More deeply entangled in the crisis of international capital, the Indian capitalist class has now to offer two clear answers to the toiling people of the country — one is the Food Security Bill and the other is Narendra Modi. Somewhat realizing that it may not be possible to hush two thirds of the people of our country into silence, this class is keeping an alternative means at its disposal. Preparations are afoot to fan the flame of communal riots throughout the country. It is sending a clear message to the people that it knows how to bear down the protesters, by projecting “a new leader who is terribly ruthless”. There is another message, too, sent to the World Bank – IMF- US government as well as to the bosses of FICCI or CII that purports to say, “Give instructions to us what to do, the execution will be a twinkling of an eye away”. The Food Security Bill is on the other hand, the best example of the fundamental nature of distortion of capitalist development, typically Indian, as well as its strength. In the fiscal year 2013-14, India is supposed to expend Rs. 1,24,747 crore, annually on the Food Security. Indian capitalists are strong enough to dole out this amount at ease to pacify the people. The other reason behind this spending is that they know that it is not possible for them to let the masses of the people live a healthy and normal life by providing them with jobs, food, educations, health etc. All their reforms, development, increase of GDP etc. are meant only for the 20-25% of the population. For the rest is beggary. If the pity shown to the people fails to manage them, a “fascist leader” is being built up to deal with them with unprecedented ferocity.
The owners of capital are in grave danger throughout the globe. All around, the dark shadow of an impending calamity is lengthening before their well-wishes, too. The capitalists are trying to shift the burden of their crises onto the shoulders of the toiling people. In the post-2007 crisis, the conflict between the toiling masses and a handful of capitalist owners, strutting rabidly, has assumed a new form. In pursuance of limitless greed for profit, the capitalists, since the decade of 1990s have come in for a restructuring of the production system in the entire world. In the so called developed worlds the workers and other employees have been subjected to terrible attacks by layoffs, retrenchments, outsourcing ‘contract’ systems etc. Whenever the toiling people have come out on the streets in revolt, the state and the government cruelly suppressed them. As a result of the changes brought about in the global capitalist system for the last three or four decades and the attacks unleashed on the organized working class in the developed countries, the real wages of the workers have been continuously shrinking. As its fallout, lest the demand in the consumer market declines, the banks have been giving loans on a large scale for the purchase of consumer goods. Through the investment of speculative capital, the bubbles of instant increase of profit have been created in various fields of production. Under its effect, the grave crisis that overwhelmed the finance market of the U.S. swallowed up the whole world, resulting in the biggest crisis of the post-World War II global economy. Due to the great slump in global production, GDP in the developed capitalist countries fell by 3%. The developed capitalist countries like the U.S., Europe and Japan have not yet got rid of the ‘great depression’. The government of the capitalist countries and the international financial institutions had to pour in huge amount of money to bail out the bankrupt capitalist institutions. In consequence, Greece, Spain, Ireland, Portugal, and some other countries of the Eurozone fell into terrible debt trap. The governments, on their part, transferred the burden on the toiling people. Curtailment of expenditure on various social sectors set in, viz, retrenchment, wage-cut, pension cut, increase of taxes etc. The Government expenditure on social services was reduced heavily. In the interest of finance capital the debt-trapped Governments of the whole world imposed upon the people a severe “austerity regime”.
In the current crisis of the international capital the hardest hit Euro-zone has been finding no means to come out of this crisis. In September, 2013, the numbers of the unemployed increased by 60,000 more in the 17 countries of the Eurozone. The total number of the unemployed stood at 1 crore 98 Lac. This number has been increasing uninterruptedly for the last 29 months. Unemployment is 1 million higher than in September, 2012 and up by almost four million since the spring of 2011. Since the birth of the Eurozone, the present percentage of unemployment at 12.2% is the highest which varies from country to country: 4.9% in Austria, 5.2% in Germany, 26.6% in Spain, 27.6% in Greece, while unemployment in Italy rose to a record high of 12.5% in September, 2013. The jobless total in France also rose, up by 34,000 in September and by almost 2,50,000 in the past year.
The U.S., the ringleader of world capital, too, is not at ease. The most recent crisis continued for the last nine months. The debt ceiling crisis continued from January to 17th October of this year. The U.S. Congress compelled the capitalists of the world to spend sleepless nights. At last this crisis has for now come to an end after the approval of “Continuing Appropriations Act, 2014” by the U.S. Senate. The core of the problem, however, remains. For now, the U.S. Senate has asked the government to pay the money within 15th January, 2014, and debt ceiling has been suspended till 7th February, 2014. As a result of this crisis the U.S. Government went into a partial shutdown on Oct 1, 2013, with about 8,00,000 Federal Employees being put on temporary leave, which continued till 17 October, 2013.
On the other hand, in a review published by IMF in October, 2013 it is found that according to average of GDP percentage point for the 15 years period of 1998–2013, of the countries constituting BRICS (Brazil, Russia, India, China and South Africa) the rate of growth of China was 9.6% and of India 6.9%. Brazil and Russia had the growth rate of 2.9% and 4.4% respectively. Brazil’s economy, however, had to face and still is facing the gravest crisis in this period. For next five years, ie, till 2018 (in India’s case, till the financial year of 2018-19) according to IMF’s forecast on average growth rate, it will be 7.0% for China, 6.7% for India, 3.5% for Brazil and 3.5% for Russia. Evidently, the indication is that the condition of Brazil will be better than what it was in the last 15 years and the condition of China, India and Russia will worsen. The decline in the rate of growth is most significant in China and Russia.
At the present moment the most acute economic crisis in the capitalist world is to be found in the 17-country organization called the Eurozone. The growth rate of GDP in 2012 was -0.6% here, which can at most turn into -0.4% in 2013. This means that in the Eurozone, decline in GDP will continue.
In the developing countries like China and India to attract more and more foreign capital for investing in new areas, a competition amongst them is going on as regards decreasing the wage of labour and lifting the social security of the workers one after another. These developing countries are adopting policies in such a manner that they can gain more and more ground in the international production network with a view to increasing growth and developing their economic system. They are restructuring the economic system conforming to the principles of “ liberalization, privatization and globalization” to cater to the needs of the world capital. Along with the free movement of capital, to earn profit by investing in the share market has now become a prime means for the accumulation of profit. As early as almost three decades back, following the path shown by the headquarters of the world capital IMF-World Bank, India, too, in the name of globalization started an “era of liberalization” in an endeavour to make the programme of privatization, liberalization and commercialization a success.
The capitalist class of India now in power, has been facing much deeper crisis in the financial year of 2013-14. The rate of increase of GDP has come to 4.96% as compared with 6.2% in 2011-12. India’s capitalist class is expecting a 5.3% growth in 2013-14. The World Bank, however, has refuted this figure and stated that considering the plight of manufacturing and investment, this figure can by no means cross 4.7%. What is noticeable in this context is that in the entire period from the financial year 2003-04 to 2011-12, the rate of GDP growth never went below 6%. This growth touched its lowest in 2008-09, i.e., just a year after the horrible year of international depression. But even in that year the rate was 6.72%. The situation started to aggravate from 2011-12. The growth rate of agricultural product dipped to 0.9% in 2008-09 and slightly increased to 0.81% in 2009-10. It significantly increased to 7.94% in 2010-11. But in 2011-12 it again came down to 3.65%, further declining to 1.91% in 2012-13.
The industrial growth became as low as 4.44% in 2008-09. It increased to 9.16% in 2009-10 which continued up to 2010-11. But it came down to 3.49% in 2011-12. But it came down to 3.49% in 2011-12, further dipping to 2.10% in 2012-13.
This trend of decrease is the steadiest in the service sector. It kept declining from 2009-10, although unlike other sectors, it never dipped nearly to the bottom. The rate of growth in this sector was 10.50% in 2009-10, declining to 9.75% in 2010-11. It was 8.20% in 2011-12 and 7.10% in 2012-13. It is projected to be 6.6% in 2013-14. It should be noted that it was mainly the service sector that contributed most to the total increase of production in the last decade. This is clearly stated by the government itself. The contribution of service sector to the total growth of economy was 65%, followed by 27% of the industrial sector and a meagre 8% of the agricultural sector.
It is obvious that in each of the sectors, the rate of increase of GDP is lower in 2012-13 than what it was in 2009-09. That the situation did not become far worse is because of a comparative stability in India’s domestic market.
In September 2012, it was declared by the CII (Confederation of Indian Industries) that the industrial growth has nosedived to almost zero and that if the government does not play the appropriate role to boost up the economy the situation would further deteriorate. It has become a matter of regular discussion what one expects from the government. If the government tries to act in accordance with the demands of the capitalists, the people will put up a united resistance. Whatever steps may be taken to execute reforms will be tantamount to compelling the workers to sell the labour power unconditionally. This will result in a multiple increase of profit of the capitalists. At the same time wretchedness of the people also will increase. A very ferocious leader is extremely necessary to handle such a situation, one who will not hesitate to push the people to more and more misery, to terrible oppression, to ruthless massacre. Mr. Modi has emerged victorious from his baptism of fire in Godhra.
In respect of production of wealth, India’s position was 10th in the world. All the organizations of the industrialists of the world have announced that by 2020. India will become the 5th economic power (in current price terms, in U.S. Dollar), just preceded by the U.S. China, Japan and Russia. OECD, on the other hand, has announced that India has already become the third largest economic power, in purchasing power parity (PPP) terms.
It has become a matter of great concern to all why, even after shaking off the shocks of 2008-09, in the following two years the Indian economy had to face such a severe setback. From April to August of 2013, the fiscal deficit reached a high of Rs. 4.05 trillion which is 65.7% more than in the corresponding period of the last year. This is a figure given by the Reserve Bank of India and this is a figure which is fantastically high. Because of the high import cost of gold and oil, the Current Account Deficit (CAD) (the difference between the inflow and outflow of foreign exchange) has turned out to be 21.8 billion U.S. dollar which amounts to 4.9% of the GDP. This figure was 16.9 billion U.S. dollar, 4.4% of the GDP in the last quarter of 2013-14 (ending in March,2013), the Current Account Deficit is another indicator of the crisis of our economy, where growth is export-oriented.
The government has put forward three reasons to explain why things came to such a pass.
(1) The monetary and fiscal stimulus for increasing the demand in the post 2007-2008 crisis periods was exceedingly high. As a result, the final consumption from 2009-10 to 2011-12 increased in an average of 8% annually. It was followed by a high inflation and a high monetary response, which again, has decreased consumption demand.
(2) The corporate and infrastructure investment started diminishing for want of investment and relatively harsh monetary policy.
(3) In addition to slowing down of economy in general, two more factors affected our economy. One of them is the crisis of the Eurozone and the other is the uncertainties in U.S. fiscal policy– both of which have led to depression in the world economy.
These facts and analyses point to the truth that the more Indian economy has got entangled with the world economy, the more the vicissitudes of the world market have influenced the Indian economy and life of the toiling people. In the first phase of economic depression (2007-08), together with the entire world the economic growth and industrial production of India, too, received a jolt. Since the financial market of India was not deeply connected with the world financial market and since a measure of demand still persisted at that time, the effect of the crisis was not so terrible. But since the demand of commodities in Europe and the U.S. declined, in the export-based industries of garments, gem and jewellery, I.T. etc that are inextricably linked up with the world market, large scale retrenchment of the workers and gradual shedding of wage security ensued. Of late as soon as there were indications of stability in the U.S. and partly in Europe, foreign capital started fleeing to the developed countries. Under its effect the rate of economic growth in India plunged below 5% and there has been great devaluation of rupee against dollar, 1 dollar fetching more than Rs 65.00 . In consequence of this, the government’s expenditure on import of oil and other commodities is continuously increasing, inflation has assumed a dangerous proportion and the effect of all this is the misery of the toiling masses. Their salary/wage is falling far short of their expenditure and the portion of workers/staff whose income hovers on the brink of the minimum wage, find it too difficult to eke out a living by 10/12 hours of toil. Due to fall in export more than a lakh of workers lost their job only in garment industry in the last two years.
According to the estimates of the capitalist world, in the last two decades the Indian economy has grown very fast. This rate of increase lagged somewhat only behind China among the big economic powers of the world. On the contrary, according to the estimation of the World Bank in 2005, in respect of Gross National Income (GNI) per capita, India occupies the 159th place (of the two hundred countries). Judged from this aspect, India is a poor nation.
In 2007, the National Commission for Enterprises in the Unorganized Sector (NCEUS) of the government of India published a report, according to which 77% of the Indians, i.e., 83.6 crore people, make a living by Rs. 20.00 per day (USD 0.50 nominal, USD 2.0 in PP). The report further states that according to the statistics of 2004-05, of all the people in India engaged in work (45.7 crore), 92% are employed either as agricultural labours or as peasants, or as workers in unorganized sectors such as digging, brick kilns etc, or as workers in informal sector such as hawkers etc. The report says that the majority of those working and living under “miserable conditions” were lower castes, tribal people and Muslims and the most disadvantaged of them were women, migrant workers and children. The Report itself states that these people are three-fourths of the population, who are beyond the reach of economic growth.
In May, 2007 the British Government prepared a research paper on India for its parliamentarians. To give an idea of India’s poverty it said that the number of Indians who spend less than one dollar per day constitute 80% of the population.
Today the broad masses of the people of Europe, the U.S., Africa and the Middle East are fighting back with their back to the wall, against the common strategy of the world finance capital to deal with its crisis and to impose its domination over the globe. The world finance capital has made the very survival of the toiling masses so unbearable that at different corners of the world the people have come out on the streets in protests, agitations and revolts. The Occupy Wall Street movement that started in the U.S. two years ago dealt a terrible blow to the fortress of the world finance capital. The movements generated by the crisis in the Eurozone in various European countries, viz, Greece, Spain, Portugal, Island etc. indicate the gravity of the situation capitalism in general has been facing. The most important feature of these movements is the widespread participation of the working class and the student-youth. The forms and characteristics with which these movements have broken out against the austerity measures, unemployment, wage cuts as well as finance capital and its hireling governments, have definitely struck terror to the capitalists.
On 22nd July, 2013, the Planning Commission of India declared that poverty in India had declined from 37.2 per cent in 2004-05 to 21.9 per cent by 2011-12. The poverty line was determined as having the income below Rs. 816 per person per month in the rural areas and Rs. 1000 per person per month in urban areas. For a family of five, this amounts to Rs. 4,080 per month in rural areas and Rs. 5000 per month in urban areas. This means it will be Rs. 27.5 per day for the rural areas and Rs. 33.33 for the urban areas. Only these people are designated as poor.This is how the Tendulkar Committee has defined the poverty line.
The government has come out with its own calculation which asserts that even if any other measure is used than that of Tendulkar Committee, the great change that has taken place in respect of decrease of poverty from 2004-05 to 2011-12, will be borne out by the facts. Proving these claims made by the government ludicrous, many writings of the economists have already been published that not only show that Tendular Committee’s “Poverty line” is a mockery of the poor people of our country, but also these claims of the government as regards the poverty line are nothing but shameless manipulation of statistics.
While passing the National Food Security Ordinance, the Government has declared that the subsidized food grain will be given to 67% of the people. From the statistics given out by the Ministry of Rural Development, we have come to know that according to the ongoing socio-economic and caste census, excepting the top 35% of the population, the rest, i.e. 65% of the people will be held to be under the poverty line. What follows from this is that the government has been contemplating about dismissing the existing poverty line created by itself.
What is the significance of the “Food Security” in the perspective of the poverty of our nation? According to mathematics, if Rs. 1,24,747 crore is distributed among 67% of the 128 crore population, ie 86 crore of people, it will be Rs. 1450- per head per year. It will be Rs. 3.98 per head daily to be given to each of those falling under the category. The capitalist class wants us to silently bear with all their misdeeds in lieu of this sum of money.
Under such circumstances, what is most disturbing is the fragile organizational condition of the communist forces and the poverty of thought existing in them. When the exponents of the New Economic Policy have nothing left to them to offer to the majority of the general masses of the people, the real friends of the toiling people are not there in the arena of struggles. This is the most opportune moment to thoroughly expose the bankruptcy of the capitalists of our country and of the world to the advanced section of the working class as well as the other sections of the protesting people. It has been seen again and again in the world history that in the absence of the progressive forces, the common people were compelled to tread the wrong path. This is why now is the time that the communist activists and organizers have to be most active. Now is the time when we have to be ruthless towards our own weaknesses. If we become victim to pessimism or inaction, thinking that it is Modi’s times, not ours, it will facilitate the rise of Modis. The capitalists the world over are now in a disadvantageous position. In countries after countries, new slogans of protest are being made. Deliberations are afoot to find an answer to the question — “What is after capitalism?” It is by resisting the Rahuls-Modis-Buddhadebs that the genuine friends of the people will have to make headway among the people. We have to prove ourselves as a trustworthy force, as an alternative power. The challenge thrown by communalism cannot be dealt with only through discussions and seminars. The road to emancipation for the future toiling people lies in the fitting reply of the united working class to the champions of capitalism, in the fields of battle. In the past it was only the communists who acted as the most faithful comrades of the working class in this struggle. Now it is our turn.
This issue of Marxist Intellection is being published after a long time. It contains two articles. In the first one, the necessity of building up a superior communist party and the problems in its implementation have been presented in the perspective of the development of theory of the party and its international experience. In the second article “The Communist Hypothesis” a book written by the left intellectual Alain Badiou, has been reviewed. Marxist Intellection never deals with the theoretical problems only in order to accept or reject them. We have taken up two topics from an angle that demands our serious attention for the progress of the communist movement.
Already some critiques of our articles published in other issues have been published in various corners of our country. We wish to continue further studies on them in future. nnn
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