India's Growth - Luxury for the rich, squalor for the poor

There is a lot of hype in the media about India’s booming economy. The truth is that this affects a small minority of the 1.2 billion population. Some 300 million Indians survive on less than $1 a day. In this situation there is revolutionary ferment taking place that will shake India to its foundation.

The media hype about India's robust growth and development obscures the harsh realities the vast majority of Indians have to face in their daily lives. According to Randeep Ramesh, writing in The Guardian (April 5, 2006), "India is one land, but the rich and poor exist on apparently different planets. Virtually unreported are some awful daily realities: the rate of malnutrition in children under five is a shamefully high 45%. Less than a third of India's homes have a toilet and most women have to wait until the dark of evening to venture out to answer the call of nature. The talk of making poverty history sounds hollow in India, a land which is home to a third of the world's poor and where some 300 million people live on less than $1 a day."

Even in macroeconomic terms India is still poor and small. It holds a sixth of the world's population but accounts for just 1.3% of world exports of goods and services, and 0.8% of foreign direct investment flows. Laxmi Mittal, the boss of the world's largest steel firm Mittal Steel, is an Indian entrepreneur that has gone so global that his company produces no steel at all in his homeland.

Even the investment that is trickling in is becoming more and more capital intensive rather than labour intensive. Hence this whole propaganda that investment creates more jobs is being proven to be utterly false in India.

The entire IT/BPO (Info Tech/ Business Process Outsourcing) industry in India employs only about 1.3 million people out of a workforce of more than 400 million. According to a Boston consulting group, "a typical annual salary for an Indian IT engineer is $ 5000 and for a graduate with a masters degree in business $7,500 - about one tenth of their American equivalents."

Their working conditions are so miserable and so crowded that, for example, in an office block in Chennai staff are squeezed into every available corner and computer terminals are used for an average of 2.2 shifts a day. Another company, Kirlosar Oil Engines Limited (KOEL), in the past financial year increased its profits by 46%. Its engine sales topped 10 billion rupees for the first time and its total exports surpassed the Rs 1 billion figure. One would have thought therefore that it was generating a large number of jobs. In reality it has not taken on a single worker since 1982. The average age of its 2000-strong workforce is now 47. Its success is not the result of the deployment of large numbers of low wage Indian workers. It comes from continuous automation and improvements in productivity. In the most extreme example, according to The Economist, one worker is responsible for 27 machines. Yet another example is Bajaja Autos, a producer of scooters, motorcycles and three-wheelers. Last year the firm produced 2.4 million vehicles with 10,500 workers. In the early 1990s it was producing one million vehicles with 24,000 workers!

This is happening in a country with a rapidly growing workforce. Its young population will add 71 million people to its workforce over the next five years, or nearly one quarter of the world's new workers. In urban India this whole phenomenon of liberalisation is playing havoc with city dwellers. As India's famous novelist and social activist Arundhati Roy put it, "This project of corporate globalization has created a constituency of very rich people who are very thrilled by it. They do not care about the hawkers being cleared from the streets or the slums that are disappearing overnight. India is not coming together but coming apart because liberalisation has convulsed the country at an unprecedentedly unacceptable velocity."

Now half of Delhi's 14 million inhabitants live in slums and 18,000 structures outside of slum clusters have been deemed illegal. The campaign to evict slum-dwellers from the banks of the Yamuna has forced at least 280,000 people from their homes. "It's creating an apartheid city, making very clear separations between the rich and poor," said Miloon Kothari, UN special Rapporteur on housing rights. "The situation in the resettlement areas is horrendous, far from the jobs and city services," he said.

But if this capitalist aggression is devastating the lives of the workers and the urban poor, it has had a more devastating effect in the villages where 70% of India's population lives. As Roy says, "where India does not live, it dies."

There have been reports of the phenomenon of endemic farmer suicides across India. In some states it worse than in others. The arrival of new pesticides, genetically modified seeds and swanky tractors that soak up increasingly expensive fuel have pushed up the cost of production. The last vestiges of Indian government support and subsidies were withdrawn a few months ago. The result is that Indian farmers have been impoverished in just a few short years. Many have borrowed to stay alive - first from the banks then from the usurious moneylenders. Chained in poverty by debts they cannot pay, farmers are forced to sell first their carts, and then their cattle followed by their land and homes. Some offer a kidney for 1,000,000 rupees. Others have put up entire villages for sale, but thousands more have resorted to commit suicides, sometimes with the same pesticides they were to use on their crops.

Whereas on the one hand this abject poverty and destitution has led farmers to self-destruction, there is also a stirring of a rapidly expanding mood of revolt in the rural areas. Various Maoist and other insurgent groups are leading this. We see this revolt in a large cross-section of the Indian countryside, from the borders of Nepal to the shores of Tamil Nadu.

According to a survey by the New Delhi based Institute of Conflict Management, the insurgency is taking place in 15 states of India. It says that Maoist presence is visible in 170 districts and concludes that, "Now the government can only ignore it at its own peril."

Apart from Chattishgarh, the movement is very strong in the Gadchiroli and Chandpur districts of Maharashtra, the whole of Jharkhand, the central Bihar district of Aurangabad, Jahanabad, Nawada and Patna. The story is similar in areas of West Bengal, Orissa and Madhya Pradesh. In many of these places the Maoists are running a parallel administration, where people go to get justice and pay taxes. In their areas they charge traders and forest contractors 10 percent of their income.

Bangalore, India's silicon valley, is also facing resistance from the tribes and Dalits (lower castes) who form the backbone of the insurgency. Up till now the Indian states have failed to control these insurgencies, rather they are gaining ground and drawing more and more rural youth into their fold. These insurgents have also used the urban centres as hideouts and for logistical support, including the transportation of arms and mobilization. Meanwhile the armed insurgency in Kashmir with its ebbs and flows goes on unabated.

The Congress dominated UDF (United Democratic Front) regime has accelerated these "neo-liberal" economic policies. These were being pursued by the previous BJP regime, which led to its humiliating defeat in the 2004 elections. In 1991, faced with an external-payments crisis, Manmohan Singh, now the prime minister, began to open up the economy. It is ironic that Nehru's own Congress party dismantled the old state capitalism also know as Nehruvian Socialism. It signified the failure of the system, but the shift to so-called "trickle down economy" has proved to be an even greater curse for the vast majority of the Indian populace. About 770 million people are not part of the market for which these economic policies have been brought into play. According to a survey conducted by the Goldman Sachs investment firm, India has a population of 1200 million yet only 58.5 million have a yearly income of $4,400 per annum. This shows the limits of the market and the exclusion of a vast majority from its mechanisms. In reality in the last 15 to 20 years only a small minority has benefited anything from the economic cycle unleashed by these market reforms.

However, it's not just on the economic front that the BJP and Congress are pursuing the same policies. On several political and social issues their policies are not only similar but the two main parties of the Indian bourgeoisie actually collude on various issues.

The Muslim population of the Indian state of Gujarat was shocked when, at the request of (BJP) chief minister Narendra Modi, India's Congress-led government rushed a contingent of army and armed police units into the state in May to intimidate and, if necessary, to suppress protests by Muslims against religious repression. One reason Congress is so willing to connive with Modi's BJP regime in Gujarat is that it enjoys strong backing from big business for pursing "investor-friendly reform" policies. They are the same as those being pursued by the central government: tax cuts (for the rich), the diverting of public funds from social expenditure to profit-generating infrastructure projects, privatisation and deregulation. Indeed, the Modi government has been dubbed the most business friendly in India.

In May 2005 the Rajiv Gandhi Foundation, which is headed by Sonia Gandhi, issued a report that hailed Gujarat as the best governed state in India and gave it top billing in what it termed the "Economic Freedom Index", i.e. ranking of states according to how business friendly they are.

The report declared "safety of life... an essential component of economic freedom". It blithely ignored the 2002 pogrom and ongoing persecution of the state's Muslims. In fact it endorsed the brutalities perpetrated by this bigoted monster in Gujarat. The Congress in Gujarat has also openly adapted to Modi's communalist politics.

As Karanti Kumara wrote, "The irony is that the CPI(M) and its Left Front allies have played a major role in creating the myth that Congress represents a secular and progressive alternative to the communal BJP... Yet as its support for the criminally culpable Modi government amply demonstrates, the Congress will not shy away from adapting to and conniving with communal forces. Whether it be for reasons of political expedience or to uphold the interests of capital against the working class and the oppressed."

It's not just that the CPI(M), with the Left Front, is continuing its support for the regime in Delhi carrying out these anti-people policies. Its leaders are themselves trying to pursue these policies in the provinces where they are in power.

The most glaring example is that of West Bengal, where the CPI(M) and Left Front have been in power for 28 years. The CPI(M) chief minister of West Bengal, Buddhadeb Bhattacharya taking a cue from the Chinese Stalinists is pushing through an ambitious economic reforms programme. His approach is capitalist and against any Communist principles. He has invited foreign investment, privatised state owned companies, banned unionisation in several sectors and is pushing to make West Bengal a major IT hub.

According to the BBC correspondent in Delhi, Sanjay Majumdar, "Indian business leaders have openly expressed their admiration for the chain smoking and austere Bhattacharya, saying they hoped his party bosses could emulate his pragmatic approach."... Sanjay adds, "...moves that have often earned him the ire of his party's Politburo members." More closer to the truth is the fact that the ire comes from the rank and file workers rather than the ossified bosses in the Politburo.

The rise of the CPs and the left in Indian politics is an iron paradox. The masses have voted for them because they want a change and yet the leadership of these left parties is bent upon preserving capitalism in the pretext of "Democracy" and "Secularism".

If we look at the 58 years of India's history since independence, the belated ruling classes of India have not been able to fulfil or complete a single task of the National Democratic Revolution. There is more communal and ethnic violence in India than perhaps any other country in the world. From Kashmir to Nagaland there is oppression of the various nationalities. The agrarian reforms have ended up in disaster. The rising rate of farmer suicides indicates the failure of the agrarian revolution. Parliamentary democracy is a farce. It is a sort of a parliamentary apartheid where only people from the moneyed classes can enter these institutions. The minority that comes from the CPs tries to consolidate rather than to expose the reactionary character of these institutions. Its farce of national sovereignty has been exposed by the slavish role and attitude of the Indian bourgeoisie towards ferocious US imperialism.

The state capitalism of the 1950s, 1960s and 1970s failed miserably. The policies of "trickle down" economics have also been a disaster for the masses. The BJP was kicked out in 2004. The Congress regime is lurching from one crisis to another. The BJP is in disarray and decline. In the recent state elections the masses gave the highest ever vote to the left parties. If the left party leaders continue to preserve capitalism then the only road will be neo-liberal economics. It will mean bliss for the rich and squalor for the working classes.

Hence the CP leaders cannot continue their hold on their parties with these contradictory policies. On the one hand they are supporting this regime, inflicting these vicious attacks on the working class. On the other hand, due to the pressures from below they have to stage demonstrations and organise protests. After expressing themselves on the electoral plane, the workers have expressed themselves through the All-India transport strike of June 14. The CP leaders were pulled into this action by the rising militancy of the Indian proletariat. This dual game cannot go on. There is already a growing ferment within the ranks of the CPs. There is an increased questioning and critical attitude amongst the workers and these are beginning to be felt within these left parties.

It is not an accident that both the Congress and the BJP fervently opposed this strike against oil price rises. This was moving towards a general strike, had not the leadership of the CPs intervened to control and limit it.

India today is in the throes of turmoil, severe crisis, impoverishment and social unrest. After 58 years of interrupted bourgeois rule India is still "living in many centuries". The caste system has not been obliterated. It has become an ugly stigma on Indian society. The infrastructure is in a shambles. The social sectors are in decline. The masses are beginning to lose their patience. The Indian proletariat has a tradition a great struggles and revolutionary movements. The elements of a new wave of mass upsurge are beginning to emerge and express themselves.

The only way out of this misery and destitution is through the overthrow of the capitalist system, through a socialist revolution. Now the CP leaders have even receded from their previous erroneous position of the two-stage theory of Stalinism. They have in reality abandoned the second, socialist stage. Now all their politics and policies are limited to the first, democratic stage. But the tasks of the democratic revolution cannot be completed on a capitalist basis. Only by carrying out bold socialist measures can the resources be created to fulfil the democratic demands of society.

The conditions are yearning for socialist transformation. Stormy events loom large on the horizon. They will shake the CPs to their foundations. The leadership will either have to change course or abdicate. This ferment will give rise to the Marxist forces within the CPs, trade unions, youth and students. A Marxist tendency with a correct ideology, perspective method and with the will and determination to carry them through, will lay the basis of a socialist victory. The oppressed masses cannot endure this exploitative and brutal system any longer. With a Marxist leadership and organization they can win this class war. A socialist revolution in India would galvanise a revolutionary upsurge across Asia and beyond.