Preparing Ground for Intensifying

Imperialist Penetration and Attacks

on People

Effects do not correlate with obvious causes in ‘comprador economics’ (and such a branch indeed needs to be instituted). While the clear-cut, ruinous effects of pro-imperialist policies in the name of globalisation are dominating economic indicators, with no logic whatsoever these very suicidal policies are being reiterated in the name of “economics.” Its logic is strange indeed. If the performance is good which is very rare, the policies must be pursued vigorously, and if the results are bad which is usually the case, the policies must be pursued even more vigorously. A low GDP, a high debt servicing, falling agricultural production in a primarily agrarian country, falling public investment in agriculture (90% of which used to go towards irrigation projects) while there is poor rainfall, lowering state investment in education in a country which can easily absorb trained manpower- all this is sought to be answered by selling off public assets, that too at throwaway prices; further dismantling of productive ability of the country whether in agriculture or industry; opening the doors wider for imperialist goods, and similar steps. Actually, had the Economic Survey 2001 confined itself to documentation- surveying- it would have been a good mirror for the disastrous effects of the anti-people, pro-imperialist policies. By propounding solutions to further intensify the same policies, the Survey only reduces its ‘economic’ credentials to a farce. Can it be the logic of any rational ‘economics’ that the best way to run a country is to ruin it?

Growth in GDP, Agirucltural and Industrial Production (In Percent)

                                              97-98               98-99       99-00          00-01

GDP Growth              4.8                  6.6             6.4            6.0

Agricultural Production  -6.1                  7.7            -0.7            -3.5

Industrial Production    6.7                  4.1             6.5             5.7

The prescriptions of Economic Survey 2000-2001 are :

(a) a drastic cut in subsidies

(b) hastening dereservation of small scale industry (which is of course intended to kill it)

(c) privatization of public sector undertakings

(d) bringing down import duties to ‘Asian levels’

(e) amendment to labour laws, chiefly to give freedom for ‘hire and fire’

(f) repeal of land ceiling laws at state levels

(g) treating education as a commercial service

(h) opening up processed agri-based foods sector

(i) removing price controls on petroleum products, coal and sugar

(j) stopping protection to SSI in garments, agricultural implements and bicycles and similar other suggestions.

But what are the indicators- and thus the signals- being given out by the Indian economy? There has been official hullaboo of 42 ‘major economic reform initiatives’ i.e. they have implemented their much touted globalization measures. The result is that against a GDP growth of 6.6% in 1998-99, 6.4% in 99-00, the GDP has a projected slide to 6% for the year 2000-2001. There has been an agricultural decline with a negative growth rate of -3.7% projected against last year’s -0.7%. An industrial slowdown is also on- all these are the official statistics shown above. Per capita income has fallen. The gross fiscal deficit is 10% of the GDP and the year 1999-2000 had a central fiscal deficit of 5.5% which is a rise above the previous figure. All this is linked to the increasing share of debt service in the expenditure budget, so how would it fall anyhow, when more and more indebtedness to imperialism is the order of the day? Interest payments have risen to 4.7% in 1999-2000 (against 3.8% of GDP in 1990-91 when the ‘reforms’ began). Since this is another expenditure bound to rise, it follows logically that in this mindset the expenditures to be cut are on welfare and necessary subsidies, since anyway compradors do not think of improving production and bolstering the GDP.

In the foodgrain sector, after talking about 45 million tonnes of foodgrain stock, the Survey informs that grain output will fall by 10 million tonnes in 2000-2001. It estimates a production of only 199 million tonnes (i.e., fall of 4.7%). The reason cited makes it all the worse- deficient rainfall in 71 districts for the second consecutive year. Thus the Economic Survey makes the second prediction of severe water shortage in the country this summer. Oilseed production is also slated to fall. Besides, public expenditure in agriculture is mostly being used to facilitate current expenditure rather than create infrastructure. In 1993-94, 1/3^rd of the allocation was used for this purpose, in 1999-2000 it declined to 25% despite rise in overall allocation.

Wholesale price index measurements show inflation crossing the eight percent mark in January 2001. The Survey links this to interest rates on PF and warns that administered interest rates on PF and pension remain ‘invariant’ with inflation because of ‘high real interest on govt. debt.”

Despite all the willingness of the rulers, the Survey sadly notes that “sentiment for new investment” (from MNCs no doubt) has not improved due to sluggish growth of industry in India compounded by a ‘perceived downturn in American economy’. Hence it is back to sell the PSUs, deflab the govt. and invite foreign capital to boost forex reserves.