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It’s two steps back

The UPA 2 is implementing neo-liberal economic reforms and promoting crony capitalism. This goes against the UPA’s professed concern for the aam aadmi. Sitaram Yechury writes.

columns Updated: Nov 20, 2011 11:36 IST
Sitaram Yechury
Sitaram Yechury
Hindustan Times

The photo opportunity on the occasion of the second anniversary of the UPA 2 government showed the striking contrast with UPA 1. From the original UPA 1 constituents and outside support by Left parties, only the NCP and a beleaguered DMK are in the government.

The contrast, however, goes beyond the ‘photo-op’.

The UPA 1 government was formed in response to the needs of the country and people at that time; to protect the secular fabric of India and secular democratic content of our public institutions that were being eroded and undermined by the BJP-led NDA alliance, then in power for six continuous years.

The UPA 1 adopted a pledge which stated: The United Progressive Alliance pledges to provide a corruption free, transparent and accountable government and a responsible and responsive administration.” It adopted a Common Minimum Programme (CMP) that formed the basis for the outside support by the Left parties.

The UPA 2 now appears all set to systematically demolish the spirit and the declared content of UPA 1. It is abandoning even the pretext of the concern for the aam aadmi in order to facilitate the unbridled implementation of neo-liberal economic reforms, promoting crony capitalism and mega corruption.

The prime minister, expectedly, highlighted the economic achievements of the last two years — annual growth rate of 8.5% — terming it as a “historic performance”.

“We have pursued a strategy of seeking ‘inclusive growth’ at home and ‘inclusive globalisation’ internationally that benefits the have-nots and reduces disparities of income and wealth.”

There could not have been a more cruel joke. Over the last two years, the number of US dollar billionaires in India has increased from 26 to 52; now standing at 69. Their combined asset worth is equivalent of a third of India’s GDP. On the other hand, 77%, or more than 80 crore, of our people survive on less than R20 a day.

The vulgar disparities of income and wealth are sharply widening.

The PM’s blueprint for the future is more worrisome. He says: “Our most immediate challenge is to sustain the growth process, while keeping inflation under check.” In order to do this, he speaks of various dimensions of sustainable economic growth. The most important dimension that he highlights, however, is the “fiscal challenge”.

Stating that the massive fiscal stimulus programmes that his government undertook during the last two years have helped maintain reasonable economic growth, the PM now speaks of the urgency to reduce “fiscal and revenue deficits”. Simply put, this means that the government must reduce its expenditures while increasing its revenues.

The former means that whatever little that is being spent in the social sectors towards improving people’s welfare will sharply decline. The latter means that greater burdens would be put on the majority of our people through higher prices.

This is, clearly, a replication of how global capitalism is seeking to emerge from the global recession. The huge stimulus packages in developed countries have succeeded in bailing out those very financial corporates which caused the current crisis in the first place. The governments have borrowed heavily to finance these stimulus packages.

Now, in order to meet the costs of such borrowings, they are sharply reducing governmental expenditures by imposing unprecedented burdens on the workers. Capitalism’s logic for emerging from the crisis is by converting corporate insolvencies into sovereign insolvencies.

The net result is a sharp rise in the burdens on people against which widespread popular protests are erupting all over Europe.

The PM seems to be preparing us in India to go through a similar process. The current discussions on long-promised food security highlights this eloquently.

In the ongoing proceedings on a public interest litigation before the Supreme Court, the Planning Commission has impleaded itself and claimed that an expenditure of R20 per day on essential requirements for those living in urban areas and R15 for those living in rural India was enough to keep them out of poverty.

This poverty line of R20 per day for people living in the cities is worked out from the Planning Commission’s opinion that anybody with R578 per month is not poor!

As per its report, this amount includes a monthly expenditure of R31 on rent and conveyance, R18 on education, R25 on medicines and R36.5 on vegetables. The ridiculousness of these figures can be gauged from the fact that the Commission itself prescribes a minimum in-take of 2,400 calories daily to sustain oneself.

This requires, at current prices, an expenditure of at least R44 per day. This, of course, doesn’t include any expenditure on shelter, clothing, education, transportation etc.

The Commission, on the basis of flawed reasoning, takes the poverty ratio at 33% of our population. These are the people who alone should be provided some food security. The National Advisory Council has suggested a ratio of 46%.

Both estimations fall woefully short of the late Arjun Sengupta’s estimation that 77% of our population is currently surviving on less than R20 a day.

Any meaningful food security in our country can come about only through a universal public distribution system that ensures every household (both BPL and APL) receives 35 kg of foodgrains a month at R2 per kg.

The argument that India doesn’t have sufficient resources to do this is equally fraudulent. The monies looted through the 2G spectrum scam alone (leave alone all other scams and recovering the humongous amount of black money stashed abroad) would be more than enough to provide meaningful food security to our people.

Is UPA 2 listening?

(Sitaram Yechury is CPI(M) Politburo member and Rajya Sabha MP. The views expressed by the author are personal)

First Published: May 30, 2011 23:22 IST