Left conspiracy to block social spending
The recent veto by the comrade commissars of the Communist Party of India-Marxist (CPM) of a modest proposal of the United Progressive Alliance government to disinvest 10 percent of the Union government’s 68 percent equity stake in the navaratna Bharat Heavy Electronics Ltd marks another low in the history of the Indian Left.
Undoubtedly the learned comrades of the CPM politbureau are well aware that the aggregate fiscal deficit of the Centre and states is running above the danger mark of 10 percent of GDP and that burdened with the high costs of (mal)administration there’s no money in the exchequer to fund social sector, i.e education and health, expenditure. But despite marxist intellectuals who are behind the squelching of this Union finance ministry proposal generally professing atheism, they seem to believe that the funding required to scale up national outlays for education and health (currently a miserable 4 and 0.9 percent of GDP) will fall as manna from heaven.
Experts in the art of mouthing empty pro-poor rhetoric in the media and elsewhere, the CPM-led Left alliance of parties bagged an unprecedented 66 seats in the Lok Sabha in the May 2004 general election. This unexpected groundswell of support has transformed the comrades of CPM politbureau into a make-or-break force for the ruling UPA government led by the Congress party (145 seats) which it supports from the outside.
Yet despite revolutionary rhetoric, in actual fact India’s communists have a dismal record in supporting progressive causes. It is appropriate at this juncture to recall that in 1942 when the Mahatma launched the Quit India movement against the British raj, the Communist Party of India on the command of Comrade Stalin, opposed it. Later after independence, when the Chinese communists began incursions into Indian territory in the north-east, a CPM polibureau statement famously declared that Chairman Mao (recently outed as perhaps the most callous mass murderer in global history) was its chairman as well.
Following the split in the ruling Congress party in 1969, the communists lent outside support to prime minister Indira Gandhi and prompted her to take the disastrous decisions of nationalising India’s major banks, packing the Supreme Court and creating a subservient ‘committed bureaucracy’ — initiatives which destroyed India’s institutions of governance, perhaps irrevocably. Simultaneously, mouthing borrowed populist ideology the comrade commissars of the communist parties uncorked the genie of militant trade unionism within the organised sector of the Indian economy which employs a mere 10 percent of the nation’s labour force, creating a pampered low-productivity labour aristocracy — specially active within the government and public sectors — which is a crushing burden on the Indian economy.
If despite this dismal track record in the May 2004 general election the CPM and its allies were able to bag an unprecedented 66 seats in the Lok Sabha and hold the ruling UPA government to ransom, it follows that the liberal economic policies of the Congress which have almost doubled annual rates of economic growth have not impressed the electorate. As brilliantly argued by Nobel laureate economist Joseph Stiglitz, high annual rates of economic growth are not necessarily beneficial to the poor majority. Unless pro-poor policies, especially in education and healthcare are consciously crafted and rigorously implemented, high annual rates of economic growth can accentuate the rich-poor gap in developing countries. By blocking the flow of investment into social sector initiatives, the Indian Left whose Soviet-inspired economic prescriptions bankrupted the Indian economy until 1991, is conspiring to reap another electoral bonanza from its own failed prescriptions.
Unwarranted banking complexity in rural India
Rampant injustice and oppression of the poor and socially disadvantaged in rural India has become a depressing staple of bulletins beamed round the clock by the country’s multiplying 24 hour news media. Hardly a day goes by without recitation of one of many millions of horror stories which makes a mockery of the high-sounding Constitution of India and the republic’s claim to be a nation governed by rule of law.
The other day a news channel broadcast the poignant story of an Andhra farmer whose wife was kidnapped and killed because he was unable to repay a debt of Rs.10,000. A few days earlier came the horror story of a Muslim housewife raped by her own father-in-law being ordered by a self-appointed court of village elders to divorce her husband and become his mother, without any retribution being visited upon the depraved in-law. And everyday stories of impecunious farmers committing suicide because they are unable to repay loans due to crop failure (often because they are palmed off spurious seeds or pesticides) have ceased to shock the hardened conscience of middle class India engaged in an orgy of conspicuous consumption.
But while these grim stories are dutifully reported, the deeper reasons behind them are glossed over by the media. The phenomenon of runaway injustice in village India is indicative of the failure of the country’s nationalised banks and collapse of the law, order and justice system.
The obstinate affluence of private moneylenders and loan sharks in rural India which has defied all government efforts to drive them out of business, is directly connected with the persistent reluctance of managements of public sector banks to undertake more than token lending to village India. To this end nationalised bank managements have made banking operations so paper-intensive and complex that they effectively shut out the overwhelming majority of insufficiently educated rural citizens. In the circumstances it is hardly surprising that the great majority of farmers and artisans prefer to avail the banking services of usurious moneylenders who demand minimal paperwork.
The calculated neglect of nationalised banks to provide credit on a meaningful scale to the rural majority is compounded by the non-existent and/or thoroughly compromised law, order and justice system in the rural hinterland. Consequently the goons and musclemen of loan sharks and moneylenders have unlimited freedom and licence to visit unspeakable cruelty and punishment including kidnapping and enslavement of wives and children upon defaulting debtors. Hence the rising toll of suicide deaths in a growing number of states across the country.
There is a tacit conspiracy between bank officials and moneylenders in rural India which needs to be squashed. Simultaneously law, order and justice systems in heartland India need to be made more effective. As is being amply demonstrated in neighbouring Nepal, denying the benefits of economic liberalisation and rule of law to the rural majority are acts of omission which could endanger social order as we know it.