other things an increase in the minimum wage rate per hour from 7.25 US dollars to 10.10 US dollars or 1600 US dollars per month (40 hours per week and 4 weeks per month). He threatened the business community that he would use his executive powers if the Republicans refused to pass a law to this effect. The gap in remuneration between an ordinary worker in the USA against that of the highest paid CEO in the same organisation is widening fast and resulting in widespread protest in the entire country. This particular issue of massive inequality in developed countries was recently discussed in the Swiss Parliament (Federal Assembly). It was proposed that the highest paid employee’s remuneration for one month in a year should not be more than the total of 12 months’ remuneration of the lowest paid employee in the same organisation. (1:12) However, by referendum this proposal was rejected!

The USA recently took into custody an employee of the Indian Embassy in that country for non-payment of the minimum wage of that country to her personal household staff taken from India. The Indian government tried hard to save its employee from legal complications even by transferring her to the UNO. The USA, however, refused to accommodate the request from the Government of India. She is back to India. In India the Minimum Wage Act, 1948, is there but it cannot be enforced because it is not enforceable as it is in many other countries of the world. It has helped in the massive growth of ‘contractors’ Raj’ or naked exploitation like ‘bonded labour’ etc. and created a huge market of slave labour in India in the 21st century. Both mainstream political parties and the corporates are extremely happy that ‘Indian labour is cheaper and very efficient’ than ‘onions and potatoes’ in the Indian market and that is the minimum condition for FDI dumping in India. The World Bank dictated policies (like liberalisation, privatisation and globalisation) are followed in this country to achieve a ‘higher rate of GDP growth’ or giving unlimited power to the private corporates to loot nakedly not only the scarce natural resources of this vast country but also to exploit our millions of unorganised labour forgetting their fundamental rights assured in Indian Constitution. Those big-volume, heavy-weight books of law on labour, environment have no relevance in India, except for historical references and/or for academic discussions. The well-known business families of this country who own huge wealth are busy 24 x 7 filling their money bags with condemned black money (trillionaires, billionaires and millionaires) and in league with foreign corporations they are busy discussing strategies how to appoint their nominees in the Cabinet after 2014 election!

The vulgar increase in inequality in income distribution in the so-called rich countries of the world are being implemented in the third world countries more vigorously through ‘development’, ‘GDP’ growth etc. etc. It is well known to these insignificant number of wealth accumulators that vast majority of deprived people are getting united to challenge such criminal policies. A report circulated in the recent meeting of World Economic Forum at Davos (January, 2014) by Oxfam titled ‘Working For The Few’ claims that the 85 richest people of the world own the wealth of half of the world’s population (7 billion). The report added that in India, the number of billionaires increased tenfold in the past decade while spending on the poorest remains remarkably low. The report claims that the richest individuals and companies in the world hide trillions of dollars away from taxmen in a web of tax havens – it is estimated that $21 trillion is held unrecorded and off-shore.’2 Recently the International Consortium of Investigative Journalists have revealed that between $1 trillion to $4 trillion in untraced assets have left China since 2000 and family members of top politicians of China are involved in transactions with their companies in tax heavens.3

India since independence following a distinct ‘growth’ and ‘development’ model and 67 years is sufficiently long time to decide to throw these destructive anti-people models into the waste paper basket and follow a policy or policies that people of this country want. Is there any forum in this country where every one can participate to decide what this country will produce, who will produce and how it will be produced? The present institutions have failed the people of this country and have proved totally irrelevant to the real needs of this country. How many people are really poor were never counted accurately and seriously as a matter of state policy. For mainstream political parties like BJP and Congress there are no poor people in India in 2014 – one claims that those who earn ‘Rs 11 per day’ are not poor and the other party claims ‘Rs 27’ is sufficient to be declared not poor. These advocates of such anti-national ‘models’ should be better packed in ships and sent to sail happily in Arabian Sea. It is said that Pandit Nehru declared in a public meeting that ‘black marketeers would be hanged’, but no action was ever taken against any corporate head either during his tenure or after his departure. The Radia Tapes now in possession of Supreme Court demonstrate how these MNCs function in India – they work as placement offices for politicians in different ministries including that in Union Cabinet, and in return favours are showered on them. Decisions on 2 G allocation, coal mine allocations and in many such issues punishments were ordered by courts for the well-planned loot of nation’s scarce resources. However, these criminals are there in large numbers in all policy-making institutions of this country. Recently some criminal politicians were thrown out of the legislatures and put behind bars as per Supreme Court orders but they are again seen planning new strategies being out on bail as per the Anglo-Saxon jurisprudence prevalent in India!

Indian politicians are playing relentlessly a broken disk since independence on ‘growth, growth and only rapid growth’ and pretend to ignore the fact that the growth rates of the USA and EU in 2013 were only 2 percent and 1.5 percent respectively. Even then the USA claims to be the number one economically developed country of the world in 2014 and not China. The USA also has huge ‘current account deficit’ but the dollar still rules the world market unlike the Indian rupee which no one touches outside its border! India’s GDP growth rate in 2013 is less than 4.5 percent and in some previous years it was around 9 percent per annum and on the face of it is much higher than that of developed countries. But why in 2014 is it that India has around 70 percent of its population who do not have purchasing power to access food? India requested the 159 members of WTO in recent Bali meeting, 2013 not to interfere with India’s food subsidy scheme? What happened to the so-called ‘development’ and ‘growth’ model that India was asked by the West to follow? Why was the Food Security Law enacted as late as in 2013, a few months before the 2014 election and not in 1950 when the Constitution was introduced and the disaster of 1941 Bengal Famine demanded such state interference on ‘food availability to all’ immediately after independence? However, in the recent meeting of the WTO at Bali, the Indian government agreed that the subsidy given on ‘food security’ would last only for 4 years and its continuation will depend not on the need of Indian people, rather it will depend on whims of the USA! Recently they have brought before the WTO the complaint that India was exporting rice at a much lower price than the prevailing international market price! In Tamil Nadu the entire population is covered by such a scheme and this is also required for the entire country. The export of food grains procured to sell at subsidised rates should stop forthwith. Both the child mortality rate and the growing number of malnourished children in India are quite humiliating and distressing figures.

The corporates are motivated only to earn disproportionate profits on capital employed and they are not accountable to any one, even to their minority shareholders. Look how some power distribution companies are behaving in Delhi, because they are enjoying monopoly right to sell electricity when governments speak of a ‘free market economy and no monopoly or cartel of any sorts’. The non-performing assets of our commercial banks have reached recently such a level that if the corporates are not forced to repay their debt, the entire Indian banking industry will collapse. We have the experience of the bankruptcy of the USA’s financial institutions in 2008-9. Our politicians are undecided how to realise funds from corporates who do not want to repay loans because these are willful defaulters with public funds. These politicians have worked all these years as ‘paid agents’ of these anti-social corporates and they are shamelessly advertising their nominee to occupy one of most important chairs of this country in South Block, New Delhi (Prime Minister’s Office) through the 2014 General Election!

Politicians in USA, EU and their friends in Japan, South Korea, and Canada are well aware that the youth in general and those in the third world are in no mood to tolerate the anti-people profit accumulation strategies of the corporations who are looting this world for many years. The Occupy Wall Street protests clearly warned the decision-makers of the black clouds gathering on the horizon! What is happening in the Arab Spring clearly indicates that the old order has to change sooner rather than later. The present generation of youth across the world is on a mission to throw away the artificial barriers created over so many centuries to create friendship among people over continents. Race, religion, language, colour have no longer any importance to unite the youth of the world. India has to play a significant role in this hour of crisis so that everyone gets recognition as citizen of this world and is promised a dignified life for one and all. Professional politicians have to change their thinking process otherwise they will be left behind and rest of the world will march forward.

Today the political parties even in the developed countries are afraid to go against the public opinion of their respective countries. The NATO countries decided to go to war in Iraq and Afghanistan war on fabricated and manipulated stories. The continuous arrival of body bags from the devastated war fields compelled the citizens of these countries to promise not to send their sons to die in foreign countries. The decisions of the British Parliament and US Congress not to send in their armies to fight against Syria in 2013 clearly respected public opinion of those countries. President Putin’s remark on the eagerness of France and the UK governments to attack Syria is quite significant – he asked the locus standi of these economically shattered insignificant countries of the world in 2013 who are suffering from severe depression since 2008. The UN’s Security Council in the 21st Century must be reconstituted as early as possible keeping in view the interest of major section of world population and countries who lived for all these years on wealth stolen from the colonies and now totally bankrupt should be relieved of their responsibilities in the Security Council. The erstwhile colonies refuse to bail out these sinking ships.


Over the years the two main political parties in India adopted the same common economic agenda: to maintain ‘statuesque’ or simply to help the rich to become richer. As is written in the textbooks the poor and marginalised have to wait and see! The killing of fellow citizens is regularly committed by the existing political parties – the tribals remained the single largest group since independence and they continue to be the main target of police bullets. The planning to deploy Drones to destroy the tribals who are suffering since British days, because the rich mineral reserves of this country are protected by them, must be debated among the people and the governments should take full responsibility if their killing continues. Among the minorities the Muslims are the easiest target to attack and kill. What happened after the Babri Masjid demolition in 1992, the Gujarat organised killings in 2002 and now the Muzaffarnagar killings and displacement in 2013! Earlier we saw the killing of the Sikhs in 1984. It is also shocking that the UK under Thatcher was involved in Operation Blue Star! Unless a strong political force backed by people on the streets is developed in this country, civilians will continue to be killed by the state and central governments. Protests on the arbitrary military encounter killings in Jammu and Kashmir and in the north-east are printed in newspapers, but ruling political parties are never serious to stop permanently such killings. The Armed Forces Special Powers Act of 1958 is no longer relevant in 2014 and the army should be used exclusively to protect the country from foreign aggression, it is not paid and trained to maintain law and order within the country. The killing of people who disagree with the established political parties has to stop forthwith and if required necessary amendments should be made in the country’s Constitution as was done to stop permanently any ‘declaration of emergency of the 1975-­77’ type. The death penalty has to be deleted at an early date from the Indian Penal Code. In the same manner not a single human life should be destroyed by any political party recognised by the election commission as is happening regularly in the country.

In the 21st century human life is still haunted by the 18th century philosophy of the monstrous greed to accumulate and construct pyramids of more and more wealth protected by the most vulgar use of modern state weapons. How many types of security forces we have protecting not only the number one citizen of this country and useless politicians but also the innumerable moneybags whose main motive is to accumulate wealth at any cost – means was never an important issue for them. The horrible helplessness among the marginalised people mixed with a strong will not to surrender rather to fight back with all might is also seen widely. The majority of the media, both print and electronic, are in the pockets of the moneybags. They are busy 24 x 7 condemning all the forms of struggles of the common man specially those highlighting how millions of people are still living in expectation that governments will follow with all seriousness the provisions of the Constitution of India. In a recent event in Delhi, the capital city of India, the chief minister of Delhi with his cabinet colleagues were not allowed by the local police to go and protest before the office of the Home Minister of the country who is alone responsible to maintain law and order in Delhi State. They were confined in a park by the police and paramilitary forces for two long days by order of the federal government of the country. Their elementary right as ministers of a state government to protest against the lawless situation in their state was questioned without following constitutional processes. Most of the media was used to criticise such protests by the elected people’s representatives because they were afraid of the people’s anger and frustration directed against the vested interest of corporates milking this country for seven decades. The chief minister was criticised for ‘anarchist behaviour’ by the President of the Republic. However, within a fortnight the chief minister of Andhra Pradesh, belonging to ruling party in the centre, was on a ‘protest dharna on Delhi Road’ against his own party-led central government in Delhi on the Telengana issue. This question was resolved long back and central government agreed to divide Andhra Pradesh into two parts. If the previous dharna by ministers of Delhi government was ‘anarchism’ the subsequent one by the Andhra government was pure and simple ‘fascist and dictatorial’ behaviour by the ruling party both in the centre and the state. One has to get up and see the clear writing on the wall – how long the vast majority of this country will wait to get their due share of national wealth which is created by their sweat and blood?



 1. IMF Report, Indian Express, 5.2.14.

 2. Times of India dated 21.1.14.

 3. Frontier, 26th Jan to 1st February, 2014.

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