Indian government pushes on with austerity measures – Dec 2012

In late November 2012 the Indian prime minister Manmohan Singh made a speech defending his government's recent cuts in subsidies that benefit poor people (such as the price of kerosene and the number of subsidised cylinders each family was allowed to have) and the decision to allow majority foreign direct investment (FDI) in retail. Ending the ban on foreign multinational companies like Walmart taking a majority stake in any Indian retail company will allow such companies to start undercutting their suppliers and competitors using huge investments from abroad. With interest rates in India typically much higher than in developed countries like the UK, multinationals can get cheaper loans than their Indian competitors. This will be a threat to the livelihoods of hundreds of thousands of small Indian shopkeepers and retailers.

Singh's speech came as part of an attempt to reassure international credit agencies such as Moody's not to downgrade India's rating and keep the foreign investment coming in. Recently, several agencies such as the World Bank and the IMF have been issuing warnings and veiled threats to the Indian government that the economy is slowing down and the government does not have sufficient political will to carry through the necessary 'reforms' to stimulate the private sector and trim down the 'wasteful' public sector in India, which happens to employ millions of people.

In recent months, Singh's coalition government has been under attack from both the left and the right. By the left for its brutal attacks on India's poor (India is home to the largest number of poor people who subsist on less than $1 a day, higher than even sub Saharan Africa) and for cutting whatever little subsidies are still surviving after the economic liberalization of the 1990s. By the right for its alleged corruption and for not carrying through the reforms and privatization fast enough. Time magazine ran a cover article in June this year on Singh titled ‘The underachiever'. The government is also trying to stimulate the much-touted IT and BPO (business process outsourcing ie. call centres) sectors, which generate a significant percentage of GDP but not much employment for the millions of young Indians graduating every year. However, with the worldwide recession, even these sectors are facing losses and are cutting down further on recruitment, worsening the employment situation.

Workers in India have been fighting back against the reforms and gradual privatisation of many big government-run firms and welfare schemes. On 28 February 2012, several trade unions called a one-day general strike of millions that paralysed the country. There have been several strikes in recent months by different state and central government employee unions including a big strike in Karnataka state by transport employees protesting against erosion of living standards in the face of double-digit inflation and stagnant wages. On 20 September, there was a one-day Bharat Bandh (India shutdown) called by opposition parties to protest against the policy of foreign direct investment and high inflation, and it too had widespread participation. However, although such evidence of struggle against the reforms is welcome in itself, it cannot succeed unless there is concerted action by the working class, rather than token one-day strikes called by different unions, which in India are affiliated to different political parties.

The Indian government on one hand spends billions of rupees organizing wasteful events such as 2010 Commonwealth Games and developing huge space and armaments programmes, while on the other hand indulges in severe repression of independent working class movements (aided by the biased courts) such as the recent strike in Maruti Suzuki car plant, protest movements over dams built without adequate arrangements for displaced villagers as the Narmada Bachao Andolan, and the recent protest against a nuclear reactor in Koodankulam whose toxic wastes put the health of thousands of villagers at risk.

To discredit such working class movements, the government and the media often manufactures propaganda that the protest movements are being funded from abroad. It also often nurtures and uses right wing, fascist or regional movements such as the Shiv Sena in Mumbai, Bajrang Dal in Gujrat and the Rama Sene in Karnataka, to attack workers and minorities. Billions of rupees are being spent to repress and control the insurgency in areas such as Kashmir and the North East, money that could have been much better spent to tackle poverty.

There is also a burgeoning Maoist insurgency in the hinterland, which the home minister has labelled as the greatest internal threat. The Maoists in India, who are said to have ‘presence’ in up to one third of all Indian districts along the red corridor from the Nepal border to Andhra Pradesh in South India, are made mostly of tribal peoples living in forest areas for generations whose living areas have been given away to mining companies like Posco to extract natural resources. To suppress the Maoists, the Indian state is using equipment and tactics learnt in collaboration with the Israeli army with its experience of brutally repressing the Palestinians in Gaza and the West Bank.

Another issue is the thousands of farmer suicides in India (see FRFI 226, Indian farmers commit suicide in GM wasteland). They take this action because their lives have been made impossible through the huge debts they incur by being forced to use the very expensive 'green revolution' products of companies like Monsanto and the loans they have to take out from predatory microfinance companies that pretend to help the poor while making profits at their expense. Such intense rural poverty has forced millions of farmers and landless labourers to migrate to the cities in search of work, not unlike China. This has created a huge reserve army of labour in the big cities of India like Delhi and Bangalore, which faces super-exploitation by the construction industry.

The problems faced in India today are symptomatic of any developing country with extreme uneven development and huge inequality, where the richest man in India, Ambani, lives in a multi-million pound apartment right next to the largest slum in Mumbai, Dharavi. The bourgeois government, aided by the corporate controlled media, is in thrall to the rich and the multinational agencies such as the World Bank. The problems faced by the working class and oppressed in India can only be solved if they unite and wage a concerted struggle against the reforms war being waged by the state and ultimately take power.

Joy Bose