Volume 1, No. 3, May 2000

Without even passing the budget, the government has already implemented its proposal to cut subsidies on rationed foodgrains. On April 1, the government hiked the rate of wheat for those below the poverty line (BPL) by a huge 80% to Rs. 4.5 per kg; and rice by 70% to Rs. 5.9 per kg. At the same time the price of wheat for those above the poverty line (APL is those earning over Rs. 1,250 per month) was raised to Rs. 9 per kg and rice to Rs. 11.8 per kg.... i.e., close to the market prices. This is in addition to the massive hikes in PDS kerosine, LPG and fertilisers (See Budget Article – March 2000 issue). While it continuously propagates on the need to remove subsidies for those supposedly not in need of it, and target it only on the needy; it has done exactly the opposite. It has hit hard at the very poorest in our country. That too, the hike is not the normal 10 to 15%, but a gigantic 70 to 80%.

Within a week, the government also imposed a mammoth Rs. 1 per litre cess on diesel and petrol, in order to fund the TNCs/comprador bourgeoisie’s plans to implement the Rs. 54,000 crore National Highway Development Project. In other words, the poor and middle classes are to fund (the cess will amount to huge Rs. 6000 crores yearly) a profit-making enterprise of big business, that will be charging heavy tolls on the roads they construct. It is no different from asking people to pay, say Enron, to build its power project. Such a ‘cess’ is nothing but direct loot of the masses to fund big business — it is outright criminal robbery.

Besides, while claiming that the cuts in subsidies are desperately necessary, due to an acute lack of funds; the government has found no problem in simultaneously gifting huge amounts to big business. And this is over and above that already granted in the budget. In the same week it slashed interest rates by 1% giving big business a bonanza of Rs. 1,500 crores (estimate of Business Standard Research Bureau, April 3, 2000); it gave industry status to the construction industry allowing the powerful builders’ lobby to reduce interest costs by a huge 2%; and it gave a series of concessions and doles to exporters and TNCs in its new EXIM policy, announced on March 31.

Yet, this increased burden on the masses by the Centre is not all. It is the mere tip of the iceberg. If we move to the states, and look at the impact of their policies, the cumulative effect is horrifying. Here we find, added price hikes, cuts in subsidies and welfare measures, and also a massive increase in unemployment. In this article we shall sample just three states to get a picture of the states policies in these three spheres. Here we shall consider Andhra Pradesh, Maharashtra and Uttar Pradesh

With cyber-speed the TDP has brought the centre’s price hike to AP. On April 6th itself, the TDP government hiked the price of BPL rice by Rs.2, from Rs. 3.5 to Rs. 5.5 per kg. It has thereby pushed a huge annual burden of Rs. 400 crores onto the backs of the poorest people of Andhra Pradesh. But, the TDP has even outdone the centre by simultaneously raising the price of electric power by 15%, thereby hitting primarily the agriculturist and domestic middle-class consumers.

Besides, in AP, as elsewhere, there is much fraud on who constitutes the ‘BPL’ people. While the TDP claims that 71% of the population is under the BPL scheme; in reality only 39% of the rice distributed under the PDS goes to those below the poverty line. Of the total distributed only 9 lakh tonnes goes to the BPL people, while 14 lakh tonnes goes to the APL section. In other words, in AP, a large section of those living below the poverty line are being treated as APL and will now have to pay the defacto market rate of Rs. 11.8 per kg.

A point here to note is that there was much media hype to the TDP’s supposed ‘vehement’ opposition of the Centre’s price hike. A grand show was made of four central TDP ministers opposing it, and a delegation was presented a memorandum to the PM. Other TDP chieftains have even sat on a dharna at Delhi. Yet, it is the same TDP that was the very first state government to implement the hike. In fact the entire ‘opposition’ of the TDP was high profile gimmickery, stage-acted by Goebellian loud-mouth, Naidu. Way back in February, the TDP had agreed to this hike; they had merely requested that the BJP postpone it, due to the municipal elections that were to take place in AP. No sooner were those elections over, that the hike has been implemented. Then why all the drama ?

Now, this combined hike in foodgrain rates and electricity charges is going to have a crushing impact on people’s living standards in AP.

The earlier BJP/Shiv Sena government provides an excellent example on how state governments are systematically cutting subsidies and welfare measures to the masses.

In the 1997/98 state budget the government introduced a massive Rs. 700 crore cut in the annual plan outlay on various people-oriented sectors like public health, social welfare, Employment Guarantee Scheme (EGS) etc. This amounted to as much as 8.5% of the total plan outlay.

Of this amount, Rs. 100 crores has been cut from the EGS, or ‘food for work’ scheme. This scheme provided the bare minimum to the large landless and poor peasants to tide over the bitter summer months. It is now planned to be phased out. Next, it cut Rs. 57 crores for the health sector ... which covers public health, sanitation and ESIS (Employees State Insurance Scheme). Then, the expenditure cut on social welfare was a huge Rs. 91 crores; a reduction of as much as 32% of the total. Through this cut, the worst sufferers will be the Mahila (women) and Bal Kalyan (child welfare) sectors. Then there was a reduction of Rs. 70 crores in the transport sector, which was made good by increasing the rates of bus tickets. And there was even a cut of Rs. 25.5 crores in the village and small-scale industry sector. As it is, lakhs of people face starvation in the handloom sector which has been close to collapse. Such a cut in funds, will push them to total destruction.

Though it has introduced such massive cuts in welfare expenditures, yet, at the time it fell from power the BJP/Shiv Sena government was totally bankrupt. Where then did the money go? The funds were diverted from people’s welfare, to profligate expenditure of the politicians and bureaucrats ... on schemes such as : the granting of an additional Rs. 54 crores to MLAs for ‘projects’ in their areas; the Rs. 40 crore ‘rural cleanliness programme’; the Rs. 26 crores ‘financial assistance to urban local bodies’ scheme, etc, etc.

Such then is the state of affairs regarding welfare expenditures, in the most ‘advanced’ state in the country!!

‘Economic reforms’ and World Bank dictated policies have had a disastrous impact on the employment situation in UP; as is the case in the rest of the country. This can be witnessed in both the private and public sectors.

In March 2000, the chairperson of the Indian Industries Association, Tarun Khetrapal, said that in the last four years 7 lakh people have lost their jobs in just the private sector. He said that in 1996 there were roughly 3 lakh small and big industries in UP with a total capital of Rs. 3,200 crores, employing 20 lakh people. Today, he said, there are 2.9 lakh industries with a capital of Rs. 2,500 crores, employing just 13 lakh people. In other words, while the number of industries reduced by 3.5% the number employed dropped by a gigantic 35%. Such then is the impact of de-industrialisation taking place in the country due to the onslaught of the TNCS and cheap imports — a result of the policies of ‘economic reforms’. Given a population growth rate of 2% per annum, it can only be imagined what disastrous impact would an absolute reduction in employment of 7 lakhs have on the overall situation in UP.

In the public sector the condition is even more pathetic. Under pressure from the IMF, the state government of UP has already cancelled around 88,000 posts in the name of ‘panchayat raj’ and has further planned to scrap 2 lakh posts by the end of the year. The privatisation of the UP electricity board is going to further add to the numbers retrenched. Besides this, the government has been issuing a series of GOs (government orders) to deprive employees of their existing facilities, in the name of a lack of funds. Yet it has more than sufficient funds for its jumbo ministry where crores are spent on ministerial perks and creation of new departments.

With no jobs available in the private sector and massive retrenchments in the public sector, what scope is there for gainful employment to the present generation. They would either have to take to crime.... or else turn to revolution. The government’s policies leave no third alternative.

Without sufficient land or jobs, with huge cuts in social welfare, with massive hikes in the cost of basic necessities ... survival itself has become impossible for a vast majority of the Indian people. Already the phenomenal rise in suicides, in both rural and urban areas, is taking a heavy toll. With no possible source of livelihood people are being pushed to take desperate measures.

The agony of existence on a half empty stomach; the pain of disease and inability to treat it due to lack of affordable medicine; the torment to see children wailing, because of malnutrition; the horrors of insecurity, not knowing where the next rupee will come from.... such is the lives of the real India. Not the hi-tech India portrayed in the TV and newspapers. No doubt, it is an India far removed from that insensitive consumerist middle class, brain-washed by the daily media hype. Having wished away the reality, they see GLORY in hindu revivalism.... in going back to the ‘roots’; in nuclear explosions; in ‘hi-tech computer experts’, who are nothing but glorified software labourers; and GLORY is seen in those handful of ‘Indians’ who have made fortunes in the West. And this make-believe world of Indian GLORY is marketed through a package of lies, falsehoods, deceit and an artificial world of glamour.

Just one example of this falsehood, propagated ad-nauseum in the media, is the government’s statistics on low inflation. Even when prices of essentials rise by 70 to 80%; or fuel by 30 to 50%; or transport by 15 to 20% — the government’s official inflation rate fluctuates around 2%. Obviously, even statistics can lie. The trick lies in the method of calculation of the Wholesale Price Index (WPI). The WPI is made up of a basket of 447 items, where manufactured goods have a 57% weightage, while primary products (like cereals, vegetables, etc.,) a mere 32%. In addition, even amongst the primary products there is utter lop-sidedness. For example, fruits get a weightage of 2.8%, while vegetables, (an item of daily use by the masses) gets a weightage of less than half that — a mere 1.3%. Kerosine gets barely any weightage, while mangoes get a high weightage. As there is a bias in the WPI for manufactured goods, whose price has, of late, been static (due to a slump in the market, and flood of cheap imports), it is quite natural that the inflation rate remains low, even if the price of basic necessities skyrocket. Yet, this is not the reality regarding inflation, wherein the WPI basket of commodities should have a weightage in proportion to the quantum consumed.

Using these cooked up figures, the government never tires in its disinformation regarding a ‘stable economy’ and ‘low inflation’. The gullible fall prey to this propaganda. But for the 59% of India’s population living below the poverty line, and another 20% hovering just above it, the stark reality lies in their daily existence. Even for a large section of the middle class, faced with a bleak future — of a jobless new generation, and squeezed between dropping incomes and rising prices —the disillusionment is increasing. Even the communal card is not able to sustain its tempo, and divert them indefinitely.

Castles built in the air must crash. The fake ‘GLORY’ will be confronted by the stark reality. Even the parliamentary politicians, stand increasingly exposed, as naked agents of the imperialist powers. Shamelessly, they no longer even try to hide that their anti-people policies are being dictated by the WTO, World Bank, etc.

Today, the further deterioration in the plight of the masses, can only be stopped through a vast revolutionary upsurge. It is only a revolutionary force that can give the masses that strength and ability to successfully counter the might of the rulers, and their imperialist sponsors. Such a force is growing .... first in some pockets, and gradually spreading to others throughout the country.

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