The far-reaching economic reforms unleashed in 1991 had a differential impact on different sections of the Indian population. The Left parties in India were always critical of the nature of the reforms and the policies they entailed. Sitaram Yechury, former Rajya Sabha member and general secretary of the Communist Party of India (Marxist), spoke to Frontline on the impact of three decades of neoliberal reforms, the links between reforms and authoritarianism, and the broader implications for India’s secular democracy. Excerpts:
The Left has always been critical of neoliberal reforms. Looking at three decades of the reforms, would you say the Left stands vindicated in its criticism?
Absolutely! The thrust of neoliberal reforms is profit-centric, not people-centric. Global and Indian experience has shown that the reform decades have been solely focussed on maximising profits at the expense of impoverishing people, growing poverty, exponentially widening economic inequalities, and the sharp fall in domestic demand in all countries. The global economic slowdown and its impact on people’s life was devastatingly magnified with the onset of the pandemic that continues to ravage. This recalls what Marx once said: “Capitalism has conjured up such gigantic means of production and of exchange, it is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.”
Three decades of economic reforms in India come in the backdrop of the continuing unprecedented struggle by our farmers against the three new farm laws and for a legal guarantee of MSP [minimum support price]. These evoke memories of the Champaran satyagraha against forcible indigo plantations a century ago, corporate farming, destruction of petty production (Modi’s ‘demonetisation’) and food shortages that may soon grow to famine proportions.
The reform process in India is integral to the international finance capital-dominated ideological construct of neoliberalism. The objective here is the unbridled maximisation of profits unleashing the worst predatory character of capitalism—unleashing the “animal spirit”. Large-scale privatisation of public assets, all public utilities and services, of all mineral resources, imposition of ‘user charges’ on people. Neoliberalism globally and in India provided a bonanza for corporates. Since its ascendancy, taxes on the rich have declined globally by 79 per cent. After the 2008 financial meltdown, most billionaires restored their wealth in three years and doubled it by 2018. This wealth has grown not through production but speculation which explains why this deep global recession has not impacted stock markets negatively.
Also read: Neoliberalism: An era of growth sans justice
On the other hand, 80 per cent of income-earners globally have not recovered to pre-2008 level. The attacks on organised industry and the rights of the working class have resulted in trade unions that represented one in four workers in 1979 in the U.S. declining to represent only one in 10 today.
In response to Jeff Bezos’ space flight, Deepak Xavier, Oxfam International’s Global Head of Inequality Campaign, said: “We’ve now reached stratospheric inequality. Eleven people are likely now dying of hunger each minute while Bezos prepares for an 11-minute personal space flight. This is human folly, not human achievement.”
The ultra-rich are being propped up by unfair tax systems and pitiful labour protections. U.S. billionaires got around $1.8 trillion richer since the beginning of the pandemic and nine new billionaires were created by Big Pharma’s monopoly on COVID-19 vaccines.
Nearly $11 trillion was spent by the central banks in 18 months, that is, $834 million every hour, to keep the global economy afloat since the pandemic arrived. This sparked off the biggest stock market rally of a generation, while people were suffering from growing unemployment, poverty, hunger and deprivation. The billionaires were riding on this inflated stock market. The stock market boom in the midst of a deepening economic recession is a ‘bubble’ that cannot, like all bubbles, expand ad infinitum. Burst, it will, ruining the economy even further, devastating many countries.
Nehruvian era vis-a-vis the present
The Left also had the criticised economic policies of the Nehruvian era until the 1980s. How is the present critique of economic policies different from the one earlier?
Yes, we were strong critics of the economic policies pursued in the Nehruvian era. That critique was based on the fact that the path of economic development chosen by the Indian ruling classes—a bourgeois-landlord alliance led by the big bourgeoisie—was a betrayal of the aspirations and promises made to the people during the course of India’s epic struggle for freedom. Instead of eliminating poverty, hunger, unemployment and illiteracy, there was an increase in all these. While the propaganda and talk in Nehruvian era was of a “socialist pattern of society”, in reality, what was practised was the development of a capitalist path. Capitalism, by definition, can only be advanced by intensifying human exploitation for profit generation.
The present critique of the current economic policies is very different. Whatever positive was achieved in the Nehruvian era is now being demolished rapidly. The concept of planning with the Planning Commission and Five Year Plans, the establishment of the public sector and seeking to give it the “commanding heights” in our economy laid the foundations of an independent economic base in India.
The aggressive policies of neoliberalism pursued by the Modi government is ruthlessly dismantling this entire base. This is not confined to industry but has encroached on agriculture that is being rapidly destroyed with the new farm laws.
The public sector had a role in developing infrastructure that eventually benefited private capitalist sector to grow and develop. But, nevertheless, it served as a bulwark to protect India from becoming the economic surrogate of Western capital and be reduced to a dependency. The Left’s defence of the public sector today comes from this understanding of the need to protect and safeguard India’s independent economic foundations and our national assets.
India shining or suffering
There are those who believe that a lot of income and wealth was generated with economic liberalisation. Is there not another side to it in terms of immiseration of the working people?
The consequence of neoliberal reforms is the exponential widening of economic inequalities. ‘Shining India’ always rides on the shoulders of ‘`Suffering India’. The luminosity of ‘Shining India’ is inversely proportional to the depravations of ‘Suffering India’.
India’s 100 billionaires have seen their fortunes increase by Rs.12,97,822 crore since March 2020, enough to give every one of the 138 million poorest Indian people a cheque for Rs.94,045 each.
It would take an unskilled worker 10,000 years to make what Mukesh Ambani made in an hour during the pandemic and three years to make what he made in a second, finds the latest India supplement of the Oxfam report The Inequality Virus.
On the other hand, data show that 1,70,000 people lost their jobs every hour in the month of April 2020. The wealth of Indian billionaires increased by 35 per cent during the lockdown and by 90 per cent since 2009 to $422.9 billion. In fact, the increase in wealth of the top 11 billionaires of India during the pandemic could sustain the NREGS [Mahatma Gandhi National Rural Employment Guarantee Scheme] for 10 years or the Health Ministry budget for 10 years.
Only 6 per cent of the poorest 20 per cent has access to non-shared sources of improved sanitation, compared with 93.4 per cent of the top 20 per cent. As many as 59.6 per cent of India’s population lives in a single room or less.
India has the world’s fourth lowest health budget in terms of its share of government expenditure. If India’s top 11 billionaires are taxed at just 1 per cent on the increase in their wealth during the pandemic, it will be enough to increase the allocation of the Jan Aushadi Scheme by 140 times, which provides affordable medicines to the poor and marginalised.
Reform decades in India have sharply increased economic inequalities focussing on being profit-centric rather than being people-centric. Prime Minister Modi exhorts us to respect wealth creators. Wealth is nothing but the monetisation of value that is produced by the working people. It is the value creators that need to be respected for the overall wealth of our people.
Along with abolishing the Planning Commission, the Modi government abandoned what India followed since Independence—the basic nutritional norm to measure poverty levels. The nutritional norm was fixed at 2,200 calories per person per day in rural and 2,100 calories in urban India. The NSS [National Sample Survey] large sample survey shows that according to this norm, 58 per cent in rural and 57 per cent in urban India in 1993-94 were below the poverty line. The next similar NSS survey for 2011-12 shows the percentages were 68 and 65 respectively. The next large sample survey was done in 2017-18. But these NSS findings were suppressed by the Modi government to conceal the truth. This government is also destroying our world-acclaimed database institutions. The data that leaked to the media show an absolute drop of 9 per cent in per capita real consumption expenditure (not just food) in rural India. Clearly, there is an unprecedented increase in absolute poverty in both rural and urban India even before the pandemic struck. The situation since has become worse.
Today, the Global Hunger Index places India in “serious category”. The National Family Health Survey-5 (NFHS-5) shows alarming growth of malnutrition, particularly amongst children, infant mortality and other indices. Recently, India was downgraded by two ranks in the global index of Sustainable Development Goals. During the past one year, Pew Research Centre estimates, the number of people below poverty line in India have grown from 60 to 134 million. India has contributed 57.3 per cent to the growth of the global poor last year. As many as 59.3 per cent of our middle classes have slipped into poverty.
Left’s pressure on the UPA
During the tenure of the United Progressive Alliance (UPA) government, for a while it was believed that reforms were put on hold because of the pressure from the Left. Did the UPA’s policies reflect a significant departure from neoliberalism?
It is not that the United Progressive Alliance government had kept economic reforms on hold. It is precisely because the Common Minimum Programme [CMP] had outlined a blueprint for the continuation of the neoliberal reform process that the Left parties extended only outside support to the UPA government. This support was extended in the interests of protecting the secular democratic character of the Indian republic and preventing communal forces from capturing state power which would weaken and undermine the foundations of such a republic.
Yes, it was under pressure from the Left that a CMP was drawn up, which included landmark legislation such as the MGNREGA, the Forest Rights Act, the Right to Food, a new law on land acquisition, the Right to Information, the Right to Education and such measures which may not have, otherwise, seen the light of the day.
The Constitution gives certain fundamental rights and guarantees to all its citizens. The Left firmly believes that these rights and guarantees must continue to expand as India develops. The right to employment is not a fundamental right in the Constitution. But the MGNREGA ensured this right at least in rural areas. Notwithstanding its limitations and the deliberate attempts to not implement it by the ruling classes, it nevertheless was an extension of the right to rural employment.
The Left continues to demand that the promise made at that point, when MGNREGA was legislated, that a similar urban employment guarantee must be implemented. Likewise, education is not a fundamental right enshrined in the Constitution. But the right to education, though not implemented, is at least an extension. Likewise the RTI, the Forest Rights Act for the tribal community, etc., were extensions of rights and guarantees for the people. In that sense, they are legislation that may normally have not come, without the Left’s pressure, under neoliberalism.
What are the implications of India’s turn towards neoliberalism for India’s secular democracy and is there a connection between it and the rise of authoritarianism?
What has emerged since 2014 is a venal cocktail of corporate interests and communal politics. This aggressively pursues profit maximisation through the loot of national assets, large-scale privatisation of the public sector, public utilities and mineral resources. This results in unprecedented levels of crony capitalism and political corruption. This is accompanied by ruthless attacks on people’s democratic rights, civil liberties and human rights; treating all dissent as anti-national, indiscriminately arresting people under draconian laws like UAPA [Unlawful Activities (Prevention) Act]/sedition—a process that undermines the Constitution and its guarantees to the people.
This has led the world to declare India as an “electoral autocracy”. The global economic freedom index places India at 105, worsening from 79 last year. Human Freedom Index ranks India 111, down from 94. The UNDP Human Development Index pushes India down to 131 from 129 last year.
Along with growing misery for the vast majority of our people, this rising authoritarianism is moving close to Mussolini’s ominous definition of fascism as “fusion of corporates with governance”.
And now that neoliberalism itself is facing a crisis aggravated by COVID-19, what is the future? And the alternative.
The COVID pandemic and the woes of our grossly inadequate health care for protecting people’s life and livelihoods is exposed all too sharply. The deep economic recession we are undergoing today is part of the global neoliberal trajectory where profits are maximised through intensification of exploitation of the people in whichever manner possible, from austerity measures to wage cuts, job layoffs and, importantly, the destruction of petty production that was done in India through ‘demonetisation’. The encroachment of all avenues of economic activity and now destroying Indian agriculture for corporate profit, contract farming and consequent food scarcity tellingly demonstrate this.
Globally, the bankruptcy of neoliberal reforms in reviving the economy is being increasingly recognised. The Economist, surveying the alarmingly growing inequalities, concludes saying: “Inequality has reached such a stage where it can be inefficient and bad for growth.” Joseph Stiglitz, in his book The Price of Inequality, speaks of the top 1 per cent and the other 99 per cent of the people and concludes: “Our economic growth, if properly measured, will be much higher than what we can achieve if our society remains deeply divided.”
All advanced countries have announced stimulus packages by way of massive state expenditures which is anathema to neoliberalism. These are aimed at reviving domestic demand and economic activity. British Prime Minister Boris Johnson prefaced a recent speech advocating increased governmental expenditures by saying: “I am not a Communist, but….”
The Modi government, however, is refusing to hike expenditures even while writing off huge unpaid loans taken by its cronies. It imposes more crushing burdens on the people through daily hikes in the prices of petrol and diesel and consequent overall inflation. This is depressing domestic demand, further deepening economic recession.
We, in India, need to seriously introspect this reform trajectory and reorient our priorities: strengthen agriculture, food security, invest in health, education, sharply increase public investments to build our much-needed infrastructure—both economic and social—to generate jobs and bolster domestic demand.
The Bharatiya Janata Party, which claims to be a nationalist party, has been moving consistently on the neoliberal path laid down in the early 1990s. Is its vision of neoliberal reforms more aggressive than that of any other party?
The BJP always speaks with a double tongue. What it says and what it does are two entirely different things. Its claim to being a nationalist party, raising slogans like Swadeshi at one time and opposing the World Trade Organisation while in opposition, was totally reversed once it assumed the reins of the government.
Particularly since 2014, the BJP government has been aggressively implementing neoliberal reforms. Such aggression was not seen earlier. There is a reason for this. The BJP is the political arm of the RSS [Rashtriya Swayamsewak Sangh]. The RSS, as always, pursues its political project of establishing a rabidly intolerant theocratic fascistic ‘Hindutva Rashtra’ in India. Having failed to achieve this at the time of Independence, it has consistently been seeking to undermine the secular democratic republic established by the Constitution and, in its place, erect its fascistic ‘Hindutva Rashtra’.
Such an objective to succeed in a globalised world would require international support, at least not an active opposition by the international community. The best way, it seeks to ensure this, is by aggressively implementing the neoliberal reforms, providing newer areas for profit maximisation to global and domestic capital and corporates to elicit their support.
What are the implications of India’s turn towards neoliberalism for its approach to and role in world politics?
The global political rightward shift is a consequence of the prolonged global capitalist crisis. A slowdown in the levels of profit maximisation cannot but affect adversely the interests of global capitalism. Rightward political shift of rousing passions, disruptive trends like racism, xenophobia, spreading hatred, suppression of democratic rights and civil liberties have all been brought into play to disrupt the growing unity of the working class-led working people’s protests across the world.
In India, such a rightward shift is emerging through the sharpening of communal polarisation and campaigns of poisonous hate and violence against religious minorities which serves to advance the RSS’ fascistic project. This, naturally, leads to the rise and growth of authoritarianism to fascistic proportions.
Particularly since 2014, a corporate-communal nexus has emerged and is continuously strengthening. This is leading to the worst expression of crony capitalism as can be seen with the crony corporates, naturally, amassing their wealth. Large-scale loot of India’s national assets with the latest National Monetisation Pipeline (NMP) being announced is part of this entire project of unbridled neoliberal economic reforms and the advance of the RSS project.
Such a policy of unbridled neoliberalism, naturally, further cements India’s role in international relations as an appendage of international finance capital and a surrogate of U.S. imperialism. India’s glory that once was being the leader of the developing world, a champion of Non-Aligned Movement, is now being reduced as historical records.
The corporate-communal nexus that is currently aggressively pursuing neoliberal reforms as a junior partner of U.S. imperialism is part of the overall package to metamorphose India from a secular democratic republic, as defined by the Constitution, into the RSS vision of a rabidly intolerant theocratic fascistic ‘Hindutva Rashtra’.