Volume 5, No. 8, August 2004

Dr. Gupta

Lenin talked of finance capital, which originated at the end of the 19th Century and flourished in the 20th century. Monopoly capitalists now came to control market and industries. The high rising demand for capital for massive investment was to be met from the banking arrangement. Banks assumed the role of gathering capital and monopolists invested that capital in their industries. Industrialists made sure that banks could supply the necessary capital for investment, and so on the board of directors of banks industrialists assumed necessary controlling powers. Out of the capital of the banks, industrialists kept in their control necessary amount of shares. And with the investment of banking capital in industries banks also do have a control. This marriage between banking capital and industrial capital or in other words finance capital, controlled the capitalist economy for more that one hundred years. However, it should be added that for the accumulation of capital not only banks, there emerged insurance companies; pension funds, etc. In course of time, their role has enhanced. With the merger of several banks, insurance companies, etc., the amount of finance capital has grown enormously. With the wave of globalisation in such circumstances and buying shares or exercise in speculation in a situation fraught with risks has increased enormously. During the 1920s and 1930s, this speculative element was not so much as compared to the post World War II situation. The traditional way of capital accumulation by banks and then investment, particularly direct investment has tangibly changed. Though direct investment by multinational or transnational corporations plays a major role, the quest for profitable investment has pushed them beyond productive organisations for capital investment. Now banking laws have undergone many changes, making room for risks investments like in share markets in all forms. Such portfolio investment or indirect investment in the speculative field is the growing trend in the world economy. Some writers rooted in traditional mores fail to discern the increasing role of speculative markets in a country like India bogged in the abyss of blocked productive investments. One writer says that stock markets are very poor pointers to real economic performance, their indices are mostly not related to the current profitability of productive enterprises, etc. [Jayati Ghosh in Frontline, June 4, 2004]. Another writer’s opinion basically premised on the same ground bemoans that it would be like ‘authoritarian "mandate" of a miniscule minority of speculative minority of speculative wealth-holders to overturn the democratic mandate of the majority." [C.P.Chandrasekhar, Frontline, ibid]. Though the view at least concedes the fact of mandate-exercising power of small speculators it fails to refer to the growing role of speculative markets. Such writers also fail to study as to why a backward country like India frequently faces the onslaught of big speculators with growing stock markets while industrial units shrink, suffer closures, millions driven out of jobs, and newer units hardly come up in India. The Agricultural sector is providing only a dismal picure under a semi-feudal, lumpen capitalist penetration and it perpetually stands in the way of consumption of goods from the industrial sector in India.

It should be remembered that now about 40 percent income of the leading banks in America or England emanate from speculative business. In other capitalist countries too the major share of income of the banks come from this speculative business. Just before the entry into the 21st century, the market for speculative capital had grown by leaps and bounds. The market capitalization investment in the world wide share market was to the tune of $ 9,398,29.1 crore in 1990. By the year 1999 it was recorded at $ 36,030,80.8 crore, marking an increased rate of 283 percent. What is noteworthy is that much of such speculative capital was not related to goods or welfare. Globalization has removed many of the restrictions on the free flow of capital. By 1988 all the west European countries revoked the restrictive laws in respect of free movement of finance capital. With this complete convertibility of currency it was ensured as a necessary step towards that free movement as prevailing in many countries and new countries have been coming to this end. Yet it is notable that in the age of such globalisation with the unrestricted flow of finance capital, instead of expected boom in the capital market, there is a visible trend towards a downward growth rate of national income in the capitalist countries. Between 1979 and 1989 the average rate of per capita product of the seven most developed capitalist countries (Group of Seven) was recorded at 2.1 percent which scaled down to 1.5 percent in the next 10 years. The actual situation has belied the prospect of attaining the solution to the problem of scarcity of demand. The Keynesian medicine claiming supply as a means will itself create demand has been found ineffective. Keynes also prescribed ‘socialisation of investment’ in the crisis ridden situation to save capitalism. Such queer "socialization" or limited state intervention to overcome crisis has now been dismissed for some years now for the frenzied and unrestricted financial markets. The reduced scope for expansion versus increased ability to expand in the current monopoly stage is the irresolvable contradiction.

In the global capital system, the MNCs seek the expansion of capital into the third-world countries in a big way and this "would be totally impossible without the massive and unremitting application of power of their states, either individually or collectively (including through such agencies as the International Monetary Fund and the World Bank), to the shaping and maintenance of an institutional setting and what is known as an "investment climate" favorable to the functioning of profit-making capitalist enterprises" wrote Paul Sweezy.

The demand-supply relation is constantly under stress and strain. With the increasing investment in the speculative market modern monopoly capitalist invest crores of dollars in market research and advertisement to expand market potentials. But the underlying contradiction lying in the development of capitalism alongside shrinkage of employment facility makes it impossible for the solution of the problem of capital investment and stagnation ("excess of capital" and "excess of population" = idle plant and unemployment workers) remaining inherent in capitalism. Such stagnation is visible as a constant feature in the present monopoly stage. In the present stage speculative market is one big avenue to overcoming investment problem of moribund capitalism. Bond, rate of interest, convertibility of currency, etc. have now come under the purview of the speculative market. The traditional sale and purchase of shares have been surpassed by newer elements in the more pronounced speculative world of capitalism. Such derivative, or in other words, risky market of sale and purchase has received insurance facility in many countries. When investment towards merger and take over of certain industrial units takes place, this is not productive as such, yet finance capital finds an avenue for investment. The bourgeois economist Keynes in his General Theory Of Employment accepted without valid explanation that in capitalism inducement to invest by capitalists remains weak and insurmountable leading to stagnation and unemployment. He also clearly stated that the increasing importance of the speculative market makes the capitalist economy survive like bubbles. The third world countries bear the burnt of capitalist exploitation and crisis. With the unstable economies dependent on foreign ‘aid’, complete convertibility of their currencies face further problems with the inflow of speculative capital and other indirect investments through the so-called reforms measures. The impact of the share market in other countries do have a cumulative impact on the Indian and other economies. Thus in the speculative capital market, in which foreign investment plays a pivotal role, can send tumultuous reactions in the Indian market. Government policies find diktats from the speculators in Dalal street, etc. The recent sensex**(See Footnote) crash or caveats to the Manmohan government is to be understood in the light of this development. This does not, however mean, the current situation precludes other powerful factors in the determination of government policies in India. What follows is taking a look at the play of speculative market in the recent ripples caused by stock markets in India.

Though a backward third world country, Indian financial markets are among the most speculative in the world. Even in comparison with many leading international financial markets, the sheer volume of speculative trading in Indian financial markets is extremely high, acutely displaying the frailties of the Indian financial sector. What is revealing in the recent media reports is that the Indian financial markets are second only to NASDAQ (National Association of Securities Dealers Automated Quotation System, US-based financial market) in speculation in terms of market capitalization. Some of the leading financial markets like that of the London Stock Exchange (LSE), and such markets in Germany, France, Hong Kong, Singapore and Japan showed much lower degree of speculation

The following table shows that monthly average turnover and market capitalization leading financial markets of the world as in the year 2000. The monthly turnover/market capitalization ratio of Indian financial markets was almost double than most of the developed and so-called emerging markets.

What is notable is that the daily turnover in the Indian financial markets has increased many fold. Since the mid 1990s, such increase was about Rs. 5500 million to Rs. 15000 million on March 31, 1995, the total turnover reported by all the 23 stock exchanges in the country touched a phenomenal amount of Rs. 33133 billion on March 31, 2001. However, as is the nature of such speculation everywhere, the revealing aspect is that actual deliveries are only a small portion of the turnovers. In the period April-December 2000, a mere 13 percent of trades was settled by actual delivery in the Bombay stock Exchange (BSE) and as low as 6.3 percent in the National Stock Exchange (NSE). The rest was purely speculative trading. The table below is a pointer.

According to Kavaljit Singh, much of the trading is concentrated in a handful of stocks with the top 10 stocks accounting for over 80 percent of the turnover of the Indian financial markets. The top 100 stocks account for almost 99 percent of the turnover. The notable aspect is that there are several thousand stocks listed in the market that are not traded at all, exposing the sordid state of affairs in the Indian markets. Secondly, despite the high volume of secondary market trading, financial markets are no longer performing the function of capital raising. Alongside this, the new capital raised through primary markets too has witnessed a sharp decline over years. Compared to Rs. 2,28,740 million raised in the year 1995-96, only Rs. 78,170 million was raised in the 1999-2000. Paradoxically, in spite of the spurt in the overall numbers of new issues (particularly in the InfoTech sector) in the year 2000, the total amount of capital raised has tangibly declined. Beside that the high degree of volatility, even greater than most developed capitalist economies, is another feature of Indian Stock markets. The rocking of the stock markets a la Harshad Mehta scam in 1992 and Ketan Parekh scam in March 2001 are grim reminders of extreme fraility and massive corruption inherent in the Indian economy basing too much on stock market, particularly in the period of unbridled reforms measures in the forms of globalization and liberalization initiated during the finance ministership of Manmohan Singh in 1992. ‘The New Economic Policy’ under the Congress(I) P.M. Narsimha Rao dictated by the IMF, World Bank and soon after the GATT treaty and then the WTO have not only increasingly tied the Indian economy to the imperialist masters and MNCs, all this has further accelerated the speculative markets which has little role in the actual production of goods and providing services to the people .

No sooner had the NDA government been ousted from power than the stock markets sent out their jittery messages with the sensex spiralling downward for some days. It was like a tornado that kicked up huge waves in the speculative markets, giving the new government a taste of power that they have assumed in recent years. The rhetoric of ‘Reforms with a human face’, the CPI(M) ‘Chief Minister Buddhadeb Bhattacharyee’s baseless talk of holding the central government a hostage to the ‘Left’ (However, soon after the volatile Mr. Bhattacharyee contradicted it as if wrongly quoted), the initial confusion created by the distribution and immediate redistribution of ministerial portfolios, etc. disturbed the stock markets. The adverse reaction was tremendous. The volatile financial markets had made a deafening roar. Foreign institutional investors who come for portfolio investment and powerful brokers had shown how they could mould market sentiments with a telling decisiveness. Even P. Chidambaran, the finance minister, had himself to drive down to Mumbai to meet FIIs and stock-brokers to appease them with all positive signals conducive to speculative markets. Economic reforms, hard or so-called soft, in terms of World Bank, IMF understanding, are basically related to privatisation of public sector units, changes in labour laws, removal of import restrictions and most of all openly responsive to the ups and downs of the world capitalist market. The Indian electorate in general is unaware of the actual writings in any election manifesto of any political party. What appeared perilous to the general electorate before the election was the reforms-related chilling implications in the daily life under the BJP dispensation? One must be surely aware of the fact that all parliamentary political parties garner votes dishing out a platter of good pro-common people policies and promised performances for the future towards the betterment of the general masses. However, when it comes to wooing the capitalists or rural landlords such parties in their close interface with those classes let out the open secrets contained in election manifestos regarding vitally important matters related to them. The Indian electorate generally identified the NDA as the wrong doers pushing common people’s lives to the brink. Thus the electorate acted, unseating the NDA. The anti-NDA parties with the Congress(I) atop are now only crying hoarse after receiving the favorable electoral verdict that the wheels of reforms shall be moving unchecked. The Manmohan government, at least for now, will try to reconcile the powerful interests of the top most layer of Indian society, the powerful market makers of Dalal Street and most of all the World Bank, IMF dikats to the minimum election-related anti-NDA aspirations of the electorate. One liberal writer argued recently that if a programme creates attractive investment climate for real, as opposed to purely speculative, investments reconciling the above two sets of interests and demands it can keep both the opposing forces in good humour. He writes:

These are only ifs and buts, a fond expectation to keep both the common people and imperialist agencies in cheers. This does not reflect the crucial fact of laws of development under the world-wide imperialist system of exploitation. This sounds like spinning endless yarns of sophistry as done by the likes of CPI(M) Polit Bureau members Sitaram Yechury, Buddhadeb Bhattacharyee ,etc. to peddle reforms appeasing all alike. It is like building castles in the air. The stinging reaction of Dalal Street against the unsteady, jittery political affairs and the CPI(M)’s blowing hot and cold only to later appear like a tame domesticated political formation has actually carried the real warning signal for how to carry forward the NDA reforms, be it in the name of reforms with a human face or in an other suitable name.

Despite the furor over the stock market crash, it must be asserted that from 17 to 19 May, 2004, even just before Manmohan’s assumption of power, "the overall turnover of FIIs, which is a sum of gross purchases and gross sales, surged almost 100% rising to around Rs. 2,500-2,800 crore over the past three days. At the beginning of May 2004, it hovered around Rs. 1000-1200 crore writes the Economic Times, Kolkata, on 20 May 2004.

The second biggest crash of more than 14% in one single day on 17 May, according to economic analysts, must have been caused by the sale of equities by large corporate houses or brokers themselves. It was found that on that day a couple of large corporate houses and several big brokers did sell early in the morning of 17th May. It is notable that not only big brokers, FIIs, Mutual Funds, corporate houses, domestic institutions such as LIC, GIC and banks are prominently present in the buying and selling of equities in the stock market. This only points to the rising role of corporate houses and financial houses in the speculation market, unproductive in substance. This also shows the increasingly limited area of productive investment.

It is notable that with the sharpest fall in India Stock market indices, the Congress-led alliance had to move quickly to form a government and clear the air on some reform issues. While international factors like the investment prospect in the US, rising oil prices and the prospect of interest rate hikes in the West are impacting markets all over the world, there is no doubt the sell-off on the so-called Black Monday was precipitated by basically Indian stockbrokers and big business. [On that ‘fateful’ day FIIs and FIs did not sell significantly]

In the first two weeks of May 2004 there had been a secular fall of over 15% in all the big stock markets in the Asian region. China, Hong Kong, South Korea, Taiwan and India have all fallen dramatically. But Indian markets have fallen much more – about 23% in ten days. [Economic Times, Kolkata, 18 May 2004]. It is possible that big market operators in India are cleverly attributing the huge loss in market capitalization almost entirely to the prospect of a Congress – Left alliance at the Centre so as to increase their bargaining power with the new regime, writes a commentator [Ibid].

The truth is that there has been a substantial speculative build up in the form of hot money pumped in by foreign hedge funds into all the big Asian markets. This money has contributed to the unprecedented growth in the forex reserves in all these economies. Now some of these funds are going back to the US markets because of the expected signs of a good prospect over there. Whatever may be, the relevant question is the increasing role of mainly foreign, followed by native speculators in the Indian economy in the period of reforms.

The BJP-led NDA has been voted out from the Centre and some states with the Congress party and its allies [the CPI(M), CPI included) scripting a victory with 219 seats. If elections, the recent 14th General election, is any indicator it reflects the protests and aspirations of the electorate. The Congress is now the largest single party, polling a smaller share of the votes than in 1999: 26.21 percent against 28.3 percent. While the BJP received a negative swing of 2.27 percent from 1999 statistics. In Bihar Laloo Yadav cut across caste and community with his tricky alliance with Ram Vilas Paswan and his own despicable record of corruption. In Andhra Pradesh, the dangerously anti-people butcher Telugu Desham with Chandrababu at its head and an ally of the NDA was routed. In UP BJP shows its poor performance with a mere 10 seats. In general the verdict was against the communalist and avowed pursuer of World Bank and WTO dictated reforms by the NDA led by notorious BJP. Basically following piggy back politics and open, unequivocal support to the time tested ruling classes party the Congress(I) and the erstwhile NDA partner DMK, etc. the CPI(M) and CPI have together registered the highest tally so far with 59 seats.

It is practically of little significance who formed the government and with whose support because both the NDA and the DPA led by the Congress and supported by the parliamentary left have already shelved minor differences on the fundamental question of economic policies. Communalism on which the BJP is premised was no doubt an important issue, particularly in riot-torn Gujarat. Despite the option of lending support to Hindutva or rejecting it outright was a major issue in India and despite the choice of courting or dismissing fascist TDP killing the best sons and daughters of Andhra Pradesh, or the anti-democratic policies of many state governments, what crucially and generally emerged from the recent elections was people’s voice against the economic onslaught in all forms on the toiling people, particularly women, dalits and tribal people of India. It is obviously a vote against reforms. One might contest such a view citing some vote-catching phrases from the election manifestos of the BJP or the Congress. The BJP Vision Document made extensive references to agriculture and social programmes. It argued how the BJP aims to bring about the second green revolution, expand employment, solve the water problem and bring health care and education to all. However, it emphatically stated that reforms would be carried on with the assumption of power. In the same vein the Congress(I) manifesto with such pious platitudes for the farmers and tall task on growth for employment generation minced no words to announce its support for economic reforms. The manifesto stated: " The Congress will broaden and deepen economic reforms. The overriding objective will be to attain and sustain year after year a 8-10 percent rate of growth over all sectors, particularly agriculture and industry…"

Clearly and frankly both the parties were for pro-market, pro-reforms measures. It was the same Manmohan Singh who first introduced reforms i.e. the policy of liberalisation and privatisation under the auspices of the World Bank, WTO etc. The votaries of reforms tries to project a rosy picture emanating from such a policy. One instance is Arvind Panagariya who has written such a supportive article in EPW 22 May 04 issue arguing that serious scholars agree to the fact that while the "era of autarky and licence raj failed to produce any reduction in the long term poverty, the advent of liberalisation, first on piecemeal basis under Rajiv Gandhi during the first half of the 1990s and later, on a more systematic and comprehensive basis under Manmohan Singh and his successors in the 1990s and 2000s have cut the proportion of the population living below the poverty by a significant amount, perhaps as much as half." First of all it must be clearly stated that both the BJP view and the Congress view on reforms are never contradictory in substance. Secondly such a cock and bull story eulogising reforms is manufactured in India and abroad by economists on the payroll of the World Bank, WTO and such international interests sucking people’s blood while unemployment, chilling poverty and grinding problems continuously engulfing the vast number of Indian masses. From an analysis by absolutely pro-reforms The Japan Times after the stunning defeat of the NDA. We find the following:

"Prime Minister Vajpayee had been in power for six years. During that time he oversaw reforms that yielded impressive economic results. They have propelled India into the ranks of the world’s fastest growing economies, notching up 10% growth in the first quarter of this year and creating 1 million jobs annually…."

Surprising though the result is, it is easily explainable: the Indian country side, home to more than two-thirds of the country’s population, has not benefited from the BJP’s reforms. "India Shining" is largely an urban phenomenon. The BJP has supposedly created 1 million jobs a year, but 9 million people enter the workforce annually. Some 300 million Indians live on more or less than a dollar a day, and the most basic infrastructure, such as electricity and running water is lacking…."

The Japan Times analysis [Quoted in The Economic Times, Kolkata, 19 May 2004] ends with an optimistic note that " Congress points out that economic reforms began during its previous administration. Similarly, there is no sign that Congress would abandon the peace initiatives begun by Mr. Vajpayee." Let alone the question of Vajpayee’s peace initiative, which was dismissed by the U.S. administration claiming its own behind-the-scene pivotal role. It is a mistaken theory that the reforms pursued by the NDA led by the BJP could deliver the goods in the urban areas but failed in rural India. A bit of truism, however, lies in the tangible fact that a very small percentage of the upper middle class and rich section in cities benefited by the reforms.

After twelve years of globalization since the Narsimha Rao government’s period, particularly after five years of the BJP led NDA rule, 2003 Human Development Report confirms that India’s position has gone down to 127th, down by 3 position in respect of the previous year. According to the UNDP, by the year 2001 the per capita gross domestic product stood at $ 460 while the comparable average per capita production value taking the whole world was $ 5133. There have been lots of studies in the recent period blasting the jugglery of statistics to show an 8% growth rate in India in 2003-04 tactfully considering 2002-03 as base year when the growth in agricultural sector was negative i.e. –5.2%. In fact there is no factual datum to prove that during this period of reforms Indian agriculture showed signs of rapid growth. According to Utsa Patnaik between 1990 –91 and 2002-03, as per government records are found, the supply of per capita food crops actually declined. The industrial growth also has come down. It is actually linked to an enormous destruction of productive forces as a result of privatisation and closures. The euphoria over the IT sector has already taken a beating. Whatever industrial growth was found in the recent past, it was in the years from 1984-85 to 1990- 91 recording 8.5% per year. Though it was obviously not a boom and it slipped downwards soon after. One study shows how baseless is the current claims of industrial growth by presenting an important indicator: The scales of diesel, furnace oil and lubricants – all they had fallen in the period April-December 2003 (by 0.8, 3.7 and 3.7 percent respectively ) and only slightly rose in January 2004. It is a paradox: positive industrial growth is claimed by the followers of reforms when consumption of fuel palpably fell. The ‘World Bank Evaluation Department’ in its report in 2000 had focused light on 28 such countries practicing reforms as dictated by the World Bank, IMF since the 1980s. The result of such reforms is dismally uninspiring. The per capita income of the 40% of those countries has shown no increase, but rather a decline. Among the countries which recorded a rise in such income, 85% of them in the second decade of reforms showed signs of declaration of growth sliding down to 1% or even less. All these are the fruits of reforms dictated and sponsored by the World Bank and IMF pushing millions to poverty and unemployment. According to India government’s own calculations, employment growth has plummeted from 2.7% a year in the pre-‘liberalisation’ period to just over one percent in the ‘liberalisation’ period. The number of new jobs fell from 7.6 million per year in the earlier period to 3.5million in the later period [Aspects of India’s Economy, Research Unit For Political Economy, 36 & 37. p.57]. So far as the percentage of the Indian population below the poverty line, figures are deliberately fudged to show the decline in the number. Yet if the more reliable government sample survey covering both weekly and monthly expenses of such poor families are taken into account the 1999-2000 figure shows that 34 crore and 42 lakh people of India live below subsistence level. With further decay in the following years under the reforms process the figure must have risen further. It is all a grim reminder of the consequences of the reforms under the wheels of the globalization juggernaut.

The Leftists, who were once the most vocal crities of the model of economies that he (Singh) pioneered in decision-making, is today his chief supporters. Dr. Singh paid a visit to CPM general secretary Harkishan Singh Surjeet after Ms. Gandhi had a meeting with him to get his nod for the new prime ministerial candidate." [The Economic Times, Kolkata, 20 May, 2004]. To take a look at new the PM’s earlier record, development of overvalued currencies has always been standard IMF prescription and Dr. Singh accomplished that with Narsimha Rao’s consent. The top personal income tax rate was lowered from 50% to 40%.Foreign institutional investors (FII) were allowed unrestricted convertibility on the capital account. Private sector investment in oil sector etc. was initiated. Private investment in power, telecom and roads was started. Corporate tax rate was lowered. Stock markets began to play a powerful role. The Harshad Mehta scam unfolded in 1993-94. Manmohan decided to set up the National Stock Exchange in 1993-94 in 1995-96; excise top duty rates were cut from 110% to 50%. The living mascot for economic reforms on the lines of Reagan of Thatcher, Mr. Manmohan had received the 1993 recipient of Euro money’s ‘Finance Minister of the year for Asia’ awards for 1993 and 1994.

Now with this grim reality of the devastating impact on the Indian economy and its majority of the population through the World Bank, IMF dictated reforms one can imagine the impending doom lying in store in the unfolding days. Soon after the assumption of power at the centre Manmohan Singh declared that there would be no halt to the ongoing reforms. On 17th May Manmohan sent a sharp message to the Indian investment community ruling out " any differences with Left parties on economic issues." He made no mistake to add, "The Left is firmly committed to the success of this government." [The Economic Times, 18 May 2004].

The Bush administration is happy with the UPA government in power. "US and Indian bilateral relationship is at its best in many decades. And the US administration is exploring the scope of widening relations with India from just being largely a strategic one to one that is comprehensive. I don’t think there will be any shift in Indo-US equation now that the NDA government will be any shift in Indo-US equations now that the NDA government has been replaced by a Congress-led one." David Kennedy, US press attaché in India, told the Economic Times." [Economic Times, Kolkata, 20 May, 2004] Again the ET added "An Indo-US interface in "missile guidance" could also unfold "down the road". A 100 of the senior most US scientists are arriving in Bangalore in June to mark 40 years of co-operation in space technology between India and US." Mr. Kenneddy underlined.

About the ‘Left’ supported UPA government Teresita Schaffer, former US deputy assistant secretary of state for south Asia made sure that bringing Manmohan Singh, the virtual author of the economic reforms programme in 1991, to the post of P.M. would be well received worldwide, including the U.S. [Economic Times, Kolkata, 20 May 2004]

The CPI(M) led ‘left’ must soon shed its rhetoric against finance capital with the greater taste of power at the Centre like the ‘Leftist’ Brazilian President Lula De Silva who went a whole hog for reforms removing even the pension system. Similarly the Congress-‘Left’ joint venture is all set to come up with Lula-type reforms. Lula was initially criticized for his left rhetorics but assuming power in November 2002 he became instrumental in bringing about institutional restructuring to the satisfaction of foreign and domestic investors. It is to be stressed that the Common Minimum Programme (CMP) has clearly promised that all WTO commitments already made will be honored. Soon after the announcement of the CMP Bengal’s fake Marxist government is now all set to head for World Bank funds to implement projects in various sectors. The new loan-cum-grant package of Rs. 200 crore will now be available for the CPI(M)-led ‘Left’ government. When the reporters asked the CITU secretary Kali Ghosh for comments the CPM T.U. leader diluted all anti-World Bank outcry to say "there was no harm in taking loans forms the World Bank if it did not want to dictate terms to the government" [The Telegraph, 11 June, 2004]. What a topsy turvy and white lie that the World Bank loan and grants would be pumped into Bengal under the auspices of the CPM led government without any strings! It is worth a giggle.

In his first briefing after the declaration of the CMP Chidambaran made it clear "….. Foreign direct investment flow will be doubled, financial markets will be deepened, the market issues to be offered by strong PSUs itself will help do this and FIIs (Foreign Institutional Investors) will of course continue to be encouraged." He also emphatically added, "Only those PSUs which can earn profit on a sustained basis in the face of global competition will be retained by the government." [The Telegraph, 29 May, 2004]. Thus the reforms based on privatisation and unrestricted foreign investment shall go on as before with only some doses of glossy pledges here and there. Dispelling all confusion Buddhadeb Bahttacharyee in his dramatic best declared after meeting Chidambaran "Communists are not fools. They are not against reforms. What we want is what the Prime Minister has said about reforms with a human face". [The Telegraph, 30 May, 2004].

The common people will soon realize what is that marvelous thing like ‘reforms with a human face’, a catchy slogan shouted by the CPI(M) and the Congress. There might be winding up of the disinvestments ministry but the name of the ministry hardly matters as the disinvestments process won’t be stalled and the ‘Left’ would manufacture new stories to justify such steps in this period of honeymoon. After meeting Buddhadeb, on 29 May, 2004, Chidambaran expressed all satisfaction to state "the Left parties will not be a hindrance in going ahead with economic reforms". He also added that the ‘Left’ parties’ role "will be a positive infuluence" in implementing various economic decisions, including public sector disinvestments …" [The Telegraph, 30 May 2004]. It is worthwhile to assert that with the much touted reforms policy all parliamentary parties including the so-called Left are well scttled in the same boat, minor difference notwithstanding on this or that aspect. Jairam Ramesh, secretary, All India Congress Committee and secretary of the Congress(I)’s economic affairs committee has already gone on record quite candidly "I have seen the Left Parties’ manifesto and it might as well be our manifesto. There are no differences that cannot be surmounted. Besides, in today’s world everyone has to be pragmatic and the Left parties, in the way they run their government in West Bengal have proved themselves to be pragmatic. ….." [Frontline, June 4, 2004]. While maintaining a seeming difference with the new Congress(I) government and calculating the anti-Congress sentiments in Bengal, Kerala, Tripura, the CPI(M)-led ‘Left’ parties are engaged emerging in whipping up a sense of euphoria about a sea change in the polity in India with their important role in the formation of the UPA government at the Centre. There is more in store for the unfolding days. The CPI(M) like betrayers set off the process to kowtow to the ruling classes and their principal representative the Indian National Congress soon after its inception and now the CPI(M), CPI, etc. have turned into distinctly ruling class parties. Garlanding the Congress(I) will only whet the appetite for more share at the Centre. It is not the end of the journey in the hell. Degeneration has no limits.

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