Towards a People-centric Eco-friendly Development Agenda

NO unbiased observer would deny that the economic situation in India is indeed frustrating. Nor would anyone say things were any better in the past. More than 60 years have been spent blaming this or that economic model/strategy and this or that political party/coalition for this sordid state of affairs. Is it not high time we recognised it as a grave systemic problem basically caused by internal deficiencies and distortions and further accentuated by the global economic turmoil? And searched for a real solution – radical but practicable, difficult and time-taking but achievable step by step?

Lessons from International Experience

Well, this search could be facilitated if we spared some time looking at the recent international experience. Since the Indian context is very different from those of the world’s richest countries like the US and Germany, it would be of little help discussing their cases. As for troubled countries like Greece, Cyprus, Iceland etc., the central lesson is that stringent austerity measures imposed in these countries under pressure of international finance capital have proved absolutely counter-productive. These economies have been contracting for years together as a result of expenditure cuts while people’s hardships are growing, compelling them to overthrow governments – even recently elected ones like the pseudo-left government in Iceland in April last year – and staging powerful street protests (as in Turkey and Brazil very recently). If anything, the experience in these countries can only teach us what we should not do.

Positive lessons can of course be learnt from Latin America. Led by Cuba and Venezuela in particular and ably supported by other countries like Bolivia and Ecuador, the Bolivarian Alliance for our Americas (ALBA) is building an alternative to the US dominated trade with the aim of regional economic integration based on cooperation for mutual social welfare, bartering and economic aid. To further deepen Latin American integration and challenge American domination, ALBA has been followed up with CELAC (the Community of Latin American and Caribbean States) comprising 33 sovereign countries in the Americas excluding the USA and Canada. These are highly inspiring and instructive collective endeavours; something which countries in the Indian subcontinent could perhaps try and emulate, with the largest among them taking the lead.

Again, we can gain some useful insights from the experience of our major northern neighbour. Both India and China are ancient Asian nations with close cultural and economic ties spanning centuries; currently both are poster boys of globalisation, economic reform and high-speed capitalist development. Yet, as we shall just see, apart from structural differences there are subtle but vital differences in the political attitudes and economic policies of the two governments, which account for very different results of reform.

Chinese Experience as a Reference Point

Everybody knows that our country attained independence two years before China did. It was in a better situation at that time in terms of industrialisation and availability of cultivable land as well as several mineral resources like coal and iron. Pranab Bardhan, however, gives us some more interesting information:

“India was slightly ahead of China in 1870 as well as in the 1970s in terms of the level of per capita income at international prices, but since then, particularly since 1990, China has surged well ahead of India. India’s per capita income growth rate in the past two decades has been nearly 4 percent. China’s has been at least double.”Pranab Bardhan, Awakening Giants, Feet of Clay, Assessing the Economic Rise of India and China, Princeton 2010, p 12

In other words, the strategy of opening up and reform in the era of globalisation has been incomparably more successful in China than in India. There are many important reasons, not the least being the much stronger fundamentals built up in China in the pre-reform decades despite many mistakes and the disastrous economic impact of the Cultural Revolution.

There is a common misconception that China’s spectacular growth in recent, i.e., post-reform decades have been export- driven from the very start. Bardhan, however, has shown that “in terms of growth accounting, the impact of net exports on China’s growth in the period 1990-2005 has been relatively modest compared to the impact of domestic investment or consumption. Second, China had major strides in foreign trade and investment mainly in the 1990s and particularly in the subsequent decade; yet already between 1978 and 1993, before those strides, China had a very high average annual growth rate of about 9 percent. ...much of the high growth in the first half of the 1980s and the associated dramatic decline in poverty happened largely because of internal factors, not globalization. These internal factors include an institutional change in the organization of agriculture, the sector where poverty was largely concentrated, and an egalitarian distribution of land-cultivation rights, which provided a floor on rural income-earning opportunities, and hence helped to alleviate poverty. Even in the period since the mid-1980s ... domestic public investment in education, agricultural research and development, and rural infrastructure has been a dominant factor in rural poverty reduction in China.”Ibid, p 17 [Emphases added]

Thus, right up to 2005 domestic investment and consumption, with state spending leading the way and great emphasis laid on agriculture and rural economy, played the major role in both poverty alleviation and GDP growth, the two – unlike in India – marching hand in hand at least to some extent. This, together with the decisive non-dependence on foreign capital, is an important lesson to be drawn from the Chinese experience.

Secondly, Beijing did concede many conditions or demands of the WTO and imperialist finance capital to integrate itself more and more closely with the global capitalist economy and to lure MNCs to relocate part of their manufacturing operations to China. But all this was done with a long-term vision of strong economic nationalism (whether this could be construed as part of building socialism is an entirely different debate) that stands in complete contrast to the blatantly comprador attitude of successive Indian governments. Often enough the present PM and FM speak and behave like agents/ apologists of imperialismThe rare doggedness with which Manmohan Singh got that charter of modern-day national slavery -- the Indo-US nuclear deal – passed in parliament after a long and tough battle and, more recently, batted for US corporations to dilute the liability of reactor suppliers in case of accidents, is well-known. He is no less grateful to the erstwhile colonial masters. Addressing a District Collector’s Conference in Delhi in May 2005, he declared that the British Empire was “an act of enterprise, adventure, creativity”. Speaking at Oxford the same year, he said the freedom struggle “did not deny the British claim to good governance”, but was merely a “natural” bid for “self-governance”. The profuse praise of British rule in India and the excessive zeal on the issue of Indo-US nuclear deal were only two of numerous instances indicating a patently snobbish attitude of the class he represents: the Indian big bourgeoisie. even as major appointments in the country’s financial establishment are made from WB/IMF stock (see box). The practical result of this difference is for everyone to see: the enormously superior economic, and therefore political, strength of China in the community of nations.

Third and most relevant in the current context is the prompt, flexible and independent (in relation to the constant flow of sermons and allegations from Washington) policy decisions the Chinese government has been taking in the national interest. In a way this was much more difficult for China than India because the degree of integration with the global (especially American – so much so that the two economies came to be described as “Chin-American”) capitalism was considerably higher.

Thus in 2008 Beijing launched an economic stimulus package worth $585 billion. But unlike the bailout packages for the greedy banks responsible for the crisis in America and Europe, here the stress was on vastly improving domestic infrastructure (which served to ease, to some extent, the unemployment caused by closure of export-oriented industries while laying a broader base for future development) and lowering the currency exchange rate (to make Chinese exports more competitive in a tight market, ignoring threats of retaliatory action from the US and EU). The result was apparently brilliant: facilitated by an easy credit policy, the growth rate rose from 6.6% in the first quarter of 2009 to 12.1% in the first quarter of 2010.

But soon the government noticed symptoms of overheating, such as consumer price inflation and a housing price bubble. It took steps like curbing bank credit, and investment expenditures by public sector corporations. But such measures had only short-term effects. Moreover, much of the newly built roads, bridges etc. were lying largely unutilised. The government then opted for a major change in policy framework: a shift of emphasis from investment to consumption. For this purpose various measures were taken, e.g., tighter control on property speculation, including the revival of a 20% capital gains tax. As a result the contribution of investment to China’s growth came down from over 50% to about 30%, with a corresponding rise in the contribution of consumer spending. The Chinese government has expressed its readiness to accept some reduction in the “quantity of growth” for the sake of “improving the quality and efficiency of growth”.

The new approach to growth is also conducive to reducing inequality. According to figures released by the Chinese government, inequality rose when growth was high and fell when it slowed. To quote from an article in the online edition of People’s Daily, “China’s first release of the Gini coefficient for the past decade demonstrated the government’s resolve to bridge the gap between the rich and the poor.” Although the Gini has been falling, at 0.474 it is still well above the red line of 0.4 set by the United Nations. Drawing attention to this fact, Ma Jiantang, director of the National Bureau of Statistics, said, “the statistics highlighted the urgency for our country to speed up income distribution reforms to narrow the wealth gap.”See C P Chandrasekhar, Is China Changing? (The Hindu, February 1, 2013) Meantime, foreign trade continued flourish better than most other countries: by the end of 2013 China surpassed the US as the world’s largest trading nation in merchandise.

All this does not make China, with its rampant corruption and many other vices, a model for India to emulate. But of course we can criticality assimilate certain aspects or features of the ever-changing Chinese economy in keeping with our own conditions and priorities. The foremost among these is an independent economic policy geared to the people’s interests, a policy based on the concerned state’s autonomy in relation to global finance capital.

Towards a Radical Left Alternative

Periodic crises, we learnt from our brief dialogue with Marx in Crisis of Neoliberalism and Challenges before Popular Movements (see second and third covers of the present pamphlet), are an integral, organic, necessary part of capitalist accumulation. So the only way to really get rid of crises is to get rid of capitalism itself, to move towards socialism. Yes, socialism sans all dogmatic presuppositions, socialism conceived as a system where all means of production are socially owned, where everyone enjoys equal rights and opportunities, while free all-round development of each is a condition for development of all.

Well, this is our long-term goal. But we cannot leap-frog to that height from the abysmal depths of human degradation (partly hidden though by the glitter of a superficial and distorted capitalist growth) that our country finds itself in. We have to first unfetter the productive forces, especially in agriculture which still employs more than 50% of Indians, so as to create the material conditions for building socialism as a higher, more efficient form of economic organisation; and at the same time achieve genuine, participatory, people’s democracy as distinct from the parliamentary farce we are now treated to. For that we need nothing short of a people’s democratic revolution with agrarian revolution as its axis. The primary aim of this democratic revolution will be to sweep away all feudal remnants, abolish imperialist domination, restrain and control big capital by effective taxation, nationalisation and other means, and democratise the entire apparatus and mechanism of governance. It will usher in the rule of workers, peasants, progressive sections of middle classes and intelligentsia – i.e., a people’s democratic state – which will take care not only of our economic problems but attend to a broad spectrum of organically interlinked tasks ranging from thorough democratisation of society and polity to progressive cultural transformation. Victorious democratic revolution will in this way build the material and cultural prerequisites for an uninterrupted socialist transition.For more, see General Programme of CPI (ML) adopted by its Ninth All India Congress in “Documents of CPI (ML): General Programme, Constitution”, Delhi 2013, pp 8-9 and p 12. The basic socio-economic programme which, we believe, can stand the Indian economy on a completely new, relatively prosperous and definitely much more egalitarian basis is outlined as follows: -- “Promotion of rapid self-reliant, sustainable and balanced economic development and eradication of mass poverty: ++ a. robust agrarian development based on thoroughgoing land reform and comprehensive state assistance to agriculture; ++ b. protection of agricultural land and nationalisation of all mineral resources and oil and gas; ++ c. comprehensive industrialisation making judicious use of the country’s natural and human resources; ++ d. promotion of small and medium enterprises, assisting them with institutional credit and marketing facilities, promotion of handicrafts and indigenous products, helping them organise into cooperatives; ++ e. meeting the country’s growing energy needs by self-reliant means, reducing dependence on external sources, avoiding dangerous options like nuclear energy and big dams, and promoting alternative and renewable means of energy generation; ++ f. transfer of the reins of national economy from the hands of the monopoly-multinational-mafia-landlord-kulak nexus to the state and various organisations of the people, confiscation of black money and illegal wealth held domestically or abroad; ++ g. creation of a powerful home market by developing the purchasing power of the common people, ensuring massive state procurement of agricultural produce and provision of basic goods and services for all; ++ h. vesting the working people with effective say in policy-making and production and stopping brain drain by creating adequate domestic opportunities for the highly skilled and promoting indigenous R&D; ++ i. re-ordering the present priorities and reorienting the existing policies to suit the needs of self-reliance, public welfare and a dignified life for the working people with a higher standard of living; ++ j. radically improving the condition of the working class by abolishing contractualisation of work, ensuring full trade union rights with secret ballot, protecting collective bargaining and right to strike, fixing and ensuring a living wage for all workers, ensuring social security measures for disabled and retired workers, strictly enforcing the policy of equal pay for equal work, abolishing child labour and effecting progressive reduction of working hour. /// -- “Ensuringa comprehensive public amenities and welfare: -- a. putting an end to privatisation and commercialisation of public amenities and ensuring universal right to food, right to free and quality education at all levels, right to work, right to free and quality health care, right to basic amenities like drinking water, housing and sanitation, public transport, and sports and recreation facilities; universal child care; care of the old, disabled and distressed; provision of adequate training and opportunities for all deprived and disadvantaged sections to ensure effective social justice; ++ b. preserving ecological and environmental equilibrium, taking preventive measures against epidemics and infectious diseases and putting in place effective programmes and systems to prevent, minimise and manage natural calamities and the disastrous impact of climate change; ++ c. discarding the dogma of ‘development’ through displacement, ensuring effective rehabilitation and resettlement of refugees of corporate-led ‘development’ strategy, and guaranteeing the traditional forest and livelihood rights of indigenous people and forest-dwellers.” (ibid, pp 18-20)

With this general orientation, we can now try and jot down some of the basic points of a People’s Alternative to the official policy frame.

1. Overcome foreign capital fetishism and rely instead on generation of domestic demand and capital formation, for such a course alone can augment inclusive – and therefore sustainable – economic development. The reason behind the government’s craving for more foreign capital inflow is to be located not just in the top policymakers’ personal inclinations, though that is not unimportant. At a deeper level, it is the essential logic of the growth trajectory chosen by the Indian state with full concurrence of the monopoly bourgeoisie, both of which betray a comprador mindset of the globalisation era. The overall experience of the last two decades confirm that the long-term ill effects of depending on enhanced inflow of foreign capital as a growth steroid far outweigh the temporary and superficial benefits. So it is high time India got rid of this drug-addiction-like-syndrome. The latest decision of further relaxing the cap on foreign investment in a whole range of sectors including insurance, public sector banks, commodity and stock exchanges etc. must be revoked.As for the Indian people’s response to the government’s policy of wooing big capital, the latest and one of the strongest signals came in July-August when Vedanta Aluminium’s controversial plan to mine the Niyamgiri hills for bauxite received a major jolt. Local tribal people unanimously rejected the proposal, claiming religious and cultural rights over the entire hills, in all 12 pallisabhas or village meetings held under an April 18 Supreme Court order in appeal against the project. This means the project will have to be abandoned, unless Vedanta and its chief sponsor P Chidambaram together find ways to circumvent the SC Order.

2. Let there be a development model that is people-centric and not geared to the interests of indigenous and foreign big capital. Reject the monetarist orthodoxy imposed by finance capital and the rating agencies. Stop arguing that all government spending must be indiscriminately reducedIncidentally, China plans to raise its budget deficit by 50 percent this year. China “needs to appropriately increase the fiscal deficit to maintain support for economic growth and restructuring,” the finance ministry said in a recent report. The government will ensure funding for key areas such as agriculture, education, medical and health care, social security, employment, government-subsidized housing and public culture, it said. for controlling inflation because (a) in the Indian context of capacity underutilisation and unemployment, higher spending in productive sectors leads to higher incomes and therefore higher revenues for the government and (b) much of the current inflation is of the cost-push kind rather than demand-pull type, which should be countered not by expenditure cutting but through steps like re-imposing controls on prices of petro-products and reducing various administered prices and charges. In other words, expand government spending on employment-generating schemes, genuine food security (not something like the electoral stunt of the Food Security Act), healthcare, education, technology and environment and so on. All this will not only improve our quality of life (and hence labour productivity too) but also stimulate the economy internally, without being dependent on external stimuli. To fund such public investment, move beyond the tokenism of one-time surcharge on the super rich and adopt measures like raising the tax-to-GDP ratio from the current low of about 17% by imposing higher taxes on big business and rich individuals, stopping or drastically reducing the bad practice called “revenue foregone” and the like.

3. Rather than imposing austerity on the working people, whose incomes stimulate demand and therefore the economy, curb the enormous wasteful expenditure on foreign trips, five-star living etc. of our ministers, MPs and top officials. As President of India Pratibha Singh Patil spent Rs. 206 crore on foreign tours (the highest ever), Rs.6 crore on a newly-fitted car, and after retirement, got a sprawling bungalow built for herself on military land in Pune. Again, as against Rs.47 crore budgeted for their tour expenses in 2011-12, Central ministers spent Rs.400 crore, compared to just Rs.56 crore in the previous year. The ruling politicians in our country have a special knack for innovating ways to fatten themselves on taxpayers’ money. When the penchant for jumbo ministries was sought to be curbed by statutory restrictions, leaders left outside the ministries began to be ‘adjusted’ as heads of newly floated paper corporations and in other lucrative positions. Such practices must be stopped. The ever-growing military budget and the huge expenditure on largely non-urgent space programmes must be curtailed to release funds for pro-people productive investments. And rather than fighting the CAG and the Supreme Court to save corrupt persons and practices, the government must take matching measures to punish the guilty and plug the loopholes in law and governance.

4. Stop behaving like a US agent and regional hegemon in South Asia, develop genuine friendship and closer economic relations with neighbours in particular and third world countries generally. Discard high-cost, high-risk atomic energy projects imposed on the nation by imperialist countries and the atomic energy lobby in India; stop handing over national resources to the likes of Mukesh Ambani and increase production/generation of energy in the public sector under effective workers’/public surveillance; ignore US pressure and access cheaper energy sources like Iran.

5. Scrap anti-farmer legislations like the SEZ Act and the new Land Acquisition Act, pass agricultural land protection legislation to stop the agony of eviction ‘for development’, introduce effective land reform measures and urban land ceiling Acts – to name a few measures that will promote inclusive development. Public investment in agriculture (irrigation, storage and marketing infrastructure etc) and allied sectors like poultry, dairy and pisciculture must be enhanced several times to strengthen the base of the Indian economy and ensure affordable healthy diet for all Indians.

6. Adopt a time-bound phased programme of regularising casual/contractual labourers, starting with those employed in government/semi-government undertakings, such as construction workers, honorarium-based workers in the social sectors, and so on. Such measures will go a long way in boosting the home market and thereby countering stagflation.

An alternative economic programme, incorporating but certainly not limited to the above proposals, needs to be formulated through open, broad consultations, widely propagated and fought for. While uniting with progressive and democratic forces in this struggle, the Left should try and leave its imprint on the democratic movement by consistently connecting every single issue of immediate concern to the broader, higher agenda of comprehensive social transformation. Take one instance – the issue of corruption.

In the foregoing pages we saw that with a distinct role reversal of the state from a regulator of private investment to its servile facilitator, with the rise of corporations too big to control, and the accelerated influx of predatory finance capital, we now have in place a new model of almost legalised, institutionalised corruption. Even there are instances where government officials and ministers collude with private interests to economically undermine PSUs, so that private players can expand their market share at the cost of the latter. The example of BSNL readily comes to mind – a case comparable to the KG basin gas reserve, which was discovered by ONGC with public money and then transferred to RIL for private plunder of these invaluable public resources.

In a situation like this, where political and corporate corruption feed on each other, the gang of four – neoliberalism, corporate plunder, cronyism and corruption – must be fought together, because they exploit and oppress us together. In other words, fighting corruption is not merely a matter of good governance and punishing guilty individuals. More important, it is about relentless struggle for basic course correction in policy, for a paradigm shift in the very orientation and mechanism of development and governance, with people’s economic and political empowerment at its core. We must therefore put forward concrete demands like protection of agricultural, forest and coastal land, and comprehensive rights of gram sabhas over these; confiscation of black money and illicit wealth; and nationalisation of mineral resources, extraction of which have proved to be the main breeding grounds of corruption and corporate plunder.

Then again, the movement should be directed not only against mega scams and macro issues, but equally against the all-pervasive everyday corruption at the micro level, such as in PDS, municipal and panchayat affairs, various schemes like the NREGA, and so on. This is crucial for building up the struggle from the grassroots, for involving the broad masses in this movement on the basis of their lived experience. Equally important, this must not remain a single issue struggle but advance as part of a broader movement informed by a vision of comprehensive change.

To conclude, the economic crisis is, and increasingly will be, leading to all kinds of social and political turbulence. Disillusionment, frustration and anger are developing among all but the most privileged. This is the time to push for an alternative development discourse. The Left must, rather than merely criticising the governments and ruling parties for the economic mess they have created, make full use of the situation for this purpose. The ongoing struggle for economic justice and thoroughgoing democracy must be led to its consummation.