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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.
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