Volume 5, No. 7, July 2004

Cosmetic changes in political structures bring no real benefits to the masses. This applies as much to Iraq as to India. Only in the former it is crude and blatant, in the latter it is more subtle. The Congress-led PDA has already vouched to take forward all the economic policies initiated by the BJP-led NDA; while the newly installed interim government in Iraq, handpicked by the US, has a notorious CIA operator as its chief. Though comparisons are often not accurate, and the case of Iraq and India are not exactly similar, what must be understood is that neither can deny imperialist dictates.

Both India and Iraq, as are many other countries of the third world, victims of imperialist policies of globalization, most aggressively pushed by the US imperialists. India has been facing a massive economic onslaught, Iraq a military onslaught. The economic needs of the imperialists, particularly that of the US, determines political and military policy in most countries of the world. And the servile comprador elite of these countries faithfully follow their imperialist master’s dictates.

So it is not surprising that after all the hype of the CMP (Common Minimum Programme) is over, and notwithstanding the so-called Left’s support, it is business as usual — with the first tasks of the new government being to get their instructions from their foreign bosses and their Indian agents in big business.

Hardly had the government been sworn in when the very first meeting that was held was of the US-India DPC (Defence Policy Group). This three-day meeting which began on May 31st (barely a week after the government was sworn in) was led by the top Pentagon official, Douglas Feith. This US Under Secretary of Defence discussed the entire gamut of India-US relations, including strategic issues, joint exercises, training and acquisition, counter-terrorism requirements of India, security of the sea-lanes in the Indian Ocean, etc. He opposed any slow down in ties in key areas and said that "defence is an important component in the strategic relationship and we have constantly exchanged ideas and solved problems in this area".

Hardly has the new government come to power and it has sent a UN (read US) request to 16 State governments to train Iraqi police to crush the Iraqi resistance. And Natwar Singh’s (Foreign Minister) first visit abroad was to Nepal, where, speaking like any other Indian expansionist, he said that Nepal’s security was India’s security and vowed all support to the Nepalese government to crush the Maoists. Besides, he had a secret discussion with the genocidal Nepalese king with no officials present!!! And on the eve of his departure the government arrested 8 senior Maoists of Nepal from Patna — these included five Central Committee members.

And as for the Finance Minister, Chidambaram, his first task was to fly to Mumbai and have meetings with the FIIs (Morgan Stanley, Citigroup, Merill Lynch and other such big-wigs), stock-brokers and Indian big business. In a series of meetings he listened to their long list of demands (like further reduction in the rate of corporation tax) and promised full cooperation. The first change brought in, in the sphere of the economy was by Praful Patel for the privatization of airports, which has been a persistent demand of the foreign investors. And bowing totally to their dictates these were not only privatized but foreign investment up 49% was allowed in the two key airports of Mumbai and Delhi and 100% in any new airport opened. The CPM put up their traditional mock protest under full media gaze.

Similar have been the policy announcements of nearly all ministries: Commerce Minister, Kamal Nath, says that he will remove the existing caps on foreign investment in sectors like telecom, banking and insurance, etc. and will work to maximize exports; Sharad Pawar, the agriculture minister has told farmers not to weep over losses and has increased focus on biotechnology, being pushed by the US multinational, Monsanto. Even HRD minister, Arjun Singh, has gone to the extent of saying that he will bring FDI into education. As far as ‘economic reforms’ go, to prove their credentials to the imperialists, the Congress appear to be moving faster than the BJP. In addition, the CMP talks of "maintaining a credible nuclear weapons programme", which had been opposed by both the Congress and the CPI/CPM when the BJP went nuclear. And once again Home Minister, Shivraj Patil, states that there is no time frame in the CMP for repealing POTA!!!!

In the US while Bush continues his maniacal war against the Iraqi people; the entire Senate backs him, including the ‘Democratic’ opposition candidate, Kerry. Kerry critises Bush for lying, but rules out any withdrawal from Iraq if elected. When Spain decided to pull out it was not Bush, but Kerry who intervened to try and make him change his decision. And as a senior Democratic Senator, he was one of the vocal supporters of the resolution giving Bush unlimited powers to make war. He also told all the lies that Bush told on the WMDs. He even went further than Bush saying "Iraq is developing UAVs (unmanned aerial vehicles) capable of delivering chemical and biological warfare agents that could threaten us".

So, Congress or BJP, Democrats or Republicans, Labour or Conservative (Britain) their difference to real policy matters is small. At most when inter-imperialist contradictions intensify one section of the ruling classes may back policies of one bloc, while the other of another. At present with the US as sole superpower dominating the world, collusion between the imperialists is till now primary, though contention between the EU/Russia and the US continues to intensify.

The Congress continues the BJP’s policies of economic reforms while the Democrats will continue the policies of aggression and war. No doubt there may be differences in methods and intensity, but in essence they will be the same. Unfortunately people have short memories and forget the aggressions of the Clinton era or the Congress role not only in the Emergency, but also in the anti-Sikh pogrom and even the very initiation of the present Hindutva trend by Rajiv Gandhi. But, what is of advantage to the people at large is the growing infights amongst different sections of the ruling class and the resulting destabalisation of their polity. For, such instability weakens the ruling classes of the respective countries and allows the masses greater space to organize their forces to more effectively hit at them. And as the crisis in the world economy deepens, such infights are bound to intensify giving greater opportunities to the world people and revolutionaries to advance their struggles.

Having said this let us look at the international geo-political scenario and then its reflection in India. Finally we shall turn to the resistance against the policies of war and reaction worldwide and in India.

With US’s world domination, economically, politically and militarily, though no power is willing to clash with this monster, the US ruling clique is getting more and more isolated worldwide. The US-Zionist Axis is getting increasingly isolated with Spain deserting and even Britain showing increasing hesitation to follow outright all US dictates on the war. In this the great Iraqi resistance is at the forefront tying down the US’s plans for world hegemony. It is stuck in a quagmire unable to extricate itself and also unable to succeed. It had to change the recent UN resolution on transfer of power to the Iraqis three times before the other imperialist powers accepted it. Its greed for Iraqi oil prevents it from sharing its booty with other imperialists. On the other hand this is resulting in a backlash with fears of the spill-over of the war shifting to Saudi Arabia which alone provides 10% of world oil. With attack on oil installations there and in Iraq, prices of crude oil have hit a 23-year high at over $42 per barrel. Though this gives windfall profits to the oil majors, continuing high oil prices can once again push the world economy into recession.

The much touted US recovery of 2003 with a GDP growth rate of roughly 4% is not as good as it appears. It has been artificially stimulated by huge increase in government spending, unheard of reduction in interest rates and massive tax cuts to boost spending.

The bulk of the growth has been fueled by the massive hike in the defence budget and the war expenditure in Iraq. The defence budget for 2003 was $375 billion and is likely to increase to $402 billion this year. It has reached a gigantic 5.1% of GDP. This does not include the $40 billion spent on the CIA and the huge amounts spent on the FBI, Homeland Security and other counter-insurgency operations. The total figure would be well over $500 billion. This figure alone is equal to India’s GDP. So, far the US has spent a huge $120 billion on the Iraq war — of this $98 billion has been for military purposes, while $21 billion for rebuilding Iraq’s economy (for US TNCs) and $1 billion for US administrative expenses. Till today the US is providing 80% of the foreign troops and 90% of the costs — the so-called ‘coalition of the willing’ is more a show piece of support to the US aggression.1

The US was expecting a bonanza from the Iraqi oil. But due to consistent attacks on the oil establishment, production is barely 2.2 million barrels per day, which was the amount pumped out in 2002 under Saddam. The US claims it will rise to $13 billion by year-end, which is unlikely due to the intensification of the resistance. The Iraqi puppet government will cost the US $15.6 billion in 2004. So, the loot from Iraq is yet to materialize; only, expenditure on the war effort has no doubt boosted the US economy. The West’s desperation for oil can be seen from the scandal that broke out at Shell where the Chairman had to resign for over-stating the reserves it was said to possess.

But this ‘growth’ has not benefited the people of America, only the huge TNCs. There is no reduction in the unemployment which continues at a high of 5.6%. In fact the number of planned layoffs rose for the second consecutive month in May this year, up 1.6%, with the retail sector registering the highest number of cuts.2 The main benefit of this recovery has gone to the TNCs whose profits have skyrocketed in the year 2003. The Fortune 500 listing of the top 500 US corporations 3 have seen their profits surge by 540% to a gigantic $446 billion. This was after two years of falling profits, with the Fortune 500 total profits dropping to as low a figure as $70 billion in 2002 ($206 billion in 2001). Not surprisingly leading the pack in profit-making was the oil giant Exxon with a profit of $21.5 billion, to be followed by GE and the two big banks, Citigroup and Bank of America. Though profits increased 540%, revenues from sales increased a mere 7%. This shows that the high returns did not come from a booming economy but from wage cuts, speculative returns and war profiteering. The top 10 companies alone made profits of $120 billion — more than the GDP of many a backward country.

Besides, this recovery has been fueled with a continuously rising budgetary deficit and trade deficit. The trade deficit is all set to rise to $550 billion this year compared to $490 billion last year. The budget deficit continues to be to the tune of $500 billion. Such large deficits are unsustainable in the long run. But to fuel this economic growth and capture oil resources anything of up to 55,000 Iraqis have been killed and over 1000 US soldiers. As no records are being disclosed and all we are fed is US media spin, the figures could be even larger. The bulk of the Iraqis killed are civilians.

The Zionist regime of Israel is the US’s outpost in the Middle East. Bush, in speech after speech makes out that they are faced with Hitlerian forces comparing his offensive against so-called terrorism as that of the Allies against Hitler. But it is quite the contrary. It is they who are the fascist Hitlerian forces while those fighting them are resistance forces — whether in Iraq, Afghanistan or any other country. That the resistance turn to Islamic fundamentalist ideology is because the Marxists have weakened to take up the battle; and politics and wars of resistance do not take place in an ideological vacuum.

About the same time that Bush came to power the Zionist began their systematic assassinations, called targeted killings. Since Nov.2000, 327 Palestinians have been killed in a total of 160 assassination operations carried out by Israeli security forces. Of these killed 129 persons, including 41 minors, 14 women and 15 old, were non-targeted civilians. A total of 789 persons were injured the bulk of whom were civilians. The Zionists have even openly threatened head of state, Arafat. And through all this the ‘international community’ and the UN have been silent. Earlier the CIA killed in clandestine operations, now the Zionists have got so arrogant as to openly declare their murderous intentions. The viciousness is unprecedented. Over and above this, in the same period, about 139 Palestinians were arbitrarily executed by Israel in the Occupied Palestinian Territory (OPT). In the same period 2,397 Palestinians were killed by the Israelis in the OPTs of which 460 were minors. Those who have been targeted include activists of Fatah, Hamas, the Islamic Jehad, the Al Aqsa Martyr’s Brigade, and the PLFP — including its top leaders.

The Zionist offensive against the Palestinians matches that of the US in Iraq, Afghanistan and other parts of the world. The brutalities in Iraq, brought out by the recent pictures of torture are probably the tip of the iceberg. Their terror methods would involve barbarities unheard of in earlier wars, utilizing all the sophisticated scientific equipment for the purpose. Similar methods have been used against the prisoners being held at Guantanomobay. Bush keeps pitting their fight as that of a crusade of the "civilized against the Islamic barbarians". In fact it is quite the reverse — the US forces and the Zionists have behaved worse that the most evil barbarians of yore. The civilizing effect of US occupation has pushed Iraq back to the level of the Middle Ages. The rich civilization of Mesopotamia, with rich land, oil and water resources has been all but destroyed. One of the few countries in the Arab world which was not fundamentalist with a large crop of highly educated people, including women, is being devastated. Besides the over 50,000 killed since the war began thousands more have been killed, maimed or otherwise devastated by hunger, disease and the free run of US-sponsored criminal gangs. While the US has nursed a small class of super-rich Iraqis, over 50% of the population is unemployed.

And now after Iraq it is Haiti. The only difference here is that the EU has backed the intervention, the UN has given it legitimacy, and the main occupation force under US command is that of Lula’s Brazil.

But genocides come naturally to the imperialists. As recently disclosed the massacre of 8 lakh Tutsis in Rwanda in 1994 was the fall-out of US-French conflict for control over the Great Lakes region (with its huge mineral wealth), where the US backed the Tutsis and the French/Belgians the Hutus. Later this genocide spread to Congo. It is now estimated that 4 million people were killed in the conflict in Congo, which started in 1997. (See BOX)

However, the growing economic crisis and scramble for markets and sources of raw materials is fueling a whole set of new political alignments which continue to remain fluid, due to the lack of a strong rival imperialist pitted against the US.

The main focus of the US was, first and foremost, to bring all the countries of West Asia to their knees. To some extent they have achieved this in countries other than Iraq, with Syria and Iran falling into place. So much so that Bush no longer talks of the Axis of evil. Syria, is to a large extent cooperating and is relatively silent. Iran has not only opened up its nuclear facilities, but also recognized the US-appointed INC (Iraqi National Council), entertained Chalabi in Tehran (one-time main US puppet, now sidelined for allegedly passing on secret information to Iran) and allied with the pro-US Shia leader, al-Sistani. Also, what has been most surprising has been the total capitulation of Gaddaffi to the US. After nine months of secret talks with the US/British, Libya has not only abandoned its nuclear programme, but also shipped the secret blueprints and components to the US, while inviting US oil companies back for exploitation of its oil resources. Gaddaffi also agreed to pay huge compensations to the families of those killed in the Lockerbie flight to victims in Britain and the US but has refused similar payments to those affected in France. With increasing attacks on oil installations in Saudi, the US is also keen to take direct control of oil production there, fearing greater inroads of Russia, China and Europe into Saudi oil production. For the present, only Kuwaiti oil is securely in Anglo-American hands.

In the international imperialist camp two new factors have come on to the agenda. First is the increased trade contention between the US and the EU and the attempts of the US to split the European alliance. Second, the relative re-assertion of Russia vis-à-vis the US, and as an imperialist power in its own right, in the light of its recent economic growth fueled by the high international prices of petroleum and gas.

The continuing stalemate at the WTO after Cancun is an indication of the severe rift between the US an EU on trade issues, particularly on agricultural commodity prices. For the first time ever, in March this year, the EU slapped sanctions on US goods when the US refused to retract its export tax breaks even after a WTO decision against it over a year back. This would cost US companies $315 million in 2004 and $666 million in 2005. The lower tax rates on exports by US firms including Boeing, Microsoft, etc. were judged as illegal by the WTO in 2002. Despite warnings by the EU the US has not bothered changing the rates, resulting in the present action. Further the EU imposed a record $613 fine on Microsoft for its monopoly practices in Europe.

In retaliation, the US in April, demanded the EU lift its ban on Genetically Modified crops and pay at least $1.8 billion in compensation for loss of exports over the past six years. Meanwhile, on June 1, 2004 the US has further pushed its arbitrary behaviour by ignoring the WTO stipulations and enhancing the subsidy to steel manufacturers. The US faces sanctions on potentially hundreds of millions of its exports because of Congress’s failure to repeal the Continued Dumping and Subsidy Offset Act after the WTO declared it as illegal. The programme known as the Byrde Amendment distributes money raised by anti-dumping duties on imports into the US.

Trade conflicts between the two are also hotting up in various parts of the world with each desperate to consolidate trade pacts with individual countries and/or groups of countries. With the US making deeper inroads into Africa, once considered France’s backyard, the EU has been making inroads into Latin America, always considered as the US’s backyard.

We have already seen US’s greater penetration in Africa in Libya, Rwanda and other countries. While in Latin America, the US is desperate to extend the Free Trade Agreement (NAFTA) between the US, Mexico and Canada to the whole of Latin America by 2005, the EU has pre-empted the effort by its own steps in the region. Negotiations for an EU-Mercosur (a customs area pact of major South American countries) Free Trade Area began in 2000. The EU has completed deals with Mexico (1999) and Chile (2002). With Mercosur discussions have advanced to complete a FTA by October 2004. As a bait towards this it was reported in May 2004 that the European Commission was all set to offer Mercosur access to the EU countries on more favourable terms. The quid pro quo is that Mercosur will stop pressing the Commission to cut its high farm trade barriers.

Of course a major sphere of contention is Europe itself. With the EU all set to expand into the east by May first, the US hurriedly pushed through NATO expansion in end March itself — just a month before the planned EU expansion. The latter was not only resented by Russia but also by the France and Germany for its unseemly haste. All the new entrants were part of Bush’s "coalition of the willing".

On March 29 Bush formally welcomed seven new members into the NATO fold — Bulgaria, Estonia, Latvia, Romania, Lithuania, Slovakia and Slovenia. In 1999 Poland, Hungary and the Czech Republic were included into NATO. NATO also plans to include Ukraine, Moldavia, Georgia, Uzbekistan and other Central Asian countries into its fold.

While the US is consolidating this military alliance the EU seeks to extend it trade grouping by extending the EU to East Europe. On May 1, 10 new members joined the EU, taking its number to 25 and making it the biggest trading block in the world. The countries include eight former Soviet states. The new entrants are Estonia, Latvia, Lithuania, Slovenia, Czech Republic, Slovakia, Hungary, Poland, Cyprus and Malta.

While Russia took serious objection to both these expansions the US proceeded arbitrarily while the EU negotiated with Russia. The EU’s expansion could cost Russia upto $600 million in lost trade yearly. Moscow laid down 14 conditions in its PCA (Partnership and Cooperation Agreement) with Europe in order to extend it to the 10 new entrants.

And so the tug-of-war between the two main imperialist powers continues. With some of the European countries all set to launch its new Rapid Action Force this year they will militarily begin the path of breaking free of US military domination exercised through NATO.

Russia has made it clear to the US that it considers the recent NATO expansion as an extension of US hegemony into Central-Eastern Europe. Humiliation mingles with fear as bases built by the Soviets are all taken bloodlessly from under Russia’s nose by NATO. The Russian sense of slight is accentuated particularly by the fact that Russia had extended support to the Western alliance by providing intelligence on Afghanistan and in establishing bases in Central Asia. Russia had also allowed the transit of NATO troops and military hardware across its territory to Afghanistan.

Now, though, after 5 years of economic recovery some of Russia’s big business companies have begun major investments abroad and are slowly growing to become Russian TNCs — particularly in the energy field, also in heavy metals. Some Russian giants that have made major forays are the oil & gas companies Gazprom, Tatarstan’s Tatneft Oil and Lukoil,; the electricity company UES (United Energy Systems); heavy metal companies like Norilsk (Nickel) and RusAl (Aluminium) and even the telecom company Sistema-Telecom.

In the first step Russia sought to win back the ex-Soviet countries. The UES has brought under its control four-fifths of Armenia’s hydro-electricity and bought up most of Georgia’s energy facilities. It has acquired stakes in electricity assets in Kazakhstan, is about to buy major stakes in 10 of the 27 Ukrainian energy companies, and plans to participate in the disinvestment of power assets in Moldova. In Kyrgzstan it has set up a joint venture for two huge hydro-electric plants.

Russia’s Gazprom controls practically all the natural gas flows to and from former Soviet republics. It has signed a deal to invest a huge $1.4 billion in energy in Uzbekistan, while Lukoil signed an accord for the investment of $3 billion into joint development of Kazakhstan’s oil and gas fields.

Russian trade with the CIS countries rose 30% last year. In a deal in April 2004, that will shock the US, Kazakhstan planned to increase oil exports to and from Russia from the current 20 million tones a year to 250 million tones a year by 2020. In other words Kazakhstan will pump all its oil through Russian pipes, making the US-pushed $3.6 billion BTC (Baku-Tbilisi-Ceyhan) pipeline a profit-losing project (as Azerbaijan does not have enough oil to fill the pipeline).

Russian investors control 80% of Ukraine’s oil refineries, practically all non-ferrous industry, a quarter of the privatized electricity companies, half of the cell phone operators and 30% of the dairies. Ukraine, which long rejected Moscow’s expansion, signed last September a common market pact with Russia, Kazakhstan and Belarus which envisions a customs union, free movement of goods, capital and labour, and unification of tax, monetary and foreign trade policies.

Lukoil has also entered Saudi Arabia with a tie-up with Aramco and Gazprom is the major natural gas supplier to the whole of Europe. Russia seeks to further set up a gas transport consortium that will consolidate Europe’s dependence on Russia for its energy needs.

With this growing contention for world markets the US has high stakes in Iraq. A defeat there can affect its bid for world hegemony considerably. Not only will it effect its control over the crucial Middle East oil, not only will it further effect the dollars hegemony with increasing influence of the Euro, but it can plunge its own economy into an even deeper crisis given its existing fragility. No wonder therefore it is resorting to the most brutal and inhuman means to suppress the Iraqi resistance. No wonder it is also seeking by all means possible to split the European alliance, particularly using Poland as its Trojan horse in the EU (having lost Spain). And now with Oil prices hovering over $40 a barrel economic chaos is a distinct possibility unless it is brought down. So fearful is the US of the future that it has been recently buying huge excess stock of oil in further preparations for wars and/or economic crash.

But, any setback to the US’s militaristic adventures will only make it more ferocious, more desperate to maintain its worldwide dominance. Countries like India, which have closely allied with the US Axis will be pressurized to open up their economies even more to the TNCs and forced into deeper politico-military alliances. The rival EU bloc’s influence is yet weak in this region and Russia is yet to regain its influence in the country. Though contradictions between the imperialist powers are bound to get reflected here, there is yet a long way to go for any real polarization of India’s compradors — US influence is predominant.

It is within this international scenario that one must view the possible line of development in India.

The focus of the new Congress government is clear when it appointed India’s top counter-insurgency expert as the special advisor to the Prime Minister in the PMO. It was openly stated that his focus will be on ‘internal security’ — i.e. the suppression of the people’s movements.

M.K.Narayanan, the new appointee, was a former director of the IB (for two terms) was currently vice-president of the think-tank Centre for Security Analysis and a member of the Expert Group on Counter-Terrorism. He was also chairman of the Joint Intelligence Committee and held the post of Secretary, National Security Council. He was also a member of the post-Kargil Task Force on Intelligence. He has had experience in dealing with the naxalite movement in the late 1960s, militancy in the NE and Punjab, the J & K problem, the LTTE issue and Operation Blue Star. He has been the point-man behind butchers like KPS Gill and other such cops in the anti-insurgency operations throughout the country. It will now be this most experienced operator who will run the Centre’s operations against the revolutionary and nationality movements.

This is quite obviously linked with the new government’s plans to continue the economic reforms resulting in greater and greater deprivation of the masses — and so the increasing danger of revolts. Take the present economic scenario of the country and you will find this to be an inevitability unless the government takes radical steps to curtail the crores being made by the elite of this country and from abroad. But the way Chidambaram went cringing before the moneybags in Mumbai is an indication of what is to come.

Take then the economic scenario that determines such oppressive policies. Economic reforms have, particularly in the last few years, resulted in a real "India Shining" for big business, foreign capital and their hangers on. But, on the other hand it has led to extreme deprivation for the majority, particularly the poor.

First let us look at the reality and then turn to government policy that facilitated this reality. Finally we shall see what are the economic policies necessary to bring in even an iota of reforms.

The latest ET 500 (of the top 500 companies in India) list of the Economic Times (June 2, 2004) shows that the net profits of the top 200 companies saw a huge jump of 40% in 2003 and 42% in 2002, though increase in sales was a mere 15%. Such massive increase in profits can only have come from squeezing the workers even more, a big increase in subsidies and tax cuts to them, low interest rates, etc. This is in spite of the fact that the top bosses of these companies have taken massive hikes in their salaries. Ambani’s Reliance was the first private sector company to make a profit of over $ 1 billion last year. His net profit jumped from Rs, 4,104 crores in 2002 to Rs.5,160 crores in 2003 — or Rs.15 crore per day. This is after they took salaries varying from Rs.7 to Rs.10 crore a year. There are 30 banks in the top 200 whose profits too have jumped by 40%. The State Bank of India is at number 4 with profits of a huge Rs.3,560 crores. Even the steel companies which were earlier doing badly have made big profits with Tata’s Tisco seeing a jump of 138% taking profits to Rs.1586 crores and the PSU SAIL’s to Rs.1,740 crores. A similar picture is to be seen for the car, chemicals, cement, IT, and all other major industries. In just the five years from 1998/99 to 2002/03 the ET 500’s percentage of gross value added to the GDP increased from 11.5% to 13.8%.

So big business has made huge money. Then if we turn to out Members of parliament, according to a Times of India survey (May 30, 2004) they get an average yearly salary of Rs.31 lakhs each — and this does not include the Rs.2 crore given to them yearly for their constituencies and the lakhs made though corruption and deals. For them too India is shining. MLAs would cost nearly as much, and recently the UP government doubled the salary of its ministers. Vajpayee ordered six super BMW cars, each costing Rs.1 crore — all from public funds — but he says there were no funds to increase the food subsidy for those dying of starvation. In the very elections an estimated Rs.10,000 crores was spent and not even a petty leader went to destinations except by helicopter.

Now if we look at the other side chronic poverty stalks the countryside and the vast urban slums. Even if one takes the doctored official figures roughly 30 crore people live in chronic poverty. Another 40 crore are just a little better. Thousands of farmers each year are resorting to suicide. In UP alone sugarcane farmers have arrears of Rs.2,000 crores due to them. According to the latest National Family Health Survey (1998-99) half of all children are malnourished and half of all adult women suffer from anaemia; 30% of all children under age of 3 had fever, anther 20% had diarrhea, and another 20% had symptoms of acute respiratory infection. 4 During the entire period from 1997/98 to 2002 /03 the rate of growth in agriculture was just 1%. The number of agricultural labourers increased from 2.7 crores in 1951 to 10.7 crore in 2001. Half the rural population had less than one acre of land and another 19% had less than one hectare (2.5 acres). 5 In other words roughly 75% of the rural population (or 55 crore people) eked out an existence on less than one hectare of land. In most of the slums in the urban areas peoples living conditions was often even worse — and in a city like Mumbai half the population live in slums.

Take Dharavi in Mumbai. Billed as Asia’s largest slum, it is home to maybe a million human beings. In official reckoning, there are almost no poor people here. As of September 2003, there were only 128 Below Poverty Line ration cards serving just 740 people in this giant slum.

In the early 1960s, 51 per cent of jobs in Mumbai were in the organised manufacturing sector, where workers had permanent employment and assured benefits like leave and provident fund. Today about 65 per cent of Mumbai’s workforce works under contract.

Now it is these two worlds that face each other in a country like India. Policy cannot support both rich and poor as the CPM would have us believe saying that they "support economic reforms with a human face". It is a simple matter of arithmitics — with a large fiscal deficit of 10% in the State and Centre’s budget where is the money to come from to give policy a human face? Unless the huge subsidies to big business are curtailed, and tax on their gigantic profits increased where will the funds for the poor come from?

To take just one example: exemptions on excise and customs duties alone amount a massive Rs.60,000 crores6. This is a massive sop to big business, but will the Congress government have the guts to cut this exemption and give it instead to the poor of the country?

Also as a ratio of GDP public expenditure on health in India is amongst the lowest in the world at about 1%. Only 15% of the total health expenditure is public — in East Asia it is 40%, Latin America 50% and Europe 75%. Will the government divert funds to public health and eradication of diseases like malaria and TB which are now at epidemic levels? To give disease control a ‘human face’ massive investment will be necessary and the huge profits of the pharmaceutical companies drastically curbed. This is totally unthinkable by the new power brokers.

Take then the devastated rural population — ie. not only the poor and marginal farmers who eke out a hand-to-mouth existence, but now even the middle and rich farmers who have been devastated by WTO policies. Is the government willing to act? Public sector investment in agriculture has come down from 14.1% in 1981/82 to 4.9% in 2000/01. The share of agriculture in Gross Capital Formation has come down from 10.8% in the pre-reform period of the 1980s to 7.6% in the post-reform period of the 1990s. Is the government or the CPM willing to hike corporation tax and tax on high incomes, re-introduce capital gains tax, reduce export subsidies, etc etc to get the requisite funds for greater public investment in agriculture? Are they willing to instruct the banks to once again introduce preferential loans to the primary sector even if it entails a small drop in their burgeoning profits? The disbursement of credit to small farmers has dropped from 15% in the 1980s to 11% in the 1990s 7. Similarly direct disbursements to marginal farmers fell from 18% to 13%. But the Congress talks of further privatization of the financial institutions which will result in them falling into foreign hands and then even this small amount of institutional credit to the rural poor will dry up. Already pushed into the clutches of the rapacious moneylender, such policies will further the hold of the moneylender. According to the Gupta Committee farmers already rely now more on moneylenders whose rate of interest lies between 40% and 60%.8

Rural development expenditures, which averaged 14.5 per cent of gross domestic product (GDP), during 1985-90, before reforms, were reduced to 8 per cent of GDP by the early 1990s as part of the deflationary policies advised by the Bretton Woods Institutions (the World Bank and the International Monetary Fund). Since 1998, they have been reduced further, averaging less than 6 per cent of GDP and in some years falling to less than 5 per cent. In real terms, there has been a reduction of about Rs.30,000 crores annually in rural development expenditures on average during the last five years, compared to the pre-reforms period. If we assume a plausible value of between 4 and 5 for the Keynesian multiplier, this means a drop in incomes in agriculture annually to the tune of between Rs.20,000 crores to Rs.150,000 crores - a massive contraction indeed. This order of income fall, combined with real income declines owing to other causes, is broadly consistent with the observed fall in the contribution of agriculture to GDP during the 1990s, from around one third to barely a quarter at present.

Then we come to the question of the PDS (Public Distribution System) of cheep foodgrains to the poor which has all-but collapsed under the BJP dispensation. Offtake of PDS foodgrains has dropped from 20 million tones in 1996/97 to a mere 12 million tones today — that too the bulk of these reaches the hands of unscrupulous traders due to the complex mechanisms set of BPL, APL and the Antyodaya Anna Yojna schemes.9 On this there is not a word mentioned in the CMP. The earlier government exported wheat at BPL rates but was not willing to give these to the drought-stricken millions.

There was a slow decline in the absorption of foodgrains per head between 1991-92 and 1997-98, after which it has fallen very sharply, from an average annual level of 174.3 kg in the three-year period ending in 1997-98, to only 151 kg by the pre-drought year 2000-01, an abysmally low level last seen during the early years of the Second World War, which included the years of the terrible Bengal famine. Thus, by 2000-01 the average Indian family of four members was absorbing 93 kg less foodgrains, compared to a mere three years earlier — a massive and unprecedented drop, entailing a fall in average daily intake by 64 grams per head, or a fall in calorie intake by 256 calories from foodgrains (which accounts for 65 to 70 per cent of the food budget of the poor). There is nothing in the CMP to reverse this.

Then take the question of unemployment which is one of the most serious problems facing today’s youth. Economic reforms have particularly had a devastating impact on employment generation with lakhs being thrown out of jobs and an entire generation forced to seek temporary and insecure jobs. During the last six years 8.4 million people have come of employable age every year, but less than 3 million have found jobs of any kind. None have found jobs in the organized sector of the economy. The sizable presence of the unorganised sector in manufacturing is evident from its massive increase from 28% of the total in 1993/94 to 39% of the total in 1999/2000.10 In the organised sector the total employment has been falling steadily since 1999 and the rate of decline has been accelerating. Since 1990 the annual average increase in employment was under 1.2 lakhs per year. And in the organized sector employment declined from 282.5 lakhs in 1997 to 280 lakhs in 2001.11 The reason why there are no jobs is that there is no industrial growth, and what little that may be there is capital intensive with more and more jobs being contracted out. The drought of private investment has been compounded by even greater decline in public investment. This lopsided growth is reflected in the fact that in the year 2002/03 manufacturing exports accounted for close to 53% of manufactured output. 12.

In fact even in agriculture growth in employment saw a sharp decline in the 1990s. In agriculture and allied sectors it came down to 0.01% in the 1994-2000 period, compared to 1.43% in the 1983-94 period. Even in the employment schemes of the government in the last year there was a drastic reduction in the food component of the scheme from Rs.5,267 crores last year to a mere Rs. 775 crores in 2003/04.

Besides no economy can sustain when agriculture accounts for two-thirds of the workforce and a mere 25% of the GDP. In other words there has been development, where nearly 75% of the GDP comes from manufacturing and services — but this ‘development’ has not been able to absorb the displaced rural populace. So, oasis of growth takes place in a vast desert of backwardness.

Now what formula does the Congress and CPM have for this key problem of the masses — UNEMPLOYMENT. How do they plan to give a human face to the problem of unemployment if they plan to carry on the policies of economic reforms? Besides even those who are employed are in a much worse condition than they were before. Over the period 1981/82 to 1999/2000 the share of workers’ emoluments in net value-added declined by nearly 16% from 46.7% to just 30.8%. This was primarily due to a steep decline in the wages component in emoluments from 30.3% to just 18.1%. Conversely profits/rent/interest share rose from 47.1% to 61.8% in the same period. 13. The gigantic increase in profits of the ET 500 is to be seen from this fact, the corresponding fact of workers’ destitution is ofcourse ignored by such newspapers. Yet, under economic reforms downsizing, wage cuts, contracting, pension cuts, etc continue unabated without any "human face".

So the problems of employment, agricultural development, working class rights and living standards, social welfare and health care, minimum necessities of life like good drinking water, sanitation, electricity, etc — are the issues facing the bulk of our people. Is the new government, with the ‘Left’ in tow, going to really address any of these? That is impossible unless they reverse the process of economic reforms. But the entire new dispensation, including the CPM, has been going out of their way to say they are not against reforms. And to prove their credentials have begun taking steps in that direction within the first few days of coming to power. They seem more enthusiastic to please their financers than those who voted them to power.

But if the Congress is not much different why the euphoria? Some liberals even went to the extent of calling it "liberation". Their hatred for the BJP was so strong that anything seemed to them better than the Hindutva fascists. This may be partially true but that should not blind us to the reality of the other political formations. The reason for such false hopes is that the people’s movements against the fascists are as yet weak, so the liberal tends to cling on to any straw of hope.

The real question before us is that economic reforms is intertwined with the international imperialist policies of globalization and imperialism’s, particularly US imperialism’s, rapacious drive for markets and sources of raw materials. The two cannot be separated. An attack on ‘economic reforms’ is necessarily linked to an attack on imperialist policy. None of the parliamentary formations in the country are prepared for this. In fact, because of their comprador character they act as servile tools of the imperialists, getting fat commissions with which they sustain themselves and grow. Through these links the big business community thrives, top bureaucrats and politicians get huge commissions and much of the top elite are linked through thousands of visible and invisible threads to the imperialists. Today, even ‘dissent’ is imperialist sponsored through the lakhs of imperialist-funded NGOs sprawling all over the country.

So, today any reversal of economic policies, however minor, requires taking on the imperialists and inviting their displeasure — particularly that of the US. And for this, is Iraq and Afghanistan not a warning to all? Today with the Bush formula of "those not with us are against us" operating, nothing but total lackeyism is tolerated as witnessed in Haiti and also the coup attempted in Venezuela.

So, what is bound to continue is what already existed with small changes particularly around the question of aggressive Hindutva. All else will remains as before. Peoples’ condition will continue to deteriorate further, the moneybags will thrive even more. And Hindutva will in fact be pushed even more aggressively — only now, not from the treasury benches but from the opposition.

In this scenario what then is the alternative?

When we begin to consider an alternative it is necessary to have a cold, objective look at the reality and the forces at play in the country and world. It does not help to avoid uncomfortable facts to create false hopes and illusions. One must not only look at the reality in its crude nakedness, but also the forces behind it which are the chief driving factor for what is easily visible. For over half a century the people of our country have been fed with one false hope or another. In 1947 we thought we had achieved freedom and now all would prosper. That turned out false; the imperialist grip continued, though in a new form; the poverty of the masses continued as before. Then came the euphoria of Indira Gandhi’s "Garibi Hatao, bank nationalization and the end of privy purses to the Rajas" — again many were duped into thinking a new era had dawned, including the then CPI. So also after the Emergency a hope was ignited in the so-called Janata formation; that collapsed within two years. And so the hopes and despair are repeated again and again. Each time peoples’ anger against a more horrendous force makes a lesser monster look like a fairy. So at the time of 1947 in comparison to the British, their agent and comprador, Nehru, looked beautiful. In the 1960s, compared to the Swatantra/Jan Sangh reactionaries, Indira’s Garibi Hatao looked attractive. The horrors of the Emergency kindled great hopes in the Janata in the mid-1970s. And now once again, the terror raj of the BJP mafia, with their Gujarat pogroms and crude Hindutva fascism, makes the Congress look like an angel in comparison.

But, the reality has always, time and again, told another story. Disillusionment soon sets in, and with it comes cynicism and a sense of hopelessness. The reason for this is not to see events objectively and the driving forces behind it. No doubt, one of them may be better than another in a given set of situations, but that is not the whole reality. It can be compared to the difference between a highly venomous snake and one with less poison. But both are poisonous; that understanding is fundamental, their shades of difference are relative. If one starts playing with the less poisonous ones with great hope, one can be in for severe trouble.

But given this reality is it not better that the two snakes continue to fight each other, rather than gang up against us. Of course it is. Their fight though, is not dependent on us, but intrinsic to the very nature of the system, wherein ruling class contradictions intensify at times of crisis in the economy and the system. We, must of course use it to our advantage, but not fall into the trap of one or the other. The euphoria over BJP defeat is understandable, for it punctures the arrogance of a venomous, vicious, treacherous and ruthless political entity. But much hope in the Congress/CPM/CPI combine is illusory.

Such illusions are particularly fueled by the fact that people do not see any other real alternative. And the Congress gets more creditability due to CPI/CPM ‘Left’ demagogy. Though, in West Bengal, they may be faithfully implementing all World Bank policies, unleashing terror on all opposition and also torturing and killing naxalites in fake encounters, they maintain their aura of ‘progressiveness’ amongst a section of the intellectuals — particularly those not from West Bengal. So, ‘Left’ support to the Congress gives the latter greater legitimacy, adding to the illusions even further.

But it is true that, as yet, there is no observable viable alternative in the country. But, such an alternative does not fall from heaven; it has to be created through painstaking work. There is no quick-fix formula which the intellectual often hopes for. The question then before us is what is the nature of the alternative that needs to be created. Many years back the Liberation group formed the IPF (Indian People’s Front). But soon, that party went into the parliamentary pig-sty and the IPF disappeared from the scene.

To get grips with the alternative it is necessary to see which are the forces capable of building such an alternative and, as to what the polices of that alternative should be. Firstly, there are the revolutionaries, the Maoists, who are the most consistent fighters against this rotten system. They are leading a people’s war in the country. In a way they are the real alternative to the existing system. But, they exit only in certain pockets, what is needed in addition, is countrywide alternative. Then there are a wide spectrum of progressives, democrats, anti-imperialists and a host of others opposing some aspect of the system that particularly affects them. It is all the above forces that need to be united into a common front — which is consistently anti-imperialist (i.e. attacking not only their policies being pushed in India but also their policies abroad), against Hindutva fascism, against state repression and supporting all the struggles of the rural people, where the bulk — 70% — of our population live. Such an alternative must avoid getting involved in the electoral trap and build a true people’s movement from the grass-roots. While firmly standing by the oppressed in the country such an alternative must also stand steadfastly with the people of the world struggling and fighting against imperialism — today, it particularly means the people of Iraq, Afghanistan, Palestine and other countries throughout the world.

Today there may be no concrete alter-native; the point, however, is to build it.

1. Frontline, April 9, 2004

2. Economic Times, June 3, 2004

3. Fortune April 12, 2004

4. The Hindu March 13, 2004

5. Alternative Economic Survey 2002-03

6. Economic Times June 2, 2004

7. RBI Report on Currency and Finance 2001- 02

8. Economic Times, June 2, 2004

9. Alternative Economic Survey 2002-03

10. Alternative Economic Survey 2002-03

11. Alternative Economic Survey 2002-03

12. Economic Times, April 30, 2004

13. Alternative Economic Survey 2002-03

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