Volume 3, No. 11, November 2002

Dr. PR Brahmananda was the former Director, Bombay School of Economics. Now he is Honorary Visiting Fellow, Institute of Social and Economic Change, Bangalore.

Brahmananda is settled in Ban-galore and his house is called Sri Saila Nilaya, perhaps, after the racketeer and political godman Sai Baba.

Professor Brahmananda is, without doubt, a bourgeois economist. Just as much as he is spiritually devoted to the divine forces, he is intellectually devoted to the Indian ruling classes.

His book Karnataka, Devel-opment Experience and Possibilities, An Economist’s Profile, stands as the most recent piece of testimony to this fact. Sponsored by the Karnataka State Industrial Investment and Devel-opment Corporation Limited (KSIIDC), which is nothing but another arm of the reactionary state government, Prof Brahmananda, has, through this book, taken the opportunity to express his gratitude to the comprador-feudal government that rules from Bangalore.

This book, running to just 84 pages is printed on glossy imported art paper. Each page is in multicolour offset and is embellished with about 50 breathtaking photographs, paintings and colour graphs. The cost of one book could easily run to a few hundred rupees if not more.

But it is not the gloss alone that sparks the gleam in the aged economist’s eye. This book was distributed to the thousand odd comprador and imperialist delegates on 5 June last year when Karnataka was "showcased" for plunder at the Global Investor’s Meet (GIM). (See People’s March, October 2000 for details about the GIM)

PR Brahmananda’s book was neatly gift-wrapped. On the cover the title reads: Karnataka: Future Vision, Current Action. Then there is this statement by SM Krishna, Chief Minister of Karnataka, which slavishly appeals for imperialist and big bour-geois investment for the state.

This is followed by the four-page long Future Vision pamphlet. This is the Chief Minister’s class aspiration for the next ten years printed on paper with a hue of gold.

This politician not merely praised the professor. In the same breath he established the role of the social scientist in providing the intellectual veneer for unmitigated imperialist pillage.

And this is how the "scientist" has paid his Acknowledgements.

"The Economy seems to have done extraordinarily well…. Some invisible force seems to have guided Karnataka’s destiny. And I hope and pray the same destiny will guard Karnataka in the future as well. I have no doubt that Adam Smith would have been delighted at the progress of Karnataka, which seemed to have been in nobody’s conscious mind. The global investors from India and abroad should consider Karna-taka as a safe and fertile soil to sow their investments." (pp 83-84, emph-asis added)

This only makes Brahmananda a god-fearing bourgeois economist with deep faith in imperialism for bringing Karnataka around.

Stamped on every page of his book is the monogram of the GIM, reflecting the inner thoughts of this inflated academic. He is the economist contracted by the comprador bourg-eoisie to clean up the musty Karnataka showcase full of cobwebs and settled with layers of dust.

Brahmananda concludes that the Karnataka economy has done "extraordinarily well." Drawing from the figures he provides us and by making a critical review of his "detailed" analysis, it will become clear that semi-feudal semi-colonial Karnataka is deeply crisis-ridden and is in fact faring bad, extraordinarily bad.

PR Brahmananda writes: "English is widely spoken among the lower and upper middle classes. Hindi is also understood by most people." (p 6)

The upper middle class fancies English all right. But to say that among the lower middle class of Karnataka "English is spoken widely" is false. It is as far from the truth as saying that "most" people understand Hindi in Karnataka.

Hard pressed by imperialism and the big compradors, the lower middle classes, along with the other masses, continue to resist being swamped by the imposition of English, Hindi and Sanskrit with their mother tongues in their hearts and Kannada on their lips.

Okay, one may say, Brahmananda is inspired by an Adam Smith and not an Emile Durkheim, so let us move to different turf.

Prof Brahmananda writes: "Unfortunately though forests constitute 20.3% of land area according to village papers, nearly half should be deemed as degraded. Trees have been indiscriminately felled without replacements. The state has acute shortage of fuel, fodder and timber." (p 9)

One must agree with the professor’s evaluation. There indeed is widespread deforestation and there is a resultant acute shortage in its products.

But there are two questions that are glossed over.

1. Who has caused this massive destruction of forests and why?

2. Which social classes does deforestation severely affect?

Ever since India was colonised, and more so in the age of imperialism, forest destruction has been growing every year. As a result, satellite pict-ures reveal, we are left with just about 7% of tree cover for the entire state.

But who pays the price? The peasantry is almost wholly dependent on wood as the source of cooking fuel. Even the urban poor have hearths fuelled by wood in metropolitan Bangalore. Fodder shortage directly strikes at the peasantry.

The eco-crisis is a crisis which unhesitatingly affects the toiling masses.

Does Prof Brahmananda see a way out of this "unfortunate" destruction? Yes. In the very next line he consoles us: "However, Western Ghats forestry project is being implemented with assistance from the UK…. Social forestry schemes are being encoura-ged by the State Government with the assistance of voluntary agencies." (p 9)

Banking on the British, who have ruined our forest wealth over the centuries, to rescue our forests! In fact ever since British Overseas Development Assistance (ODA) and World Bank aid flowed into the forestry sector in Karnataka, permission to undertake logging and clearfelling have increased, biodiversity has been sacrificed and the patenting of the rich floral wealth by imperialist institutions has gained momentum.

Attacking the $25 million ODA project of 1995 which the Karnataka government has implemented and is in the process of executing a second ODA forest project, Panduranga Hegde—who is no Marxist—in an interview to Jeremy Seabrook said, this project was "disaster by stealth. The poor become slowly dispossessed and the environment exploited all under the guise of ‘social forestry’ and ‘democratic participation’." (New Internationalist, 1996)

Still want to believe Brahmananda, beautician of a crisis ridden Karnataka, when he says the state’s economy has done "extraordinarily well"?

The first subheading in the chapter entitled "Agriculture" reads: "Excess of Small and Marginal Farms". Under this, the economist thus delineates the problems of what has been a stagnant agrarian sector: "The major disabilities from which agricultural growth has been suffering are: the decreasing average size of holdings with high proportion of small and marginal holdings, the frequency of droughts, the inade-quacy of productive and protective irrigation works, the erosion of tanks, the excessive and inappropriate use of fertilisers…. Small and marginal farms constitute about 60% of holdings; though in operation size, they cultivate 30% of the area…. The bulk of Karnataka agriculture is under peasant farming." (p 13)

Further, the economist says, there has been a slight decline in the net sown and gross cropped areas; the net irrigated area has increased from just 2.1 to 2.3 million acres in the last dozen years and the area irrigated by tanks has fallen from 13% to 5.8% since 1970-71; the number of ploughs stand at 38.5 lakhs, remaining the mainstay of agriculture. (ibid) "In fact most agricultural crops found their growth rates declining from the early Eighties." (p 15)

Agriculture is in a state of coma. Yet the "renowned economist" of such "stature" folds his hands in thankful prayer at the "invisible force" that "seems to have guided Karnataka’s destiny" so "extraor-dinarily well"! Seeing the reality, yet refusing to recognize it for what it really is. This is what the opiate of Baba bhajans can do to one’s sensibilities—hold an economist in a state of illusory trance oblivious of the harsh reality of semi-feudalism staring at his face.

Bourgeois ideology has the uncanny knack of standing things on the head. And that is exactly what Brahmananda has done as an eco-nomist.

Nowhere has he brought the question of semifeudal land ownership as being a drag on Karnataka’s agriculture. In fact his analysis clearly shields the landlord class from public view. You do not find him describing the backward semifeudal relations of production which oppress and exploit the landless and poor ("small and marginal", in Brahmananda’s parlance) peasantry. Rather, trained to think on the lines of an Adam Smith or his despicable contemporary, Malthus, he presents the poor pea-sants who make up for 60% of the rural population as the villains, as being in "excess" and as contributing to the "disability" that "agriculture suffers" from.

Prof PR Brahmananda cannot wish away this "excess". It is a solid 50 crores in number and the biggest chunk of India’s 100 crore mass.

By calling them an "excess" and by concluding that their 60% holdings operating 30% of the total land are uneconomical, a case is built to relieve them of all their land. Thereby the landlords who already own 30% of all agricultural land can make these "fragmented holdings" their conso-lidated estates of wealth. Brahma-nanda is obviously with the landlords and against the peasantry.

But Prof Brahmananda, impressed by Adam Smith, must realise that he is not in the era of rising capitalism. He is in the era of moribund capitalism. He is in a semicolonial semifeudal country which is closed to the "possibility" of capitalist devel-opment.

The disease is not the "excess" of poor peasants. The abscess is the continued existence of the landlord class, which stands in the way of the liberation of the oppressed peasantry.

Once again Brahmananda circum-vents the real issue and takes the viewpoint of the capitalist when he writes: "It is in the triple spheres of horticulture, plantation and flori-culture that Karnataka seems to have great scope in the future, more so for exports. Investments in these lines in course of time would be profitable." (p 18)

When one-sixth of the world’s potential market is within India—for the simple reason that India has one-sixth of the world’s population—to place the future of a nation’s agriculture in the export basket of flowers and fruits is a betrayal, of not only one’s ignorance of economics, but also of the nation itself. And what motivates this wholesale betrayal? The last sentence in the lines quoted above, the desire for profit for a handful of agricultural capitalists.

Mandarins all, of the comprador bureaucrat bourgeoisie!

Any talk of floriculture, as a way to the future, is downright stupidity.

Floriculture, which has been growing at a modest pace, particularly in the environs of Bangalore in recent years, requires, according to the Industrial Development Bank of India, an optimal investment of Rs 20-25 million for one hectare.

Leave alone lay godmen with their miracle-making business, not even Brahma can generate this amount of capital for the millions of poverty-stricken peasant masses of Karnataka.

What is Prof Brahmananda then talking about?

He is apparently angling for big bourgeois and imperialist investments in agriculture.

In fact, as MN Panini’s study reveals, the floriculture sector amply demonstrates that these farms are owned by the comprador bureaucrat capitalists in league with the imperialists.

Brahmananda offers us some figures. He writes: "There are currently 9,266 registered factories employing about 9 lakh workers. The number of registered factories was 7,768 in 1990-91 and employment then was 7.78 lakhs. Apart from the registered factories about 2,50,000 small scale industrial units have been currently registered in Karnataka, which provide employment to about 1.5 million persons." (p 20)

That is the picture of progress he paints. But this paint doesn’t stick. It is easily washed away.

Of the 78 state government run public sector enterprises more than half are in deep trouble. For instance state government giants such as the New Government Electric Factory (NGEF) and Mysore Lamps are expressing worker resistance against imminent closure. In 1988 NGEF had a total worker strength of 8,000. Now it has been trimmed down to 2,000. Similarly, Mysore Lamps, which had about 4,000 workers during the same time, has cut down their numbers to 1,600 now.

This story repeats also for most central government undertakings in the state such as for instance Bharath Gold Mines Ltd (BGML) whose remaining 4,500 workers are waging a life and death battle to keep the mines from closing.

Is there a rise or a decline in industrial employment then?

Ask Prof Brahmananda and he will assert all is well, "extraordinarily well".

It is true that 2,50,000 small scale industries with a workforce of 15 lakhs were registered by 1999 in Karnataka. But to seek the truth behind these numbers let us turn to what SR Kashappanavar, the Karnataka Small Industries Minister had to say on 18 November 1999 at Bangalore. "Mr Kashappanavar told reporters that of the 2.5 lakh small scale units, nearly 70,000 were sick or were on the verge of being declared as sick units." (The Economic Times, 19 November 1999)

In other words 28% of all small scale industries were sick in the state. This would have eliminated, at the same rate, 4.2 lakh jobs of a total 15 lakh jobs. A tall order of unemployment by any standards.

Selective choice of data, biased articulation of statistics is the forte of the intellectual juggler. If Brahma-nanda did this window dressing for no fee, what premium fidelity could he have displayed if he were monetarily paid for the job, is anybody’s guess.

Brahmananda’s coat of golden paint easily peels. And what it reveals beneath its surface is an industrial downturn, bloody and red.

Let us see how the facts are suffocated once again with regard to industrial production.

The window dresser writes: "It may be noticed that in 1991-92, whereas industry all over India was in a serious crisis, Karnataka’s industry grew at 6.6%. Similarly, during the period 1996-97 and 1997-98 when industry was in a recession all over India, Karnataka’s industry was performing very well." (p 22. Brahmananda surely wouldn’t object to the added emphasis.)

Page 24 has a huge table with 12 columns, 19 rows and some footnotes. It provides a maze of statistics about production of select industries in Karnataka for the years from 1980-81 to 1998-99. So as not to get lost in the sea of numbers, the essence is different from the picture presented.

When compared to 1980-81, in 1990-91, that is, at the end of the first decade under review, there was an increase in production in that decade in only 10 of the 16 industrial sectors. 5 sectors experienced a decline over the decade, while statistics for one sector is not provided.

What is the progress for 1998-99, nearly a decade later—after the much tomtomed first generation reforms of imperialist globalisation was comple-ted? In 8 out of 16 sectors there was a decadenal decline in production. There was growth in only 5 sectors, with no statistics provided for three sectors.

The professor’s figures contradict his conclusions. He still wants us to believe that "Karnataka’s economy was performing very well."

Let us now look at the changing pattern of investment and its implications.

In the decades of the 1950s and 1960s Karnataka was home to massive public sector investment by the centre and the state. This led to the establishment of giant public sector factories such as ITI, HAL, BEL, BHEL, HMT, NGEF, etc, employing several thousand workers in each factory.

76 of the 78 state public sector undertakings witnessed a total investment of Rs 16,503 crores employing 1,62,262 workers and making the average per unit emplo-yment stand at 2,135 people. (p 25)

The state and central public sector factories had the highest concen-tration of workers, leading also to the relative strength of the trade union movement among them, when compared to the private sector.

But with the onset of the first generation of imperialist inspired reforms since 1991, the investment pattern has experienced a significant change.

Of the total Rs 91,000 crores of investments that was assured to Karnataka from 1991 to 1999, ranking it sixth at the all-India level, the Indian private sector had promised Rs 39,000 crores, the foreign private sector Rs 23,000 crores, the state government Rs 20,000 crores and the centre assured merely Rs 7,000 crores. (p 25)

But the actual flow of investment during this period was Rs 40,000 crores or 44% of assurances and of this the total foreign investment by December 1999 stood at Rs 15,828 crores or 35% of all investment, making Karnataka the fourth most privileged destination of foreign investment in India. Indian private investment stood at 41%, and together, the figure stood at 76% of all investment in Karnataka.

Clearly, these figures establish that basically investment by the comprador big bourgeoisie and imperialism, i.e., private investment, has taken precedence over public sector investment.

The central government on its part, with an actual investment of just over Rs 3,000 crores in the last decade has handed over all initiative to the imperialists and comprador big bourgeoisie to undertake Karnataka’s so-called industrialisation.

In the coming days one can expect a similar reduction in the slice of the state government’s investments, in keeping with the second generation of imperialist sponsored reforms.

It is this bankruptcy of the state government, which leads it further into the loving embrace of the imperialists and the big compradors.

"Please invest in Karnataka!" this is the choral plea the government and its mandarins sing morning and night, day in and day out, for years without end.

It is in this context of increased slavery to the imperialists that the recent Memorandum of Under-standing (MoU) signed between the Karnataka government and the Confederation of Indian Industry (CII), one of the premier organisations of Indian big capital, must be seen.

On 16 March 2000 Business Times reported that this agreement created the conditions for "joint work on long term investment in the state." After Andhra Pradesh, West Bengal, Jammu and Kashmir and Delhi, Karnataka is the fifth state to sign such an agreement with the CII.

Karnataka has been pawned to the comprador big bourgeoisie and imperialism.

* In terms of the number of industrial units, it is apparent that the existing ones are folding up at a far more rapid pace than the creation of new ones.

* Units with the highest concentration of workers are being liquidated or sized down and privatised.

* Brahmananda’s table of employ-ment shows that while employment in the organised sector for 1990-91 stood at 14,47,000 it rose to a meagre 18,60,000 for 1999-2000 marking an annual rise of just 3.3%. At the same time while the skilled registrants at the employment exchange stood at 1,86,000 in 1990-91, this number increased to 2,79,000 for the year 1999-2000. (p 64) Bearing a direct relation to the closure of industrial units, the number of workers losing jobs is far more than perhaps the number who are being employed afresh. Hence these statistics presented by Brahmananda, which by themselves speak of the pathetic level of employment generation, are grossly inadequate in illustrating the precise degree of the unemployment crisis that stalks the state.

* In terms of the volume of industrial production, the 1980s saw a slow decline and the 1990s a general down turn.

* As with regards to capital investment, with the collapse of Soviet social imperialism, state capital has made way for the rapid growth of private capital. Imperialist FDI and big Indian capital are displacing public sector investment. There is no indication that new sections of the masses, particularly the peasantry, are being progressively employed in industry. Despite media hype about private investment, the rural-urban population ratio remained unchanged for the last two decades. No other bit of evidence seems to indicate better that imperialism and the comprador bureaucrat bourgeoisie cannot conduct or lead the industrialisation of Karnataka, or for that matter, the industrialisation of this country.

Yet, economists like Brahmananda, cohorts of the reactionary compradors, are excited by Karnataka’s "deve-lopment experience" and its "possi-bilities".

PR Brahmananda attests to the existence of deep financial problems for the state government when he says: "The ability of the state government to directly fund capital investment for industrial development or for any other development has now almost dried up….

Karnataka government does not propose to invest directly but will work as a facilitator." (p 26)

Do financial crises appear as suddenly as they disappear? Are they an ephemeral phenomenon, an inconsequential fleeting of the moment, which can be conveniently dismissed?

Well, that is exactly how Prof Brahmananda seeks to treat the question.

The fact is that financial crises are the reflection of a wider economic malaise. They are an effervescent manifestation of the larger crisis of the economic system.

Brahmananda is not ignorant of the looming financial crisis. He attests to it by writing: "Karnataka is getting into a fiscal crisis…." (p 58)

Yet he chooses to ignore its grave underlying implications. And, like any diehard he gloats about being "surprised" that the economy has done so "extraordinarily well".

On 29 March this year, while making his budget speech, SM Krishna shamelessly revealed that he had won a commitment from the World Bank for a massive loan of Rs 12,000 crores. He also mentioned of Japanese aid worth Rs 3,600 crores for Karnataka.

After Chandrababu Naidu who signed up with the World Bank for a Rs 15,000 crore loan, SM Krishna is the second Chief Minister in India to negotiate with the devil for a direct loan for which the centre stands as an onlooking guarantor.

Krishna staked away the future of the masses of Karnataka for this loan. On 24 June The Times of India spoke of the conditions that were attached in a report that described the romping and stomping of World Bank carnivores in the Vidhana Soudha, entitled: WB Advising Finance Department on Economic Restr-ucturing.

Imperialist inspired structural reforms that are now underway in Karnataka are going to take a devastating toll on the masses, the likes of which Karnataka would rarely have seen before.

Yet Prof Brahmananda, academic apologist for the World Bank, will try to remind us that the Karnataka economy is well and riding high.

Information Technology is the new mantra online. The figures for Karnataka appear dazzling just as they are for India. But here again there is more—a lot more—that is hidden than is revealed by the hype.

Since this question will be dealt with in detail in a forthcoming issue, we leave Brahmananda to indulge in the pleasure of surfing the software crest of the ‘new economy’ for the moment.

In 1993-94, 96 lakh people in the villages and 60 lakh people in the urban areas, a total of 1.56 crores, were below the poverty line in Karnataka. (p 71) Close to 50 lakh people of Karnataka could not manage the second square meal in a day. (p 72)

The White Paper on Karnataka states: "…the proportion of people below the poverty line in Karnataka was higher than the country average in rural areas, whereas urban poverty ratio was equal to the average of the country." (Emerging Economic Challenges and Fiscal Correctives in Karnataka)

Something to feel proud about? 33% of the flesh and blood of Karnataka are malnourished, they starve!

This economic system, which, in Brahmananda’s words, has done "extraordinarily well" by the "grace of some invisible force", has most ungraciously pushed people, not in hundreds and thousands but in hundreds of thousands, to the brink of human existence.

The oppressed peasantry, the working class, the petty bourgeoisie and the national capitalist class have had enough of this "development experience". And, the "possibilities" unfolding before them will be a nightmare if the rule of the compradors and landlords continues. Angry and frustrated, already the peasantry of Raichur, inspired by its brothers and sisters across the Andhra Pradesh-Dandakaranya-Bihar expanse, has supported the call to arms to destroy this oppressive system which stands for profit and feeds the masses on lies.

After duping the people about the state of the economy, Professor Brahmananda has the audacity to write: "The global investors from India and abroad should consider Karnataka as a safe and fertile soil to sow their investments. The people in Karnataka, to use the words of the great Karnataka savant, DV Gundappa, are ‘flowers in the forest’ their good nature, peaceful tempera-ment and non-aggressive, but hospi-table, postures will help to make the investments yield the desired fruit." (p 84)

This is perverse politics grown of dubious economics. Just as Brahmananda’s evaluation of the Karnataka economy has only been the precise opposite of what he has said it is; similarly, his reactionary political judgement, derived from his reading of Karnataka is deviously misplaced.

The "good natured, peaceful temperament and non-aggressive" nature of the people of Karnataka will turn into their opposite as they encounter their enemies—imperialism, comprador bureaucrat capitalism and feudalism.

Weapons in their hands, anger in their hearts, they will flash like lightning, settle their scores and win their world. "Flowers" will burst out as fire from the depths of the forest.

Adam Smith’s animated delight will be exorcised. With all the invisible and suppressed forces out in the open, Brahmananda’s divinity will be lynched and mortally scathed on the highway of revolt.

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