The Story of Economic Growth in India:
When Will All Sections of Indians Be Part of It?

Dr. N. Bhattacharyya

India celebrated its 66th Republic Day (January 26, 2015) and Mr. Obama, President of USA, was the chief guest at this year’s function. The Government of India knew that the USA will have a new President in 2016 and that the Democrats are in a minority in Congress. Whatever he agreed to here under the Indo-US agreement will be implemented by the Executive powers of a President, and this can be challenged anywhere anytime? Why the hurry, whom is Mr. Modi trying to impress? This agreement provides nothing, it is a repeat invitation to the multinational corporations of the world in general and those in the USA in particular to come and exploit the market of a country inhabited by 1.25 billion people! We have undergone this mental and physical torture a number of times before, especially since Prof. Manmohan Singh has implemented the ‘structural adjustment of world bank’ since 1991!

Multinational Corporations (MNCs) in unlimited numbers landed on Chinese soil after the demise of Chairman Mao, and from the early 1980s the entire capitalist world was very happy with more and more surplus generated by their corporations from the huge export-import business from China. Everyone in China and in other rich countries was feeling proud in accumulating foreign exchange. The experience of the last three and half decades clearly shows that the Chinese economy has grown into the number one economy and the USA is feeling uncomfortable as number two in the world economy from 2014 onwards. The USA administration cannot accept such things as happening. The Prime Minister of the previous NDA Government in Delhi accepted the USA as a ‘natural ally’ (Mr. Atal Behari Vajpayee) and in 2015 the USA wants India’s partnership to teach lessons to the anti-US lobby of world!

After accepting the Delhi’s P.M’s Chair, during his planned tour of some selected countries the new Indian Prime Minister visited Japan and Australia but China was not in his list. After the end of World War II in 1945, there is still today a huge US military force present on Japanese soil, though every year on 6th August, Hiroshima Day, the people of Japan request their Government to send back the US military from Japan’s soil. The USA has also sent a large contingent of US Marines to Australia. People ask questions whether all these concentrations of US forces in the Pacific and Indian Ocean are to hedge in Chinese expansion policies.

There are speculations that after the serious failure of the NATO powers to land their army on Syrian soil, the USA is seriously interested in organizing another NATO-type organisation involving countries in the Indian and Pacific region. Mothers in the NATO countries demanded that in any future war, there should not be any body bags returning from the fields of war located outside their countries. The new Indian Prime Minister met Mr. Obama outside India twice during the last 6 months, once in the USA in September, 2014 and the other in Myanmar in November 2014. In January 2015 Mr. Obama himself came to India. Will China, Russia, North Korea and others accept this new version of an Asian NATO? What is the reaction of the Indian Parliament on the new foreign policy of the NDA Government? Is it in the long term interest of Indian people?

The Indo-US bhai bhai is nothing new; it was imposed on the Indian people in the most vulgar manner in 1991 through a high profile World Bank project called ‘structural adjustment’ or ‘liberalisation, privatization and globalisation’ ( LPG). The result is before us: first, the entire developed world led by the USA went into a deep recession from 2008 onwards, which compelled President Obama and teams from other developed countries to visit India to sell their goods and services, including used nuclear reactors, Boeing and Airbus planes and other military hardware. After the recent nuclear plant disaster in Japan, many countries promised to dismantle their nuclear plants - Germany was one such country. Now they want to sell these worn-out reactors and the Government of India is willing to buy such dangerous technologies. Only recently both the US and Germany have emerged out of recession but still today the thick dark black cloud of recession is hovering around the entire developed world. After the recent crash of oil prices from $120 per barrel to less than $50 per barrel, the recession has reached new countries such as China, Russia, Japan, etc. The election results in Greece in 2015 is a signal that the ‘austerity’ measures dictated to poorer EU members by both Germany and the US are no longer acceptable and unless they sincerely try to help the rest of the EU members, the USA and Germany may have to face more disintegration moves in the so-called capitalist bloc. Spain is also trying to follow Greece.

Table I explains the GDP growth over a period in some countries.

Table I: GDP Growth

Countries / year 1900 2000 2014
USA 312 8032 17416
China 218 4319 17632
Japan 2628 4788
UK 185 2435
India 170 1900 7277
Germany 162 1557 3621
France 2587
Italy 2066
Turkey  – 1512
Iran  –  – 1284
Egypt  –  – 945

N.B. GDP in billion dollars at 1990 prices
The 2014 Figures are from the IMF Report based on PPP (Purchasing Power Parity)
(Times of India December 5, 2014)

The above figures in Table I are very significant for the USA. The IMF and World Bank are products of World War II, dictating future economic policies to the world and exclusively to promote the narrow interest of only NATO powers. Conventionally the President of the World Bank is a nominee of the USA Government and that of the IMF will come from one of the EU countries. The rest of the world does not exist in this scheme of things even in 2015! So these rich countries were felt well-protected during last the 7 decades. The IMF report in 2014 on GDP projections for 5 years made the entire NATO world quite speechless! (Table II)

Table II: Estimate of GDP

Countries / year 2014 2019
China 17632 26867
USA 17416 22147
India 7277 11044

(5 year estimate of GDP based on PPP (Purchasing Power Parity)
issued by the IMF in October 2014.
(Times of India December 5, 2014)

The USA leadership has to explain to their people what is wrong with their country. The MNCs of the USA and other developed countries were earning huge surpluses from China all these years since 1979 by producing goods and services at very low prices. China had a single point charter to earn maximum foreign exchange by exporting huge quantities of goods and services, of both very good quality as well as of very inferior quality (!). The Indian markets are flooded with poor quality goods and services, including even pharmaceuticals produced by the MNCs in China and dumped in India. The exploitation of the natural resources from the developing countries at throw-away prices was their main business mantra. All illegal mining activities in India, including iron ore, were meant to supply China. Both China and Russia condemned the US aggression against Iraq but they also joined in the grand loot of the oil resources of Iraq. To achieve the maximization of surplus in international trade, these MNCs working in China have adopted all forms of corrupt business practices, including dealings through tax havens and involving family members of the party in power in China in all forms of corruption and unethical practices. One understands why there is so much hue and cry that the Chinese economy is slowing down etc. etc. because the corporate world is feeling fully insecure in China! During the recent turmoil in the oil market both China and Russia were trading oil not in US dollars. Today’s China is not like Cuba of the 1960s – it is a member of the Security Council. It is in control of huge productive machines and the largest technically skilled human resources of the world. It has accumulated huge wealth to fight against any country. Is it in the interest of India to be dragged into such a dirty game to serve the interest of some other country? Both the USA and China are strong enough countries to protect their own narrow self-interest.

India’s growth story

If the Projection of GDP by the IMF in Table II is any guide, by 2019 when the present Central Government will seek a fresh mandate after their first term, the country’s GDP will be in third place but by population it will be second only to China. In 2015, except for the USA and Germany, the rest of the so-called developed world is in recession. Every country including the USA and Germany, who want to export and earn foreign exchange, will purchase India’s goods and services. Though India’s current account deficit has declined due to the fall in oil prices, this is a short-term plan; the price of oil cannot go down for all time to come! In such a world scenario how can India increase its exports to pay for its increasing imports of military hardware from the US as agreed to recently?

Land Ordinance

The 2013 land acquisition law tried to give some protection to tribals and agricultural land holders. The Government’s ordinance on land acquisition proposes to help corporations take over agricultural land as and when they want. Tribals are the worst sufferers despite the forest right act and now small and marginal farmers will join the long queue of landless agricultural workers. The Supreme Court has already decided that the natural resources of India cannot be allotted in an arbitrary manner; rather they should be given to the highest bidder. Our natural resources such as minerals are in the tribal areas, international conventions have made it an obligation for Governments to protect their tribals. India in 2015 has to preserve its tribals as they are protected in different parts of the world. The Government of India has already done huge damage to the Indian tribal population. In a recent agitation outside India against Vedanta’s project in a Tribal belt in Orissa, many institutions in Europe sold their holdings in Vedanta and charges were made that the interests of tribals were sacrificed by Vedanta’s project. The Indian Supreme court cancelled that project and the tribals were protected.

The Government’s land acquisition policies always remained anti-poor and pro-rich. The SEZ (Special Economic Zones) Act of 2005 helps the Government to acquire land for promoting infrastructure to increase exports. This acquired land made many landowners destitute, but the new allotters in the SEZ were earning huge profits by selling these lands. The Auditor General’s Report clearly indicts the Government of India for such illegal activities. Reliance Industries and Essar oil are some of the corporations who indulged in these activities (Times of India December 3, 2014). Land for commercial purposes cannot be by destroying cultivators. Greed to make ‘profit’ by destroying some human beings must stop and it is the duty of society to do justice to needy people. There lies the duty of the judiciary, to stop the destruction of agricultural land and at the same time help economic growth.

Labour Unions

Both corporations and Governments think that labour unions are unnecessary and irresponsible, and that laws must be made more stringent so that corporations are never challenged by organized workers. The MNCs have never learnt to tolerate labour unions. Without labour no production is possible and nowadays trained and educated labour is appointed in greater quantities. Modern management can ignore the interest of labour at its own peril. It is simple foolishness on the part of the Government to dictate how labour should behave with management; labour laws and other commercial laws should be based on the democratic aspirations of the country. Hitler’s age is history. Governments are trying to behave in a dictatorial manner just to help corporations to multiply ‘pennies’. All the political parties have for a long time had very responsible trade unions. Unfortunately our politicians have never learnt this lesson. Recently all the Trade Unions of the Indian Coal Mines were on strike against the ‘privatisation’ of the Coal India Limited (CIL). After two days of a successful strike, the Government assured the workers that privatization was not on their agenda and they were asked to call off the strike. Disinvestment in Coal India shares has materialized, are the unions feeling ignored? It is not the fault of workers; every management both in the Private and Public sector must understand that in most cases the workers and consumers are the same group of people, sometimes their role changes—there is no clash of interest. No Government can function working against the interest of its workers and consumers. Organisations like Wal-Mart have invited many notices from various Governments for their anti-worker stand! The employment of child labour has to stop; let us know which political party wants to ignore this. Unorganised workers are used as slaves and unless their working and living conditions change radically soon, the Indian corporate sector will remain condemned. What steps is the Government proposing to save the workers employed by contractors, depriving them of all the benefits due to the rest of the Indian workers. The role of labour in the Indian economy has to be reassessed and they should be honoured and respected. Trade and industry have to behave, keeping in mind the totality of the Indian economy.

What about the Indian poor?

We are not discussing the basic issue of Indian poverty, both its depth and breadth. Let the new NITI (new form of the old Planning Commission of India) tell us what it will do with these people. However, it is a fact that unless sincere efforts are made to reduce the number of undernourished children, all our advertisement of GDP growth will be an insult to the country. This can be achieved by supplying adequate food and medicines to targeted families. If we can transfer cash through bank accounts to targeted families for distribution of various subsidies, why it will be difficult to meet the need of malnourished families? A time-bound programme may be started. The UPA decided that 67 percent of people deserved subsidized food, but the WTO did not like it. ‘Profiteering’ in essential food items is not always related to ‘supply and demand’ in developing countries. The famine in the 1940s in undivided Bengal was organized by the British Raj to teach a lesson to the people of the state from which Netaji Subhas Bose came and organized the Azad Hind Fauj. The NDA Government has to explain why suddenly some committee had to be appointed in a hurry to go into this particular issue and within days it thought fit to reduce number of people who needed subsidised food from 67 percent to 40 percent! What was wrong with that figure? Like the worst form of dictator, the Government of Maharastra arbitrarily reduced the number of beneficiaries of subsidized food by 1.7 crores. Is this a democratic country? Can the Chief Minister of that State ask the P.M. of India not to use helicopters for election purposes for the Delhi elections is less than half the size of Goa? Whose money is wasted in this fashion? Submission to the WTO’s demand to safeguard the interests of the world commodity traders and their friends in India cannot be on the agenda of a sovereign country! All Indians have a right to live with dignity in this country.

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