The chatterati is busy debating the Congress decision to strip feudal royal titles that continue to be used by many of its leaders. The fact that this has come nearly four decades after the abolition of the privy purses is in itself a testimony of the pervasive feudal influences that dominate our polity. A fellow columnist has coined the term ‘durbar democracy’ which also captures the growing dynastic manifestations cutting across party lines, except for the Left.
While this has been widely noted in the media, a new contradiction of substance is unfolding with UPA II assuming office.
This is the contradiction between the professed concerns for the aam aadmi and the pursuit of neo-liberal economic policies. On the one hand, there are reports that the Prime Minister has asked the Finance Minister to emphasise the concern for the aam aadmi in the forthcoming budget. On the other, India Inc has been actively urging the Finance Minister to proceed on an unbridled course of neo-liberal reforms.
Gleeful at the fact that the government now does not require the support of the Left, India Inc is asking for large-scale disinvestment of the public sector and legislate on financial sector reforms, which the Left had prevented UPA I from doing (privatisation of pension funds, allowing greater equity for foreign investment in the insurance sector, and allowing foreign banks to virtually take over Indian private banks). Needless to say, very soon cries for full convertibility of the Indian rupee will surface.
India Inc simply cannot accept the reality that unbridled financial sector reforms, in the first place, have laid the foundations for such a gigantic economic collapse and meltdown leading to a global capitalist recession. The World Bank has estimated that 2009 would be the “first decline in world output on record”. It has now revised the decline in the global economy from an earlier estimate of -1.7 per cent to -3 per cent. “Waves of economic pain continue to hurt the developing world’s poor,” said World Bank President Robert Zoellick.
India Inc also cannot simply accept the fact that the pro-people policies pushed by the Left with the last UPA government and the reforms that it stalled, significantly contributed towards its victory. Much comfort is being drawn by the fact that India has seen a growth in private and governmental consumption expenditures of nearly 5 per cent of the GDP in the first quarter of 2009, compared to the first quarter of 2008. We were, indeed, fortuitous that the general elections, accompanied by unprecedented use of money power, came at this time. The monies directly transferred to people were substantially larger than any stimulus package that the government could have offered. As this is a one-time growth in expenditures, this trend cannot be sustainable.
The unfolding of the contradiction is expressing itself in different ways. Commerce Minister Anand Sharma, on the eve of his departure to Washington to attend the US-India Business Council summit, told Reuters that “the impasse has been broken” over the World Trade Organisation’s long continuing Doha round of trade talks. There were various reasons that led to this impasse in July 2008. The disagreements relate to Non-Agricultural Market Access (Nama) and, importantly, on agriculture.
The issues of domestic support and export subsidies are contentious between the developed and the developing world. But what really broke the talks was the dispute over a special safeguards mechanism for agriculture.
This is a very serious issue as far as we in India are concerned. Unless these safeguards are firmly negotiated, we shall be exposing our farmers to ruination in the face of unbridled access given to the developing world to dump their highly subsidised agricultural products. Surely, the concerns for farmers’ distress suicides and the granting of loan waivers cannot be accompanied by succumbing to the pressures of the developed world by making our agricultural sector completely defenceless.
A few days ago, the Cairns Group — 19 countries accounting for more than 25 per cent of world’s agricultural exports — met with a fresh resolve to conclude the Doha talks that began in 2001. Both the US and Indian Commerce Ministers were invited to participate as observers. India had earlier objected to inadequate safeguards for Indian farmers, which found support from a large number of developing countries, which led, among other factors, to the impasse in the first place. Now, our Commerce Minister has offered to host a ministerial conference in India to break the impasse.
With the global recession intensifying, the developed countries would seek their way out of the crisis by adopting protectionist measures domestically and seeking to prise open the markets of the developing world to receive their exports.
This can only spell ruin for our people.
Thus, the manner in which this contradiction between the avowed concern for the aam aadmi and the pursuit of neo-liberal economic reforms will unfold will determine the future of India and the livelihood standards of its people. UPA II cannot run with the hares and hunt with the hounds...
Sitaram Yechury is CPI(M) Politburo member and Rajya Sabha MP