Volume 6, No. 7, July 2005



One Year of UPA

Continuation of the Policies of the NDA


There is really no difference in the policies of the two fronts. What the one does crudely the other does with the mask of a human face. Dictated by the imperialist policies of economic reforms, both the fronts resort to increasing dictatorial and fascist rule to stem the tide of people’s discontent against their policies. One does it with the aid of Hindutva, the other does it with soft Hindutva and a humanistic mask. The NDA crudely used the iron fist, the Congress keeps the iron fist in velvet gloves. And to add to the fraud the CPM with its regular futile noises helps to add further legitimacy to the policies which differ little from that of the BJP. No wonder the ‘Left’ was showered with praise from the imperialist’s biggest stooges in the country ….. none other than the very Finance Minister, Chidambaram and also the Prime Minister.

There has been much talk of a rural oriented policy of the new UPA government. This is an outright fraud and even where it had promised free electricity it has been quick to reverse these policies. Privatisation in all spheres has hit the rural economy the worst. In fact we see a growth in money lending, further reduction in government spending in rural areas, and acute marginalization of the rural poor. It has aggravated the rural crisis thereby resulting in an even greater number of peasants resorting to suicide. Besides the rural elite the agony of 70% of our country’s population that live in the rural areas has aggravated in this past one year.

Besides this, the one year of UPA rule has focused its prime attention on further speedening the speed of sell-out of the country and building up the instruments of repression. These two have been the twin aspects of a orientation set by the imperialist on whose instructions the comprador rulers act.

Major Sell-out of the Country

First, the policies have allowed for windfall profits to big business, like the massive subsidies, tax concessions, tax holidays, import/export concession and most important the change in labour policies to allow for increased exploitation of labour. So, some of the top 550 companies (private) in the last quarter of the year 2004-05 (the three months to March 31 05) increased their net profits by a massive 45.5%. This alone has given windfall profits of Rs.11,196 crores to these companies. Over the entire year companies like Reliance increased their net profit by 41% and Wipro by 56%. The top IT companies have increased their net profits by 40% over the previous year; the Cement giant, ACC has increased it by 81%. Many other’s profits have jumped even more. Big business is quite naturally thrilled with the new government. The PSU, SAIL’s profits net profits leaped a massive 171% in just the year 2005. Even the banks have seen their profits sky-rocket, with the State Bank of India’s net profits reaching the $ 1 billion (Rs.5,463 crores) mark in the year 2005.

In the year 2004 there was a 16% rise in the write-off of so-called non-performing assets (i.e. amounts owed by big business to the banks). Some companies have thereby got gifts as much as Rs.100 crores. So far a total of Rs.45,000 crores has been written off, much of it during NDA rule.

The next big achievement of the UPA rule has been to open up the country to the imperialists at an even faster pace than that of the earlier NDA rule. It is a competition between the two as to who can prove greater servility to the imperialists to be bestowed their favours. And this opening up is notwithstanding the presence of the CPI/CPM’s prop to the UPA. This is of course not surprising as the very initiator of economic reforms in the country is the present Prime Minister. The PM is a man who has not been elected and a bureaucrat with deep links to the World Bank/IMF combine. This has resulted in the just one year of UPA rule Rs.33,000 crore ($7.5 billion) take-overs of Indian and comprador companies. This figure far surpasses any previous year. In the previous year it was $4.5 billion. This then is the speed with which Indian and comprador companies are falling into the direct hands of the TNCs.

Yet another achievement is to pass the New Patent Bill to kill over 20,000 small scale pharmaceutical companies and allow the TNCs to hike medicine prices enormously to make even bigger windfall profits

Yet another big boon has been to the US company Monsanto and other such TNCs by the passing of the Seeds Bill 2004.

Other ‘big achievements’ in this sphere is the opening out of the telecom sector to 74% FDI, construction and real estate to 100% FDI, private banks to 74% foreign investment, allowing 100% FDI in export and wholesale trading, allowing FIIs to pick up upto 26% in print media companies, etc. Besides it has scrapped Press Note 18 (PN 18 was meant to protect the interests of Indian partners …. i.e. comprador’s ….. of joint ventures with the MNCs) to facilitate easier flow of foreign investment into all joint ventures with the Indian compradors. It has also relaxed FII norms in debt instruments with the result that the entire corporate bonds sold recently have been cornered by 6 FIIs. Even a new legislation has been passed on the SEZs (Special Economic Zones) to allow for even greater flow of FDIs into industries here. Imperialist capital is on the rampage swallowing up sector after sector thanks to the policy changes of the one-year old UPA government. FII’s have defacto control of the Bombay Stock Exchange with over 20% share in it. The percentage of foreign investments in all major companies has increased phenomenally in the past one year. In many they have taken control, in others they are on their way to take over total control.

It appears that the PM Manmohan Singh is taking direct orders from the big bosses of the TNCs of the US. The Chief of Wal Mart, the biggest retail company in the world visited the country amidst high pitched talk of allowing 49% FDI in the retail sector. He was wined and dined by cabinet ministers as also the Prime Minister. Close on the heels of this US business tycoon came the head of the General Electric. He too was given a royal welcome. This TNC giant says they already have $ 1 billion invested here and promised to buy up a host of Indian banks and industries in the near future. Hardly had he left the country that the Prime Minister made major statements on the need to step up privatization of the Electricity Boards and even electricity services. One wonders from whom he is taking his orders. Wal Mart is the largest company in the world and GE is within the top five. Never before have two chiefs of companies of such large and powerful TNCs visited India in so short a time. This shows their pleasure with the ruling Congress and UPA governments.

Yet another major achievement is chalking out massive plans to sell our natural wealth to the TNCs on a gigantic scale. In Orissa, which has 70% of the country’s bauxite (for aluminum production), entire areas have been handed over to these foreign sharks and their Indian compradors displacing thousands and thousands of Adivasis from their lands with little or no compensation. A massive 35 new steel plants are planned, of which one is a conglomerate from South Korea worth some $12 billion. In Chattisgarh diamond mines are to be handed over to foreigners. Now the government has an urgent plan for the privatization of the coal sector to hand over even this key raw material to the imperialists. The natural recourses of the country are being sold off at a pace not seen by the earlier governments. And for all the noise made by the CPM they are nothing but collaborators in these nefarious schemes.

The UPA government has particularly gone full speed ahead to sell off India’s financial sector. Thereby the entire money wealth of the country will be put in foreign hands. The continuous reforms in banking sector over the last one year are but one example. Now the FM has announced further sweeping ‘reforms’ in banking and infrastructure. He has also announced his intention to introduce a Bill in the monsoon session of Parliament which will allow for raising foreign investment in insurance from the present 26% to 49%. Not only this, the UPA also now seeks to open out the huge retail sector to 49% foreign capital AS DICTATED BY THE Wal Mart chief.

. This is not all. The UPA is busy hastening the pace of sell off of our entire water resources and even genetic wealth of the country. The speed at which the Delhi government is moving to clear the grounds for its sell off is just one indication. They have revalued the DJB’s (Delhi Jal Board) assets at a fraction of its real cost so that it can be finally sold off cheap, and have hiked the price of water about 5 fold to allow for big profits to them. This has enhanced the burden on the poor and middle classes whose back has already been broken by increased charges for electricity, health care, medicines, transport and basic food items. India has become one of the biggest centres in the world to for tapping its genetic resources and also the hotbed for clinical trials of new drugs, where the Indian people are being used as guinea pigs for foreign pharmaceutical companies. All these have increased apace in the one year of UPA rule.

Another major gift of the UPA government has been a massive hike in the import bill to a gigantic $105 billion and a skyrocketing trade deficit of $28 billion, which is predicted to go up to a massive $50 billion by the end of this year. Thus India is becoming more and more a dumping ground and market for foreign produce. Such a massive deficit is unsustainable and can push the country into a crisis unless there is a continuous flow of foreign capital. It is a trap where the nature of the development project adopted by the present rulers pushes the economy into a vicious circle that is more and more dependent on foreign capital. No wonder Chidambaram has been shouting for the urgent need for more FDI/FII to balance the growing trade deficit.

The UPA also has big plans for the privatization of the profit-making PSUs like BHEL, GAIL, BSNL, MTNL, etc. It has just announced a plan to disinvest 10% of its shares in BHEL and raise Rs.5,000 crores from disinvestment in the other four. The CPM looks on with its traditional noises of half-hearted ‘opposition’.

Finally, the UPA pushed through the VAT which has been a demand of the imperialist ever since the ‘reform’ process started in the 1990s. This will increase the tax burden on the masses and will crush much of the small traders or force them to face the harassment of the tax official.

And as such policies will have a disastrous impact on the lives of the people, the UPA government has taken up a systematic and long-term policy for unleashing the worst ever attacks on the masses, particularly those in the forefront of the battle.

Systematic smashing of all Resistance

Though the UPA government has focused its main attention for suppressing the Maoist movement, it has not hesitated to attack the poor in all ways possible. While waxing eloquent on rural development its policies have hit the rural population the worst.

There is not a single pro-poor step by the UPA government in the last year — in concrete terms. What may have existed is only in rhetoric, that too mostly of the CPI/CPM allies, which seeks to white-wash the black deeds of the Congress. The worst crisis is in the countryside. With Banks cutting their rural branches the peasantry is being forced deeper and deeper into the arms of the moneylender. With the existing agricultural pattern loans are necessary and debt is becoming one of the major problems of the peasantry, besides the land hunger of the rural poor. The UPA did nothing to halt the collapse of the PDS. Nor the fall in the purchasing power of the rural people. Rural jobs are down. Distress migration is leaping up. The Employment Guarantee Scheme brought in is a hoax (see article on unemployment in this issue).

In the last one year the Maharashtra government has demolished over 80,000 hutments making 4.5 lakh people homeless. The brutality of the attacks matches that of the Emergency in the slum demolitions at Delhi. This is part of the Vision Plan of Mumbai-based big-business plan to turn Mumbai into a Singapore. It is backed by the World Bank.

In Delhi the Sheila Dixit government, after winning the elections, has introduced measure after measure to tax the residents more and more and increase the burden on their lives. So also has been the case with all the state governments of the UPA.

Unemployment is continuing to rise and millions are being pushed to the edge, where survival itself is a growing problem. The peasantry has been the worst hit. Thousands are committing suicide each year and the tempo picked up in the one year of UPA rule. All its promises, like free electricity, Employment Guarantee, etc, have been gone back on. With the massive mining projects planned by the UPA government lakhs of tribals are set to be displaced and marginalized even further. In fact the burden on the peasantry, workers, tribals, and even middle-classes have only increased. Lakhs of small business have been forced to wind up.

Worst of all the UPA has been pushing ahead with lightening speed with the privatization of even water. Even this basic natural resource is not being spared from the ruthless profit machine. Delhi and Maharashtra governments are on the verge of taking the step towards privatization. The five major TNCs in this field are waiting like sharks to pounce on their prey. When it comes to improving the needs of the people, whether it is water, health, public transport, etc the governments’ claim to have no money. But when it comes to writing off thousands of crores owed as NPAs or by the fraudulent Enron, the funds do not seem to matter.

And with this has come the enormous plans of repression to stem the discontent of the masses. While making a show of scrapping the POTA it introduced an equally draconian legislation. Not one of the culprits of the gruesome pogrom of Gujarat has been apprehended and, till today about 130 Muslims languish in jail under POTA. Besides it seeks to incorporate all the draconian measures of the POTA in the very Criminal Procedure Code itself. The UPA government is actively going about trying to implement the recommendations of the Malimath Committee report. While the NDA could not implement it due to the opposition from the lawyers, the UPA is taking systematic steps to ‘educate’ the lawyers and bring in the suggested changes. It is working hard to instiutionalise all the legal instruments of repression. The Malimath Committee report is even more draconian than all the ‘anti-terrorist’ laws put together.

The brutality in J & K and the North East continue unabated. In fact it has been stepped up in Manipur which is continuing the struggle against the Indian occupation forces. It is now seeking to change the labour laws on a war footing to tie the hands of the trade unions even more. As it is even the smallest action by workers is crushed brutally. The smallest peasant unrest is suppressed. Dalit assertion has to continue to face the same violence of the ruling upper caste elite and is crushed brutally, with the police conspiring with the ruling elite at the village level. Though anti-Muslim hysteria is down, little is done to draw them actively into the social life of the country.

But the UPA, with all its sweet talk on the Naxalite problem being a socio-economic one, has put its major effort into plans for the long-term crushing of this movement. The UPA put on a liberal mask giving the impression that they seek talk with the nationality and revolutionary movements. But, this is nothing more than a mask to hide the intense military preparations being taken to suppress it. They very well know it is only the Maoists who can give effective leadership to the growing discontent of the masses. It is for this reason that they are focusing their major attention on the suppression of the Maoists. Never before has such a systematic plan been worked out against the Maoist of the countries. Also its brutality in AP, after the collapse of the talks, was on a scale that matched the massacres of the early 1970s in Bengal. Even the CPM has matched the terror of its partner at the centre. Recently the CPM government of West Bengal arrested two top leaders of the CPI(Maoists), the politburo member comrade Shome and the state secretary of the West Bengal unit of the Party. In the last issue of this magazine we have given a detailed account of the steps taken by the Centre to crush the growing Maoist movement in the country.

The Congress has sought to fool the people by pretending to offer the olive-branch of ‘talks’ with the armed organizations of both the nationality and revolutionary movements. It merely seeks thereby to diffuse these movements or divide them; and if neither work then launch even more brutal repressive measures. This is to be seen in the ongoing repression in J & K, Manipur and against the Maoists. Its ‘human faced’, further pinked up by its CPI/CPM allies, hides the vampire-like fangs.

Even after that one can understand the extent of the Centres preparations from the statement of the Minister of State for Home, Shriprakash Jaiswal, made on May 29th at Bhopal and reported in the Economic Times of May 30th. To quote, he said "the Centre would go to any level to gain control over the Naxalite problem and would not hesitate utilising the services of the army. Though force alone cannot solve the problem, we will go to any level to gain control over the Naxalites, even if it means using services of the Army." He further complained that funds of the Centre for this suppression are not being fully utilsed in the northern states. He added that "the money is under-utilised despite the Centre relaxing norms and by reducing amounts of matching grants which have to be given by the states from 50% to 40%, 40 to 25%, and 25 to 100%. …. We have decided to provide modern equipment like armoured vehicles and helicopters. AP and Orissa have agreed to bear 50% expenses and the machinery would be given to them".

Not only in this country, the UPA has even stepped up its expansionist and repressive policies in South Asia. From the very first days after coming to power the foreign minister vowed to give all help to the rulers of Nepal to crush the Maoist movement going on in that country. The statements made were even more aggressive than that of the NDA. The Congress’s foreign minister’s first visit was to Nepal for this very purpose. It also sabotaged the SAARC meeting due to be held in Bangladesh and have made open threatening noises against that country. It has been more actively intervening in the events of Sri Lanka and working to split the LTTE and prop up a renegade faction to promote internecine killings.

Such then are the ruthless plans of the UPA government to crush any discontent of the masses by brute force. Behind the human face of a so-called secular Congress-CPM combine one has the vampire-like policies of a monster which ahs a long tradition of serving the ruling classes from the times of British rule. Yet all is not bright in the UPA camp.

Factional Feuds and Internal Crisis

The massive and open feuds within the BJP have been the best performance aspect for the UPA. The public squabbling amongst even the leadership of the BJP/RSS outfits was so intense that all opposition to the UPA has been minimal. This has been its major asset and has hidden the factional feuds within it. In Bihar the infights were so acute that even a government could not be formed, with two UPA constituents treating each other as their major enemies. In Kerala a major section of the Congress (I) split and formed a new Party. In Maharashtra the relations between the Congress and the NCP has reached breaking point on a number of occasions. In Delhi the entire Congress leadership revolted against Sheila Dixit who continues due to her close links with Queen Sonia. At the centre a number of ministers are at loggerheads with others. Power, of course, unites them all, but the unity is fragile and can break with the smallest of disturbances.

The Fraud of the Dandi Yatra

The Congress with much fanfare sought to re-enact the Dandi yatra to shore up it ‘patriotic’ credentials. Vast funds were pumped in to stage this hypocritical jamboree. But at the same time the Congress has taken the maximum steps to crush the small salt producers and hand over the vast salt market estimated at over Rs.5,000 crores to the TNCs and big compradors by once again introducing a ban on non-iodised salt .

For example even while the Dandi March was on the government refused to implement a supreme court judgment to pay compensation of the land snatched away from local producers in 1974 on the basis of the very Salt Act of 1870. The original Dandi March was against this very Salt Act that that allowed the take over of all salt land by the British Government for revenue purposes without compensation. In 1974 the then Nehru government seized 3,000 acres of such land in Uran, off Mumbai without paying a single paise of compensation. This was done on the basis of that very Salt Act of 1870. The land was handed over to the JN Port Trust, which today leases out the same land to companies for Rs.1.5 crores for 30 years. The case has been going on for the past 30 years. The landowners won their claim at every level of the judgments, but the government refused to pay them, challenging the case in the high court and then Supreme Court. But even then when the judgment went in favour of the owners the government has refused to pay. Most of the owners have been reduced to acute pauperization by not only loosing their only source of livelihood but due to expenses incurred in fighting this cases for over three decades. The original owners are dead. Their children peruse the case and are also now reaching old age. The compensation would come to a huge Rs.600 crores which the government wants to swallow.

But on the question of salt the Indian compradors are even more cunning than the British. In the name of care for the health of the people an earlier Congress govt. banned all non-iodised salt. Iodine is necessary in the diet to counter the disease of goiter. Under the pretext that goiter is rampant it introduced this ban. But this has been proved to be false as goiter is only to be seen in some hill communities. It is not at all that prevalent in the country. This has been proven by many research reports. Yet, the rule persists. Even while introducing the latest ban, the report cunningly just mentions that the consumption of iodine has gone down, not that there is any deficiency of iodine. As the cost of machinery for producing iodised salt is expensive this will virtually crush all the small salt producers in the country allowing TNC and comprador companies like Hindustan Lever and Tata to monopolise the trade. They now are able to charge Rs.7 and more per kilo, where the cost of production will not be more than a few paise. The profits are huge.

In 2000 the BJP government lifted the ban on non-iodised salt. The Congress-led UPA government has again re-imposed the ban in June this year and given all small manufacturers two months notice. As 71% of India’s salt is produced in Gujarat, the BJP lifted the ban as the bulk of these small producers are with the BJP. This time not only does the government seek to wipe out the small producer but also the medium producer. It has said that it will soon bring in legislation for "compulsory double fortification of common salt with iodine and iron". This will make the production process even more capital intensive wiping out all the smaller producers. Such legislation will help the handful of big producers monpolise the trade in salt and will push up the prices of salt even more. This will open up a huge market to the TNCs as, for example, the consumption of iodised salt in a state like UP is only 10% of the total.

Like the earlier hoax of Gandhi to divert the attention of the masses from the militant action on the Chauri Chaura police station, so also the recent repeat performance is even a bigger hoax. If it is serious about allowing salt to reach the masses at reasonable prices and help the small producers it should remove the ban on non-iodised salt and immediately pay the compensation to the Uran people. But this they will not do, and to cover up their treacherous policies they will enact more such Dandis. But as was once said, history repeats itself, first as a tragedy, then as a farce. This present Dandi was a gigantic farce on the people of the country. Not surprisingly it attracted little attention and passed off without much notice.

It is these growing infights within the ruling classes and their parties that can help act as a stumbling block on some of their plans. Though they are fully united on basic policy — economic reforms and brutal repression — the widening cracks can paralyse action to some extent.

There is no real opposition to these polices of the UPA from within the framework of parliament. All are party to these games, with each seeking to gain the maximum for itself. On policy there are nominal differences. So any really opposition has to be built outside the framework of the parliament through a huge mass movement of all progressive and revolutionary forces. It is this and this alone that can act to beat back the reactionary polices of the UPA and their hangers on throughout the country.





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