Editorial - July 2005

People's Forces Must Unite Now!

The problems and rewards of unity of political activists, especially those inspired by a vision to make this world more humane and more democratic, came alive in the US in March when Narendra Modi's visa spectacle unfolded.

On the one hand, people's activism forced the issue of Modi's culpability in the Gujarat Massacre of 2002 to take centre-stage in India and abroad. On the other hand, the US timed itself well to silence any opposition from the people's forces as Secretary of State Condoleeza Rice made a push to tie India and South Asia further to the military machinations of the US through oil pipeline diplomacy, weapons sales and the US promise "to help India become a major power".

One conclusion that must be drawn is that such "opportunities" must be denied in future. The time is ripe to organize and unite people's forces against next such "opportunity" that will certainly coincide with Mr. Bush's planned visit to India in December 2005. Mr. Bush's visits to other countries have met with opposition and this will happen if he goes to South Asia.

Looking deeper, people's forces must come together and build one united movement that will oppose war preparations, war, state terrorism, communal violence, neoliberal globalization etc. as an integral component of the proactive struggle for the affirmation and realization of rights, prosperity and security of the peoples. The chance to set such an agenda now to unite people ahead of Manmohan Singh's visit to the White House on July 18th must not be missed!

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Agrarian Sector Taking Center Stage in Indian Economy

/N.TALWAR
One of the key features of the current economic discourse in India is the importance of agriculture. Agriculture is not only appearing as the sector that provides food and raw materials for industry but is also redefining the consumer spending of the rural households and in turn driving the manufacturing sector. Agro industries and food processing are the hub of entrepreneurial activity of small capitalists as well as big business houses and multinationals. Financial sector, farm input sector (fertilizer, tractors and combines, seeds and pesticides etc.) and traders are looking for opportunities to expand with an expanding agrarian sector.

In his speech to the joint sitting of the budget session of the Parliament last February, President of India said:

Rural India should be seen as a growth engine and public investment is required in the area of rural infrastructure to unleash its growth potential. My Government proposes to undertake a major plan for rebuilding rural India called “Bharat Nirman”. This will be a time-bound business plan for building rural infrastructure in the areas of irrigation, roads, housing, water supply, electrification and telecommunication connectivity.

He was followed by the Finance minister, who, in his budget speech announced that 80bn rupees ($1.8bn) will be spent on building rural infrastructure and flow of funds to agriculture will be increased by 30%.

The approach the government of India is taking towards agrarian sector was eloquently summarized by Prof. Jeffrey Sachs of Columbia University who wrote on the eve of the budget session in February 2005 as follows:

The government (of India) should not be running industrial companies or hotels or banks and insurance companies. But if you turn to agriculture, there is no doubt in my mind that the government has a role in promoting basic scientific research in improved crop varieties, biotechnology, in helping agricultural expansion so that farmers get the information they need in order to adopt modern technology. Governments have a role in liberalizing markets and helping ensure that India's competitive farmers have access to foreign markets, in providing basic rural infrastructure, such as roads to villages and electrification.... The advancements in health and education, in rural infrastructure and agricultural productivity that are being talked about right now aren't concessions to a left wing agenda or a painful compromise. These were investments that should have been made in the last ten years but weren't made".

What is most striking is that land ownership, especially by the tillers, is no more broached in the discussion of agrarian question by the government, the UPA partners or the policy advisors. The entire agrarian question is presented as if capitalist ownership of land is a fait accompli and growth is the only objective. Input costs and labor costs are the variables to produce agricultural goods for the market. President's "Bharat Nirman" announcement, his "Vision 2020" blueprint, Finance minister's budget proposals and policy statements place major emphasis on input to capitalist agriculture. Irrigation, electrification, fertilizer and pesticide, information technology to aid soil-nutrient and water management, climate modeling etc. are presented as input costs to improve farm productivity and state is called upon to bear these expenses, akin to public sector paradigm of the 1950's India. Food processing, cold storage, transport, etc. would help agricultural output to be market driven and private-public investment in these areas are being proposed. The state is taking up new taxation policy, including VAT to create an integrated market and also pay for the state investment. Rise of capitalist monopolies in wholesale and retail trade is already underway and the policies are meant to accelerate that process as well.

Closer scrutiny of farm income and farm productivity around the country shows that ownership of the land by the tillers is far from a closed chapter in India. In fact, those areas of the country where land distribution problem has been addressed to some extent (see article on West Bengal in this issue), there has been an increase in farm productivity and vice versa. Where outright capitalist farming has been adopted, such as in Punjab and AP, the farm sector has lagged in profitability behind the non-farm sector, causing new investment to dry up and affect productivity.

Wherever tiller has gotten possession of the land he or she tills, productivity gains have been accompanied by new capital infusion as well as intensification of labor of the land proprietor. The surplus value generated through the intensification of the labor of the tiller has become the main reason for his or her increased indebtedness. Agricultural input owners, lending institutions, traders and governments (though tax policy) have stepped up their demands for a share of the wealth produced by the tiller because of any gains in productivity. The surplus generated by the agrarian sector has once again become a major component of the domestic capital accumulation (reflected in the national savings rate) on which Indian industrialists and big business houses are basing their ambitions for world power status.

It is important to recognize that it will be in the interest of the farmers and rural farm workers to stop this integration of agriculture to market mechanisms and "growth" as it will deepen their exploitation by the agro-monopolies and agro-financiers. The rural households, who have not yet succeeded in throwing off the oppression by landlords, will be ruined further by the demand of capital to transform not just the agricultural produce but the families engaged in agriculture to commodities, stripping them of the ability to even resist such onslaught because of lack of any organization in the villages. Already farmers suicides are on the rise and only one can imagine what will happen when crop failure due to water scarcity or unexpected pest attacks could expose entire regions of rural India to capital's mercy. In fact, it is in the interest of all the people of India to take a stand against this approach to agriculture and insist that productivity increase be tied up with the solution of the land ownership question first..

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Agrarian Question in India III

Contradictory Trends in the W.Bengal Economy
/K.C. DEV
According to statistics released by the government of India, average increase in domestic product for the last 10 years has been highest in West Bengal. A 7.1% annual rise of domestic product for West Bengal is ahead of Karnataka's 6.4%, Gujarat's 6.1% or Haryana's 5.8%. The average income in W. Bengal has grown at a rate of 5.5% in the same decade, the fastest in India. Farm output in W. Bengal has increased at a rate of 5% in the past year, again the fastest in India.West Bengal's employment growth has been less spectacular.

Only 70, 000 jobs were created in that state through 1991-2004 following liberalization and privatization. The same statistical data puts the amount of private industrial investment flowing to West Bengal at 27,000 crore rupees in the 13 year period. In contrast, Gujarat created 1,40,000 new jobs with almost the same amount of new private capital inflow and Maharashtra added 1,50,000 new jobs with less new private capital inflow. Government statistics puts the current number of unemployed in West Bengal at 7 million. The pattern of investments have been capital intensive and according officials, some new investors have even imported captive workers from other states and kept them within factory walls, "even chaiwallas outside these plants do not get any business because the workers can't come out."

According to West Bengal's finance minister, Mr. Asim Dasgupta, rural West Bengal spent 17,000 crore rupees in 2004 on non-farm goods and services, driving new consumer product companies to spring up. Urban consumption has also risen. Kolkata boasts to have India's largest Pizza Hut franchise and top-ranked Sony world franchise. The government is on a drive to attract even more investment from domestic and foreign capital to build new malls, airports and other infrastructure. According to government leaders, economic investments have been driven by consumer demands, especially rural demands. They point out that tillers in West Bengal own 80% of the farm land, compared to 85% of the tillers owning only 33% of the farmland on an all-India basis. This has led to high gains in land productivity and consuming power of the tillers. Grain production has given way to rising production of vegetables, potatoes, mangoes, pineapples etc. Cold storage facilities and transport facilities to store and move fruits and vegetables efficiently is attracting investments from food processing industries like Pepsi, Dabur and other firms.

West Bengal's leaders are hoping to develop West Bengal's industry and economy to be a hub to service Bihar, Jharkhand, Orissa, the north eastern states and even Myanmar, Bangladesh, South-East Asia and China - a sort of India's gateway to the Far East and China. It is a dream to repeat Robert Clive's road-map to conquer India and Asia from Kolkatta, still on the basis of rural Bengal! The irony is that colonialism created the working class who, together with farmers and peasants, is destined to shape that future.

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