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PFRDA BILL: EMPLOYEES, TEACHERS HOLD CONVENTION: ‘WITHDRAW PFRDA BILL OR FACE INDUSTRIAL ACTIONS’

K K N Kutty

SEVERAL organisations of central and state government employees, as school, college and university teachers, and pensioners have come together to press for the urgent demands of the sections they represent and, as a part of this process, they organised a national convention at New Delhi on July 22. These organisations, represented through their delegates at the convention, included the All India State Government Employees Federation (AISGEF), Confederation of Central Government Employees and Workers (CONFDN), All India Railwaymen’s Federation (AIRF), All India Federation of University & College Teachers Organisations (AIFUCTO), BSNL Employees Union (BSNLEU), School Teachers Federation of India (STFI), All India Defence Employees Federation (AIDEF) and Bharat Central Pensioners Confederation (BCPC).

STRIKE ON ANVIL

AISGEF’s senior vice president Sukomal Sen presented the declaration for consideration by the house; CONFDN president S K Vyas supported it. A presidium consisting of R G Karnik (AISGEF), S K Vyas (CONFDN), N Narayana (STFI), P R Menon (AIRF), Sardara Singh (AIDEF) and V A N Namboodiri (BSNLEU) conducted the proceedings of the convention. Besides the leaders of the participating organisations, those who addressed the convention included Basudeb Acharia, Tapan Sen (general secretary, Centre of Indian Trade Unions), M K Pandhe (senior vice president, CITU), Bhatnagar (All India Insurance Employees Association) and Pradeep Biswas (Bank Employees Federation of India).

More than 700 delegates representing various organisations participated in the convention. The declaration adopted unanimously by the convention urged upon the central government and state government employees as well as the teaching community to participate in a series of programmes, culminating in a strike, to compel the government to withdraw the Pension Fund Regulation and Development Authority (PFRDA) Bill. On this issue, these organisations will submit a memorandum to the prime minister, signed by a million people and detailing the reasons as to why the bill needs tot be withdrawn. After a series of state level conventions, these organisations will hold a huge rally in front of the parliament, and rallies in front of the respective Raj Bhawans, between August 1 and September 6, 2011 when the parliament is expected to be in session.

The convention set up a steering committee, consisting of leaders of the participating organisations, to spearhead the movement. This will meet in the first week of August to decide upon the date of the proposed strike.

Taking serious note of re-introduction of PFRDA Bill in the last session of parliament, the national convention’s declaration said this is a most dangerous conspiracy dictated by the IMF and World Bank which would demolish the social security to the employees and workers in their old age and would work only to fatten the private profit at the cost of savings of employees and contributions from the national exchequer.

The convention noted that the neo-liberal globalisation has been aimed to advance the interest of global capital at the cost of a majority of the world’s population who are faced with falling incomes, greater social and economic insecurity and greater restriction on the democratic rights. India adopted the neo-liberal economic policies in 1991, since when our economy underwent a thorough restructuring to advance free trade, unrestricted foreign investment, deregulated market, unhindered foray of finance capital, privatisation of public enterprises, changing work structure, free say for entrepreneurs in the matter of employment, gradual reduction of all welfare measure, annulling of labour welfare measures, withdrawal from all social security measures, privatisation of pension funds etc. But resentment over these policies, especially from the working people, has also grown and the Indian working class has assiduously built up united resistance against these policies. Virtually total unity of the Indian working class was brought about on September 7, 2010, when they organised a one-day general strike and later on February 23, 2011 when half a million people staged a rally in front of the parliament. But insensitive to the growing pauperisation of the working people and emboldened by its electoral victory, the UPA-2 government has continued unabated its pursuit of the pernicious policies and introduced various bills in the last session of parliament, including the resurrection of the PFRDA bill, to marshal the pension fund for maximising private profit.

PERNICIOUS PFRDA BILL

An important point the convention notes is that the Supreme Court of the country proclaimed as an enforceable right the concept of defined and adequate pension as deferred wage, capable of providing socio-economic justice to the employees after their retirement, but now this concept stands dismantled. For, under the new dispensation, pension would be fluctuating and not defined, or it may even be a vanishing phenomenon depending upon the vagaries of stock market. The terms of reference for the study group set up by Sixth Central Pay Commission (CPC) to go into the pension structure amply indicates a future migration even of the existing employees to the new contributory pension regime.

The wage structure of government employees has been designed on the premise that it is to be depressed in order to enable the government to meet the pension liability in future. A corollary flowing from this fact is this that the pension liability as a deferred wage is inherent in the existing wage structure. Therefore, the imposition of the new, contributory pension scheme on the employees who have entered service on or after a cut-off date is illegal because it would deny them their deferred wage as pension which was to be earned by them on account of a depressed wage structure. They are now being compelled to contribute in order to earn an undefined and uncertain annuity.

The pension fund created by the employees’ subscription and the employers’ contribution which directly flows from the exchequer (which is nothing but tax revenue of the government) is thus to be made available for the stock market operations. This is not only unethical but also a blatant diversion of public fund for private profit to foreign as well as Indian capitalists.

It is feared that, if enacted into a law, the PFRDA Bill will empower the government to alter or even deny the existing employees and pensioners the statutory defined pension benefit, as is to be done in the case of those who are appointed after the cut-off date.

It is stated that the prime objective of the introduction of a contributory pension scheme is to substantially reduce the outflow on account of pension liability. The major pension liability of the government is accounted for by the armed defence personnel. They and the paramilitary forces are, however, excluded from the purview of the contributory pension scheme, and rightly so. Thus the government is bound to meet their pension liability from the Consolidated Fund of India.

FALLACIOUS RATIONALE

The study commissioned by the Sixth CPC has found as unsustainable the government’s argument about covering the civil servants in the ambit of the new pension scheme. In a report, S Chidambaram, actuary, has pointed out that over a period of 34 years (2004-38) the government’s liability on account of the contributory pension scheme would in fact increase from the existing Rs 14,284 crore to Rs 57,088 crore and is likely to taper off only from 2038 onwards. The exchequer is bound to have an increased outflow for the next 34 years and will be called upon to bear the actual pension liability of the defence personnel and the personnel of paramilitary forces, besides making the contribution to the pension fund of the civil servants recruited after the cut-off date. The specious plea that the exchequer is bound to gain due to the contributory pension scheme is thus not borne by facts.

Since most of the state governments have chosen to switch over to the contributory pension scheme, their pension liability too is bound to increase three times by 2038.

The first version of the PFRDA Bill was placed before the parliament by the NDA government in 2003. The Sixth CPC set up in 2006 a committee to go into the financial implications of the increasing number of pensioners and suggest alternative funding methodology. In its report submitted in 2007, the committee came to the conclusion that “the existing systems of pension are increasingly becoming complicated after the introduction of the new pension scheme” and warned that “caution has to be exercised in initiating any further reforms.” In the light of this conclusion, the rationale of the reintroduction of PFRDA Bill in 2011 is fallacious. When enacted into a law, the bill will make the existing pensioners’ future financially insecure and put them at the mercy of the stock market’s vagaries.

This is the reason the said organisations are opposing the new pension scheme and PFRDA Bill, and are demanding that the defined pension benefit must be extended to all the government employees, whether regularly appointed or not.

The national convention urged upon all organisations of central and state government employees and teachers to unite and organise a signature campaign on a petition to be submitted to the prime minister. In case the PFRDA Bill is not withdrawn and government employees are not brought under the statutory pension scheme, it would be imperative for employees and teachers to organise industrial actions including a strike.

Courtesy: People’s Democracy

C P CHANDRASEKHAR WRITES ON: MORE EVIDENCE OF JOBLESS GROWTH

IT is a feature that sullies a pretty picture. Growth in post-reform India accelerates, but fails to deliver adequate jobs for its citizens. As is widely acknowledged, the large sample surveys of employment by the National Sample Survey Organisation (NSSO) undertaken once in five years provide the most exhaustive data on employment trends and conditions in India. The NSSO has just released the leading indicators yielded by the latest such survey on this subject – the 66^th Round, covering 2009-10. This helps to assess the impact on employment of growth during the reform years, and especially after 2003-04 when GDP growth accelerated to touch 8-9 per cent.

DECLINING EMPLOYMENT

The results suggest that while the deceleration of employment growth recorded during 1993-94 to 1999-2000 had been partially reversed in the period 1999-2000 to 2004-05, the record over the five years after 2004-05 is even worse than it was during the 1990s. To summarise, the rate of growth of employment (on a usual, principal and subsidiary, status basis), which rose from 1.07 and 2.62 per cent in rural and urban areas respectively during 1983 to 1987-88, to 2.55 and 4.08 per cent during 1987-88 to 1993-94, fell to 0.80 and 2.73 per cent during 1993-94 to 1999-2000. The scepticism about the dynamism unleashed by reform that this generated was dismissed once the results of the 2004-05 survey were announced that showed that rural employment growth had actually risen to 2.41 per cent in rural areas and 4.22 per cent in urban areas over 1999-2000 to 2004-05. Based on the results of the 2004-05 survey, some like the chairman of the Prime Minister’s Economic Advisory Council C Rangarajan argued that “with a sustained growth of 9 per cent per annum by 2012, unemployment will be totally eliminated.” The challenge was to achieve and sustain high growth rather than to generate employment, since “accelerating growth is central to expanding employment opportunities” (Times of India, March 15, 2006).

Since then, India seems to have managed to achieve and sustain high growth, except for the brief downturn during the global crisis. Yet the recently released results from the 2009-10 (66^th Round) NSSO survey are disconcerting. Over the five-year period 2004-05 to 2009-10 employment declined at an annual rate of -0.34 per cent in rural areas, and rose at the rate of just 1.36 per cent in urban area. In the aggregate, the volume of principal and subsidiary status employment rose by a negligible 0.1 per cent.

However, government spokespersons have been quick to play down the significance of these numbers by referring to two other aspects of the NSS 2009-10 figures. The first is the fact that part of the deceleration in workforce expansion is the result of the substantially larger number of young people opting to educate themselves.

If we focus on the 15-24 age group, which is the one that is most likely to choose between education and work, we find that a the increase in the number of those reporting themselves as occupied with obtaining an education was much higher over the five years ending 2009-10 (16.7 million in the case of males and 11.9 million in the case of females) than was true over the previous five years (5.6 and 5.2 million respectively). This huge difference, which is a positive development from the point of view of generating a better and more skilled workforce, would have substantially reduced the number entering the labour force, contributing to the deceleration in the growth of the total number of workers.

However, the aggregate numbers of principal and subsidiary status workers suggest that this alone would be inadequate to provide a satisfactory explanation of what seems to be a dramatic collapse of employment. The total number of usual status (principal and subsidiary) workers, which increased by 60 million during the five years ending 2004-05, rose by just 2.3 million over the subsequent five years. (If we restrict the comparison to just changes in principal status workers the difference is still substantial though less dramatic, standing at 48.3 and 13.1 million respectively).

This too has been discounted by pointing to the fact that the fall in employment increments over the two periods under comparison has been substantially due to a fall in female employment. Rural female employment, which rose by 18.3 million between 1999-2000 and 2004-05, registered a decline of 19.2 million during 2004-05 and 2009-10. Even in the urban areas, the figures for changes in female employment during the two periods were significantly different at a positive 6.4 million and a negative 1.7 million respectively. This has been cited as evidence of a definite underestimation of female employment.

The figures have provided the basis for the criticism from within the government that the NSSO’s 2009-10 survey has significantly underestimated female employment, which is difficult to capture, especially in rural areas. On the other hand, it cannot be argued that this difficulty affected only the 2009-10 survey, especially to the extent needed to explain the dramatic differences noted above.

Moreover, if we stick to usual status (principal and subsidiary status) employment, the change in male employment also points to significant deceleration. Between 1999-2000 and 2004-05 male employment increased by 20.2 million in rural areas, while between 2004-05 and 2009-10 it rose by only 13.4 million. The corresponding figures for the urban areas were 15 million and 9.8 million respectively. In the case of only principal status workers, the increases had fallen from 19.2 to 13.6 million in rural areas and from 14.4 to 10.3 million in urban areas.

As mentioned earlier, this decline in employment is partly explained by the sharp increase in those pursuing an education in the 15-24 age group. We, therefore, turn to a separate examination of the trends in employment in the two main working age groups: 15-24 and 25-59. Let us initially restrict the analysis to trends in usual principal status employment for males, to accommodate for what may be the partially correct criticism that female employment was underestimated to a greater degree in 2009-10 than before.

One positive signal here is that male employment in the 25-59 age group rose when that in the (education-opting) 15 to 24 age group fell. Male employment (rural and urban) in the 15-24 age group fell by 6.2 million between 2004-05 and 2009-10 as compared to an increase of 6.5 million during 1999-2000 and 2004-05. Contrary to this, the figures for the changes in the 25-59 age group were 28.8 and 26.2 million respectively. That is, there was a larger absolute increase in 25-59 age group employment in the more recent period when compared with the previous one. However, the difference here too is small and the rate is marginally lower (13.3 as opposed to 13.8 per cent) given the rising base value.

In the case of females, however, even in this age group employment fell during the recent period by 5.1 million, while it had increased by a huge 13.1 million during the previous period. Thus, even if we restrict ourselves to the most favourable category in aggregate principal status employment in the case of males, which is the 25-59 age group, the most we can say is that employment growth has not been lower during the five years ending 2009-10, as compared to the previous period. This is despite the fact that these were the years when there was a substantial acceleration of GDP growth from the 6-7 per cent range to the 8-9 per cent range between these two periods.

There seems to be a second positive that emerges on first examination of the data relating to male, 25-59 age group employment, which is that much of the increase in employment is paid employment as opposed to self-employment. This points to a structural shift in employment generation since most of the additional male employment generated in this age group during the 1999-2000 to 2004-05 period was in the self-employment category.

Self-employment rose by 21.8 million during that period, as compared with just 4 million during the more recent period. On the other hand, during 2004-05 to 2009-10, paid (regular or casual) employment increased by 24.6 million, as compared with just 4.4 million during the previous period. Given the fact that self-employment could be substantially distress-driven, this is indeed welcome.

INCREASING INEQUALITY

But that assessment needs to be moderated on three counts. First, the structural shift in the nature of additional employment occurs in a period when aggregate employment even among 25-59 years-old males has not been rising any faster. Second, around two-thirds of the increase in paid employment in the recent period is in the casual work category, which is likely to be less well-paid and volatile, leading to much lower earnings. Third, if we consider female employment in the 25 to 59 age group, while there has been a decline of 7.7 million in the number of self-employed workers, the number of paid workers rose by just 2.6 million. The increase in paid employment here has been far short of the loss of self-employment.

These features have to be seen in the context of certain changes observed in the sectoral composition of the expansion of employment during the two periods. The figures show that over 1999-2000 to 2004-05, the increase in employment was distributed across agriculture, manufacturing, construction and services, though services and construction dominated in the case of males and agriculture in the case of rural females. As compared to this, during the 2004-05 to 2009-10 period, agriculture and manufacturing made negative or negligible contributions to the increase in employment, whereas construction played the dominant role in the case of both males and females. Clearly even the small contributions made by the commodity producing sectors to employment increases are disappearing, making the system dependent on construction and services, especially the former.

In sum, even among sections of the population who would not and have not been opting for education as activity and for whom the identification of work participation may not be difficult, the main source of employment during the high growth years seems to be casual work in the construction sector. This is likely to be among the more volatile among employment categories, with lower wages, higher uncertainty of employment and, therefore, limited earnings potential. So even if we take account of the increased participation of the young in education and the possible underestimation of the employment of women, the evidence seems to point to unsatisfactory labour market outcomes in the period when India transited to its much-celebrated high-growth trajectory.

All this is significant for at least two reasons. The first is that it indicates that the pattern of growth that India is experiencing is woefully inadequate to provide incomes and livelihoods and the dignity that comes from work to a substantial number of those seeking it. It seems to be time to shift from an obsessive and single-minded devotion to growth and focus more on employment. The second is that the picture of near-jobless growth changes the whole notion of “inclusiveness”. If the trajectory continues, India’s poor and marginalised would have to be “included” not by integrating them into the development process through employment, but through special programmes that reek of state patronage and are dependent on government prerogative. The right to a decent life is not ensured but merely assured.

The implications of this scenario where increments in GDP are not accompanied by anywhere-near-adequate increments in employment are many. One is that the growth process India is experiencing is such that the new activities that displace old and traditional ones deliver much fewer new jobs relative to the number they displace. The second is that in a whole set of new activities that are “additional” to what existed before, “value creation” is far less dependent on leveraging “work” and based more on intangible notions of meeting felt needs and offering quality. The corollary is that the value created goes less to finance an expanding wage bill and more to enhancing surplus incomes in the form of profit, rent and interest. Not surprisingly, there are clear signs of an increase in inequality and a worsening of income distribution in recent years.

Thus, the evidence points to the need to have a close look at the growth strategy and make corrections to ensure higher employment growth. This would require measures to rebalance demand, change the composition of output and alter technology choice to ensure a higher rate of growth of employment. Even if this involves some trade off between GDP growth and employment growth at the margin, a case can be made in its favour. Unfortunately, the government seems disinclined to move in this direction. Rather, senior government economists have chosen to launch an attack on the NSSO, which has a much-deserved reputation and an excellent track record, for what they perceive to be shoddy statistical work. The presumption is that these officials in high places knew the numbers even before they were collected. That may sound absurd, but it only reflects the new ethos: when faced with evidence that calls for a policy rethink, the tendency is to trash the evidence (or to manipulate it) and pretend the problem does not exist.

Courtesy: People’s Democracy

SAYING NO TO IRANIAN OIL TO PLEASE AMERICA

Prakash Karat

“An assessment of whether India is fully and actively participating in United States and international efforts to dissuade, isolate, and, if necessary, sanction and contain Iran for its efforts to acquire weapons of mass destruction, including a nuclear weapons capability (including the capability to enrich uranium or reprocess nuclear fuel), and the means to deliver weapons of mass destruction, including a description of the specific measures that India has taken in this regard”

(Section 104g(2)E(i) of the Henry Hyde Act of 2006 regarding the Annual Implementation & Compliance Report to be submitted by the US president to the congress)

India has been getting 12 per cent of its crude oil imports from Iran. This amounts to around 400,000 barrels per day. These supplies may stop in August since India has not made payments for oil shipments for the past few months and around $ 5 billion are due to the Iranian oil companies.

Iran has indicated that it may be forced to stop supplying oil if no arrangements for the payments are made. How has such a situation come about? The Indian government has succumbed to US pressures to curtail its trading and commercial links with Iran. In July 2010, the United States imposed wide ranging sanctions against Iran aimed at scuttling its oil and gas industries. These sanctions went much beyond the June 2010 UN Security Council sanctions which were adopted through Resolution 1929. The United States along with the European Union has placed prohibitive restrictions on banking and foreign exchange transactions with Iranian banks and financial institutions.

SUCCUMBING TO US PRESSURE

India is abiding by the illegal and unilateral sanctions imposed by the US and the European Union and not just the UN Security Council sanctions. Under pressure of these sanctions, the Reserve Bank of India in December 2010 disallowed all trade related payments with Iran through the Asian Clearing Union (ACU). This mechanism was being used for a long time to make payments to Iran. Once this was stopped, the problem arose of how to make the payments. Subsequently, the Iranian and Indian governments agreed that payments for the oil imports can be made through an account with the German Central Bank, the Bundesbank. The Bundesbank would transfer the money to the European-Iranian Trade Bank (EIH) based in Hamburg. This bank was not subject to sanctions.

However, after a few weeks under pressure from the United States and Israel, the German government stopped these transactions. Since then, the Iranians have continued to supply oil but India has not made payments.

Iran has been the second largest supplier of crude oil to India after Saudi Arabia. The UPA government is now engaged in finding out how to arrange for alternative sources of oil imports rather than ensuring that oil trade with Iran continues. The United States is asking India to source its oil imports from Saudi Arabia as against Iran.

HYDE ACT DIKTAT

Ever since the Indo-US nuclear deal, the traditional relations with Iran have been endangered. The United States had made it clear that the nuclear deal entails acceptance of India making its foreign policy congruent to that of the United States. Further the Hyde Act which allowed nuclear cooperation with India clearly states that the president of the United States should annually provide an assessment report to the US congress on how India is cooperating with the United States to sanction and isolate Iran. The Left parties had strongly opposed this infringement of national sovereignty and the abridgement of India’s foreign policy to suit US interests.

Within weeks of the Indo-US joint statement signed by President Bush and Prime Minister Manmohan Singh in July 2005, India voted for a resolution against Iran in the IAEA in September while the Non-Aligned group of countries either voted against or abstained. This vote against Iran was repeated in February 2006. These facts were appreciatively mentioned by the US government when the Hyde Act was discussed in the US Congress.

GAS PIPELINE SCUTTLED

The next target was the Iran-Pakistan-India gas pipeline. India was warned publicly many times by America not to proceed with the gas pipeline project with Iran. India has complied though it still formally does not admit to having abandoned the project. After waiting for more than two years, Iran and Pakistan decided to go ahead with the project. Iran is now laying the pipeline upto the Pakistan border. India decided to go for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project at the behest of the United States. The earlier 25-year agreement to buy liquefied natural gas from Iran fell through after India voted in the IAEA. Step by step, the Indian commercial projects in Iran are being abandoned. Reliance has stopped gasoline exports to Iran worth $ 280 million due to the US threat.

Finally, the major component of trade with Iran which is the oil imports is now on the verge of being scuttled.

APPEAL TO US

Incidentally, a curious news report appeared during the visit of the US secretary of state, Hillary Clinton to India, last week. A US official accompanying Clinton during her stay in Chennai was quoted as saying that a solution to the seven month long payments issue between India and Iran on the crude oil imports “is in sight”. He said that the US treasury is working with Indian officials on the issue. This reveals that India has approached Big Brother to find a way out. The responsibility for sabotaging oil supplies from Iran lies with the United States. Oil supply as such has not been brought under any sanctions whatsoever. Yet India, instead of standing up to such illegal measures is beseeching the US for permission to import oil from Iran.

The import of oil and gas from Iran which is beneficial for India is being sacrificed at the altar of the United States’ goal to isolate Iran and to establish its hegemony over West Asia. It is shocking that the Indian government goes along with the United States’ project which is against its own national interests while close allies of the United States like Japan and South Korea continue to import oil from Iran and have worked out arrangements to make payments despite the US and EU sanctions. Turkey is another country in the Nato which has entered into new contracts in the oil sector with Iran. China has stepped up its oil imports from Iran. Its imports in June registered an increase of 53.2 per cent year on year.

BOUND BY NUCLEAR DEAL

Bound by the iron fetters of the nuclear deal, which is the centre-piece of the strategic alliance with the United States, the Manmohan Singh government is doing everything to ensure that as per the Hyde Act adopted by the US congress, India is seen to be fully cooperating with the US to isolate and sanction Iran for developing nuclear technology that includes “the capability to enrich uranium or reprocess nuclear fuel”. As per the Hyde Act, the US president has to give his annual certification to the US congress that “India is fully and actively participating in United States and international efforts to dissuade, isolate and if necessary, sanction and contain Iran”.

India can get its crude oil requirements from other countries. But what cannot be retrieved by this craven and servile attitude to the United States is the country’s self respect and damage to national interests.

Courtesy: People’s Democracy

TWENTY YEARS OF REFORMS: SHUN NEO-LIBERAL TRAJECTORY

EDITORIAL

THE tenacity of the cheer leaders of neo-liberalism is simply amazing. They simply refuse to learn from their own experiences. Using the occasion of the 20^th anniversary of the then finance minister Dr Manmohan Singh’s presentation of his first budget (July 24, 1991), they are now clamouring for further reforms particularly financial liberalisation. They seem to forget, in fact deliberately ignore, the fact that but for the Left parties which prevented UPA-I government from going ahead with such reforms like, privatisation of pension funds; increasing the FDI cap in the insurance sector; banking reforms permitting greater role for foreign banks and the full convertibility of the rupee; India would have been severely devastated by the global financial crisis and recession.

Returning to the much-celebrated budget speech, it should be realised that it alone was not the harbinger of the neo-liberal economic policy trajectory. The Indian rupee was devalued twice on the very eve of this budget. Rajiv Gandhi’s call to take India into the 21^st century led to a huge profligacy in imports which, in the main, resulted in the foreign exchange reserve crisis, the pretext for ushering in reforms. This is testified by the fact that in the four years from 1985 to 1989, the over 350 Indian corporates earmarked for export promotion had registered a net loss of Rs 5,751 crores of foreign exchange. This quantum jump in imports led to a sharp rise in India’s foreign borrowing. Between 1984 and 1991, our foreign debt rose from Rs 28,000 crore to Rs 1,00,425 crore.

Two decades later, in complete contrast to this euphoria, one thing is certain. We have succeeded in creating two Indias. If the quality of life of everybody had substantially improved, then growing income inequalities would be seen as an index of relative poverty and not absolute poverty. However, given the widespread agrarian distress, the suicides by our farmers, drastic reduction in the per capita availability of foodgrains and pulses – all go to show the rise of absolute poverty among certain sections of our people. The luminosity of `shining India’ is, therefore, directly proportional with the depravation of `suffering India’.

The liberalisation pundits must note that the IMF, the international agent of neo-liberalism, had conducted a study in 2010 ironically titled, “India is the rising tide lifting all boats”. This paper measures the universally accepted index of income inequality – the gini coefficient. It shows that this has risen from 0.303 to 0.325 for the country as a whole in the first decade of the 21^st century. In the urban areas, the situation is much worse with the gini coefficient rising from 0.343 to 0.378. There cannot be a greater indictment than this which demonstrates the growing hiatus between the two Indias.

While Dr Manmohan Singh continues to be hailed, unfortunately, due credit is seldom given to the then prime minister, P V Narasimha Rao who chose the finance minister in the first place. In fact, as his government entered its last year, P V Narasimha Rao, in a candid admission, said that the reform process does not guarantee to the people basic `rights to food, work, shelter, education, health and information through national determination’. Speaking at the World Summit for Social Development in Copenhagen in March 1995, he said: “Today, the world stands at the cross-roads of history even as it struggles to free itself from the attitudes of the Cold War era. We are at the cross-roads because we know that certain paradigms of development which placed the State alone at the centre did not succeed. There is now a swing to the other side, namely the tendency to put an untrammelled Market alone at the centre. While the new enthusiasm sweeps over the countries, one cannot help the uneasy feeling that what is needed really is a certain Market Plus; otherwise, the poor and the weak are likely to suffer exclusion due to the imperfections of the Market. The inadequacy in both these approaches stems from the failure to place the people at the centre. This centrality of the people is extremely important. We have to empower the people themselves as the central strategy to social and economic development to sustain human progress.”

Further, the then PM says with reference to India, “The core issues of poverty eradication and social integration cannot be addressed credibly without adequate resources, non-discriminatory access to markets and the availability of technologies that are relevant to these core issues. At the national level, countries have to commit the resources required to realise the rights for the poor in terms of institution building, formulation of policies, designing of strategies and above all, mechanisms of monitoring and evaluation that make implementation sustainable. The rights I have just mentioned are fundamental to development in its broadest sense. They act as a corrective to the distortions of the State and the Market severally and also complement the efforts and achievements of both. It is this harmony that we would seek to develop in the context of the reforms that we have embarked upon presently in our own country, as a means to our goal of eradication of poverty.”

Is it possible to achieve such economic and social empowerment of the people under the neo-liberal dispensation? The elusive objective of `inclusive growth’ can only be achieved if there is a radical departure from such a trajectory. It is precisely this that P V Narasimha Rao refused to accept thereby confirming that such concerns were mere platitudes, to mislead the people, on the eve of the 1996 general elections.

However, if such objectives need to be achieved, then this requires a new set of reforms which will provide food security, health and education for our people. It also requires the need to protect our people from increased dispossession, like it has happened with the process of land acquisition all across the country. One of the hallmarks of neo-liberalism is the prising open of newer avenues for capital accumulation. One such is the acquisition of land from the farmers at throwaway prices for super profits. Such “accumulation by dispossession”, as an American intellectual defines, is nothing new in the history of capitalist development. Recollect that, during the 19^th century industrial revolution, over 50 million of such dispossessed people from Europe moved to the then `free world’ (USA, Australia etc). Today’s dispossessed have no such avenues and are thus condemned to misery. The Left has been seeking a new land acquisition law to replace the anachronistic 1894 law that is today in force. This law must ensure that apart from adequate compensation and future employment, that the former owners also have a share in the rise in the value of the land post acquisition. Further, these people must be protected by law to defend themselves against land and real estate mafias that would force them to part land at throwaway prices.

The constant refrain by the government, however, is that we have insufficient resources to implement a comprehensive food security legislation or to realise in practice the Right to Education law. This sounds not only absurd but is a patent falsification given the mega scams that this very neo-liberal trajectory has facilitated. There is no dearth of resources in our country. There is a dearth of political will to take on the corrupt politician-bureaucrat-businessmen-corporate media nexus that is looting these resources.

Instead of focusing on such reforms, that will go to some extent in providing a better livelihood for our people, there is a clamour today for what is fashionably termed as `gen next’ reforms. Permit 100 per cent foreign investment in retail trade, for instance. This would spell ruin to crores of Indian people who are today engaged in such trade. Far from the socio-economic empowerment that we have been speaking of, such reforms will only lead to greater deprivation.

What is required, therefore, is to mount popular pressure on the present UPA-II government to make a radical break from this neo-liberal trajectory. This is essential to ensure that the Indian people can realise their true potential which is today being denied by such policies that promote inequalities sharply and the loot of our country’s resources.

(July 27, 2011)

Courtesy: People’s Democracy