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INDIA REPORT
No. 21
JULY 2004

INTRODUCTION:
Indian society in 2004 is full of contradictions with a defined direction. Disparities abound (economic, social and political), the promise of “get rich quick” stares one in the face particularly in the media (print & audio-visual) as well as in the life styles of a small segment of the population. Cynicism, niche business activities, individualism (“me first”) are particularly evident in segments of the upper-middle income folks (urban & rural). Corruption is rife at all levels of life – generation of “black money” (circulation of illegal cash and other forms of money) and bribery are prominent examples.

The promise of humane social relations, a gentler sustainable life style as well as peace with justice remain part of the possible alternative. Being engaged to mobilize towards a quest for such an alternative remains the task of the present. The evolving direction of contemporary society is in the form of a consolidating capitalist economy with governance based on the politics of alliance.

This year (2003-2004) the editor/writer of this report traveled to Goa and the border area of Karnataka/Kerala. Over a period of 10 days a group of 4 traveled by train and bus to revisit southern Goa based in Madgaon. In Goa there were several festivities centered around Old Goa – Catholic feast days overlaid by consumer melas (fairs) and punctuated by local cultural (music, dance, popular theatre) events. Beaches and life around them are illustrative of the deep social divisions in contemporary India � 3, 4 &5 star hotels dot the ocean front where tourists from foreign countries mingle with the elite of India. This segment, a very small proportion of the population (1%-5%), spends Rs.5000/- Rs.50,000/ (about US$100/- US$1000/-) per day while all around them local (Indian) people have to get by on less than Rs.100/- per day (about US$2/-) Indeed a revealing comment on the “feel good” or “India shiningï” description of India today.

The next two segments of this report on economics and politics are to be understood/read in the context of a consolidating capitalist social formation as its systemic foundation. The key features being uneven & unequal economic growth, rising material disparities (social and political), continuing oppression with violence and severely restricted access to health care, affordable housing, adequate nutrition plus basic education – these are the structural dimensions of a contested terrain.

During the first two decades of India’s independence the thrust of social change was summed up as the quest to provide ROTI, KAPRA & MAKAN (food, clothing & shelter). Since the 1990’s the quest has shifted to supply BIJLI, SARAK & PANI (electric power, roads & water).

ECONOMY – DOES INDIA SHINE?
The economic growth rate, automobiles, roads, power, forex reserves and consumption are the prime indicators cited to show the rapid improvement in the level of well being of Indian people. Nominally the statistics appear to corroborate the assertion. Or do they?

Take the rate of economic growth cited as over 8% per year while some reports claiming that it is likely to go above 9% per year. A closer look suggests a different reality, one where the growth rates have either stagnated or gone down (Virmani, Arvind. "Election 2004: A Different Explanation". Economic & Political Weekly. June 19,’04). Furthermore the method of measuring the rates of economic growth add-up transactions that do not build productive wealth but contribute to a degradation of human & non-human resources (See: Shaik, A & E.Tonak. THE WEALTH OF NATIONS.’94. N.Y., Cambridge U. Press. Chap’s. 1 & 2; also the work of Hazel Henderson, Marilyn Waring and the web site – www.redefiningprogress.org).

The emphasis on the production of private 4-wheelers and the construction of hard-surfaced roads linking the larger urban cities mainly serve the requirements of, perhaps, 20% of the population while neglecting the needs of the majority. Such a pattern of transport networks re-enforces long-distance commercial trade contributing to higher price levels. The particular structure of generating electrical power is designed to provide inputs for the production of consumer durables (in India described as ‘white goods’) and IT services both prominent aspects of the consumption basket of the rich and upper middle-income folks. Consumption of packaged goods, refined foodstuffs, synthetic textiles, imported electronics and bottled soft drinks is encouraged. The particular combination of production and consumption tends to establish a price structure in tandem with global prices and hence affordable by a minority of India’s population but at the same time contributing to the higher profitability of the large scale domestic producer, traders and trans-national corporations. It is no accident that the trade and services sectors are the leading contributors to the GDP growth rate (See: Vanaik, Achin – ed. – GLOBALIZATION AND SOUTH ASIA. ’04. New Delhi, Manohar).

We provide some comments about the ‘Feel Good/India Shining’ description of contemporary India.
"There are villages in India where there has not been electricity since independence. There are villages in India where there are no roads, hospitals, no medicines, no sanitation, no schools, no teachers, no books, no black boards. -----. The rich will dance their way into 2004, the poor will huddle together for warmth, not knowing one day from another". (Mustafa, Seema. "The Two Faces of India". DECCAN CHRONICLE. Dec. 27,’03; also see, "When India Does Not Shine". THE HINDU. Feb.15,’04).

"India’s growth is by and large jobless ---- The 10th Planning Commission document (indicates) that under the current circumstances, the country’s infrastructure won’t be able to provide jobs for new entrants or clear the backlog. --- It is a time bomb waiting to explode" (TIMES OF INDIA. Jan.19,’04).

"---- there are many important sectors (notably agriculture, the capital goods industry and small scale manufacturing) and many populous areas (notably U.P., M.P., Orissa, Bihar and the N.E. States) that have (not) experienced any dramatic improvements ----. Underemployment, malnutrition and economic stagnancy are the defining features of these states"("Shine or Sham". THE HINDU. Feb.8,’04; also see: "Hidden by Hunger". THE HINDU. Fb.8,’04).

The rapid increase of forex reserves to over $100 billion needs to be placed in the context of a speculation driven stock market with its inherent volatility leading to a possible hemorrhage of foreign currency. The recently enacted legislation permitting remittances of $25,000/- if used by 1% of India’s current population can wipe out the entire forex reserve (See: Chandrasekhar, C.P.in, FRONTLINE. Feb.14-27,’04).

A well known economic analyst notes the persistence of an: "Agrarian crisis, decelerating employment growth, higher morbidity and mortality in the small business economy and the wearing down of a social sector starved of funds had all meant that much of India was waning not shining" (Chandrasekhar, C.P. "The verdict and the way ahead". FRONTLINE. June 5-18,’04).
"The detailed analysis of the behaviour of GDP, poverty and different aspects of human well being like education, health, etc., and unemployment leads us to conclude that the recent precipitous increase in GDP may not necessarily be a ‘feel-good’ factor for most people" (Ghosal, Ratan Kumar."GDP Growth And Feel Good Factor". ECONOMIC & POLITICAL WEEKLY. May 15,’04; also see: Dreze, Jean & Reetika Khera."Use Your Illusions". HINDUSTAN TIMES. Feb.18,’04).

"The stock market ----- is predominantly a site for trading risks and is mainly a secondary market for trading pre-existing stocks or new financial instruments such as derivatives, that are based on them" (Chandrasekhar, C.P. "A Tale of two mandates". FRONTLINE. May 22-June4,’04.
"Whose is the agenda that these economic reforms or this army of consultants are fulfilling? These policies of economic reforms do not represent progress or prosperity for the large majority of Indian people. They are only the extended fingers of the process of capitalist globalization-----."(Palit, Chitaroopa. "Whose reforms are these anyway?" FRONTLINE. June 5-18,’04).

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