In 1991, India, one of the bastions of
third world dirigisme since the days of Jawaharlal Nehru, embarked
on a neo-liberal economic policy-course, a shift which was ranked
by a leading World Bank economist of the time among the "three
most important events of the twentieth century", alongside
the collapse of the Soviet Union and China's turn to "market
reforms". The immediate provocation for India's switch
was a balance of payments crisis caused by a combination of
the Kuwait war, and a flight of Non-resident Indians' deposits
with Indian banks. But this was a minor problem which could
have been handled without any change of course : the real reason
for the change was that the contradictions of the dirigiste
strategy, manifested above all in a fiscal crisis of the State,
had brought it to a cul-de-sac, where the bourgeoisie, especially
newer sections of it, wanted to adopt a neo-liberal regime,
which imperialism had been pressing for anyway. While the government
of the Congress party initiated the neo-liberal reforms, it
is the government led by the Hindu right- wing party, the BJP,
which came to power in 1998, which carried forward these reforms
with a vengeance.
This might appear intriguing at first sight. The BJP is the
political wing of a fascist organization called the RSS, which
had been formed in the 1920s preaching virulent communal hatred
of the Muslim minority. It had played no positive role in the
freedom struggle since it was fundamentally anti-Muslim rather
than anti-colonial. It had actively participated in the communal
riots that followed independence and partition of the country,
and one of its followers had assassinated Mahatma Gandhi. Though
there was no evidence linking the organization to this act,
it had been banned for a while until it pledged to abjure politics.
It had formally kept the pledge by setting up the BJP as a front
political organization, which adopted all kinds of opportunistic
slogans, even though the consistent objective of the RSS has
always been the establishment of a Hindu State. Like other fascist
outfits however the RSS too has a Radical Right opposed to the
hegemony of the MNCs and global finance, and advocating "swadeshi"
or "indigenous capitalism", which makes the BJP's
avid espousal of neo-liberalism rather curious.
But RSS/BJP is not a religious fundamentalist outfit of the
sort one finds in several middle eastern countries. It is much
more in the fascist mould. While appealing to religious sentiments
(its recent rise to power was propelled by the destruction of
a sixteenth century mosque in Ayodhya on the grounds that a
temple had to be built on that very spot since Lord Rama, the
Hindu deity, was born there), it is technology-savvy, and has
a large following among well-to-do professionals of Indian origin
in the U.S. and elsewhere who combine the conservative politics
of their adopted land with an RSS-mediated vicarious link to
their "cultural roots". The BJP with its long-standing
affinity for Israel, and hence for the U.S. (especially after
September 11), was quick to jump on to the neo-liberal bandwagon
and establish for itself a sizeable chunk of support among the
domestic nouveau riche, young upwardly mobile professionals
(the yuppies) and sections of the bourgeoisie (in addition
to its traditional petty-bourgeois base). The Radical Right
within its ranks, under the circumstances, was silenced with
ease.
With all its communal appeal and propaganda, the BJP never succeeded
in getting more than a quarter of the total votes in the country,
fractionally less than the Congress, and that too on account
of a degree of disillusionment of the people with the first
five years of neo-liberal reforms. It ruled however with the
support of a number of regional and smaller parties, some driven
by local anti-Congressism, some tempted by the offer of financial
assistance to state governments run by them in a situation where
the states have been fiscally squeezed by the Centre, some tempted
by power, and some merely jumping on to the bandwagon. The BJP
was however the undisputed leader of the coalition government
(of 22 Parties) termed the National Democratic Alliance from
1998. Its writ ran, and ran to devastating effect.
In foreign policy, India moved much closer to the U.S., and
the government even toyed with the idea of sending troops to
Iraq at American request, until massive popular opposition made
it desist. Though not formally abandoning India's traditional
support for the Palestinian cause, it warmed up to Israel, and
there was even occasional talk of an India-U.S.-Israel axis.
In the name of fighting terrorism, it enacted a draconian law,
the Prevention of Terrorism Act (POTA) providing for arrest
without bail and trial by special courts. The RSS cadres targeted
the minorities, the Muslims of course, but additionally the
Christians as well. Christian missionaries were attacked in
many places and a law banning conversions was demanded. Government-run
cultural and educational institutions were sought to be handed
over to persons of little expertise but with known RSS loyalties.
A whole set of text books, reinterpreting Indian history to
the liking of RSS, was sought to be introduced at the school
level. And obscurantist courses on astrology and Brahmin priestly
practices were sought to be introduced at universities. Since
"Communists" were vilified, and any liberal opinion
opposed to the RSS was called "Communist", all scholarly
activity in effect was treated with suspicion. The best-known
painter, and the best-known theatre activist of the country
who happen to be Muslims were attacked. Above all, there was
a massive pogrom against the Muslims in Gujarat from February
2002, organized with the connivance of the state government
which was and continues to be headed by a hardcore RSS loyalist.
The state-aided pogrom was apparently in retaliation for the
killing of some Hindu activists, though the exact nature of
this killing still remains shrouded in mystery. In short there
was a veritable assault on the country's composite culture,
the secular foundations of its polity, and the entire legacy
of its anti-colonial struggle.
This legacy was undermined in the economic realm too through
a determined pursuit of neo-liberalism. The neo-liberal decade
of the nineties has witnessed a massive deflation. Since the
tax-GDP ratio has come down, as a fall-out of tariff cuts and
"incentives" for investment, since the interest on
public debt has been raised, and since enlarging the fiscal
deficit has been taboo (notwithstanding the coexistence over
much of the period of unwanted food stocks, unutilized industrial
capacity and burgeoining foreign exchange reserves), the governments,
both at the Centre, and, through the latter's arm-twisting,
at the state-level, have cut expenditures drastically, especially
social sector expenditures, investment expenditures, rural development
expenditures, and transfer payments to the non-rich. This has
brought about an infrastructure crisis (which no amount of red
carpets for the MNCs has succeeded in overcoming), a running
down of public education and health facilities (accessed mainly
by the poor), and a compression of aggregate demand through
a reduction in purchasing power, especially in rural India.
Notwithstanding the fact that the growth rate of foodgrain output
fell behind the rate of population growth for the first time
since independence in the nineties, so drastic has been the
fall in purchasing power, especially in rural India, that there
were 65 million tonnes of foodgrain stocks lying with the government
by June 2002, even though per capita foodgrain absorption for
the country as a whole had fallen by that date to what it had
been on the eve of the Second World War. To get rid of the stocks
the BJP-led government sold foodgrains in the international
market at prices below what the poorest in the country pay,
even though there was growing mass hunger at home ( reflected
in the abnormal stock accumulation).
Reduced infrastructure investment, combined with the curtailment
of subsidies to the peasantry, the virtual end of the regime
of low-cost credit directed to agriculture, and the import of
the world price-crash for many crops under the new WTO dispensation,
caused a massive agrarian crisis with thousands of peasants
in several states, including even prosperous ones, committing
suicide. Small scale industries too faced closure in the new
context of high-cost credit and import liberalization. Even
though there was considerable expansion of IT-related services
and Business Process Outsourcing to India (which the U.S.Presidential
candidate Kerry now wants to restrict), employment opportunities
shrank both in urban and rural areas. Organized workers faced
retrenchment, "voluntary retirement", and vastly reduced
bargaining strength, with the Supreme Court even giving a verdict
against their right to strike. The need for "introducing
flexibility into the labour market" (a euphemism for a
wholesale attack on workers) began to be openly aired.
All these have been experienced in other countries, and may
not sound much to an outsider, but in India with its long history
of dirigisme, its strong democratic tradition inherited from
a prolonged anti-colonial struggle, it represented an unimaginable
shift, and especially so when the BJP-led government started
selling off profit-making public sector enterprises at throwaway
prices to the private sector (some of which were resold within
weeks at a multiple of the price at which they were bought).
Even the oil sector, control over which had been acquired after
decolonization, through a prolonged struggle against the oil
majors and imperialist agencies acting on their behalf, and
that too only because of the help from the Soviet Union, was
sought to be privatized, with an initial clutch of the shares
of the highly-profitable public enterprise, Oil and Natural
Gas Commission, being bought by the nominees of Warren Buffet,
the Californian financier.
Meanwhile however the stock-markets boomed; foreign exchange
reserves multiplied, reaching a staggering $110 billion by early-May,
as the Reserve Bank tried to keep currency appreciation in check
in a situation where India was becoming a "parking place
for dollars"; and the cities became jammed with imported,
or locally-assembled, cars, as the upper echelons, which in
India would still run into a few millions, prospered under the
new dispensation, a prosperity that was played up in the media,
both internationally and locally.
The BJP-led government, taken in by this hype which was sustained
by several Opinion Polls, decided to call for early elections,
and campaigned on the slogan of "India Shining", and
of a "Feel Good" factor in the air. It was faced by
a Congress-led secular alliance in several states, and by the
Left in its own strongholds. The alliance between these two
was confined to a few states, though it was well-known beforehand
that the Left would support a secular government at the Centre.
The election outcome was a resounding defeat for the BJP-led
alliance, the like of which had not been seen since 1977, when
Indira Gandhi had suffered a humiliating defeat in the election,
which she had called to legitimize her authoritarian rule imposed
during the "Emergency". The Indian people had once
again risen to the occasion. These election results show above
all the strong roots that electoral democracy has struck in
India. The sheer fact of people across what is virtually an
entire continent acting in unison, without any prior contact
with one another, despite being apparently fragmented along
language, religion, caste and other lines, and stubbornly against
what the pundits had been telling them about "India Shining",
is indeed quite overwhelming.
Their verdict however is not only against the BJP. It is against
the neo-liberal policy course. It is noteworthy that even in
Congress-ruled states like Karnataka and Punjab, where the writ
of the World Bank or the ADB ran, and the peasantry was driven
to suicides, the people voted against the Congress, as they
had done a few months earlier in Madhya Pradesh, throwing out
the Congress government there. Indeed ever since the introduction
of neo-liberal "reforms" in 1991, the tendency has
been for "reform"-oriented governments to be voted
out of power, but this fact could always be camouflaged by dragging
in this or that specific explanation of the concerned government's
unpopularity. The recent election outcome however reveals this
fact clearly and sharply. It is not surprising that the Congress,
sensing the popular mood, came out with an election manifesto
that is at variance with the neo-liberal agenda which it had
itself been instrumental in introducing into the Indian economy.
Indeed the two most striking features of these elections have
been the shift in the avowed position of the Congress Party,
and the strong emergence of the Left. The Congress manifesto
talked of the revival of public investment, of emphasis on the
agricultural sector, of strengthening the public distribution
system for foodgrains and certain other essential goods, of
not privatizing profit-making public enterprises, and above
all of an employment guarantee scheme that would ensure a minimum
of 100 days of employment per year to at least one member of
each household. These, among others, were the demands of the
Left during the heyday of neo-liberalism; the Congress' adopting
them is symptomatic of the popular mood, as is the strong emergence
of the Left, admittedly only in its areas of influence.
The Left, consisting of an alliance of four Parties, obtained
62 seats in a House of 543, its highest tally ever. It virtually
swept the polls in the three states where it is a major force,
West Bengal, Kerala, and Tripura. Since a secular government
could not be formed without its support, there was a view that
it should join the government in order to strengthen it. Though
this view was ultimately rejected by the Central Committee of
the Communist Party of India (Marxist), the largest of the four
Parties, and the Left decided to support the government from
outside, what was significant was the fact that a very large
number of artists, intellectuals and social activists, representing
a whole spectrum of political views, from Gandhism to anarchic
Leftism, to social democracy, to NGO-style progressivism, entreated
the Left to participate in government. Many of them have traditionally
been hostile to the organized Left. The fact that they nonetheless
wanted the Left to be a part of the government to defend the
peoples' interests, shows a significant re-alignment of socio-political
forces, a coming into being of a new kind of relationship, towards
which the Left's active participation at the World Social Forum
at Mumbai in January 2004, was a pointer.
The new government has been formed on the basis of a Common
Minimum Programme, which, though well short of what the Left
would have liked, has been broadly endorsed by the Left and
has been generally well-received. The Programme does represent
a shift of direction away from neo-liberalism, by re-asserting
the centrality of State intervention for improving the living
conditions of the people. No matter what the specific provisions
it begins with, if there is an honest adherence to this perception,
then that would inevitably set up an alternative dialectic away
from the neo-liberal trajectory.
Not surprisingly therefore globalized finance has not taken
kindly to the CMP. Indeed India at this moment represents the
classic spectacle of a struggle between the will of the people
demanding a shift away from neo-liberalism, and the will of
international finance capital, and its local allies, demanding
a continuation of neo-liberal "reforms", with the
bulk of the English-language media, both print and electronic,
pitching in with the latter. Finance capital fired the first
shot in its struggle against the peoples' will during the election
process itself (which in India lasts several days), with the
intention of influencing the peoples' verdict. When the exit
polls after the first few rounds of voting suggested difficulties
for the BJP-led government's return to power, the stock-markets
crashed, and the BJP promptly appealed for votes in the name
of financial stability. When the results came out and the Left,
without which a government could not be formed, expressed itself
against disinvestment in the core sector and of profit-making
public enterprises, there was again a crash on the stock-market,
which the media played up suitably as portending disaster.
This was absurd, since stock prices have very little impact
on private corporate investment decisions in India, let alone
on the overall investment ratio; since the so-called "losses"
owing to stock price falls are mainly "paper losses"
with no impact on the real wealth of the country; and since
in any case only about 0.1 percent of the country's population
participates in the stock market. But the media blitz was unrelenting:
a thousand billion rupees of wealth, it was claimed, had been
"wiped out" because of the Left's "ideological
intransigence". Emboldened by this brou-ha-ha some financiers
even held a demonstration against the stoppage of disinvestment
of profit-making public sector units (as if grabbing peoples'
property was their birthright)!
There was some revival of the stock-market when Sonia Gandhi,
the Congress leader who had struck a chord with the masses and
had virtually single-handedly brought that Party to power, and
who, because of her "inexperience" was seen to be
"pro-poor", made way for Manmohan Singh, the original
architect of "reforms", to be Prime Minister. But
the when the CMP was released to the public there was yet another
crash. The new Finance Minister Chidambaram, also with a pro-"reform"
background, has been trying to reassure finance capital in various
ways, but with ambiguous results so far. Capital flight has
not been a problem as yet, but not a day passes without the
media circulating scare stories about the implications of the
CMP.
The question that arises is: what will be the outcome of this
struggle? Where is India heading? The dependence of the government
on support from the Left would ensure that it would not make
a complete volte face on its commitments embodied in the CMP
in the matter of economic policy. Even though the Left has assured
support to the government for a full five year term, it is unlikely
that the government would exploit this commitment to push a
neo-liberal agenda. The least that can happen in this respect
in the short-run therefore is a "freezing" of "reforms"
with some measures to alleviate the peoples' hardships, such
as have been announced by the new government of Andhra Pradesh,
where the previous regime, much loved by imperialism, has been
voted out. And certainly in the matter of removing the baleful
influence of communal-fascism in the sphere of education, in
eliminating POTA from the statute books, in bringing in stringent
laws against the fomenting of communal violence, in correcting
the foreign policy bias of the BJP-led government, and, generally,
in refurbishing the secular foundations of the polity, much
can be done.
Taking a somewhat longer view however it is clear that since
the adoption of the neo-liberal agenda was in part a result
of the fact that old dirigisme had brought the bourgeoisie to
a dead end, the capacity of the latter to chart a new course
away from neo-liberalism is limited. The current bourgeoisie
is not the bourgeoisie of the period of the anti-colonial struggle,
just as the current imperialism differs vastly from the old
colonialism. The current bourgeoisie is in no position to provide
the lead in charting an anti-imperialist development trajectory,
even though it might benefit from such a trajectory and sections
of it may even join the movement for adopting it. The lead for
such an alternative trajectory has to come from the Left. In
other words the current developments in India mark the beginning
of a process, which no doubt would be protracted and tortuous
with several twists and turns, of a polarization of society
into two camps, a pro-imperialist camp supported by the Fund,
the Bank, globalized finance and the MNCs, and an anti-imperialist
camp led by the Left but encompassing diverse elements. Imperialism's
impending defeat in Iraq would provide space for the consolidation
of the latter camp, but the degree to which such consolidation
can be successfully accomplished depends crucially on the ability
of the Left to overcome sectarianism and narrowness of outlook
and unite the widest possible segments of anti-imperialist social
forces. The people in a whole lot of third world countries,
to whom India is the latest addition, have rejected the neo-liberal
agenda, imposed by imperialism, in recent months. A new anti-imperialist
stirring is visible in the third world. The Left has to respond
to it, and only by doing so can it move forward to its eventual
objective.
June 9, 2004. |
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