Volume 7, No. 1, January. 2006

Mumbai’s Girangaon1  is in the news these days. In a spate of auctions in June and July 2005, the Central government owned National Textile Corportation (NTC) sold 47.69 acres of its mill lands for amounts totaling more than Rs.2021 crores. Each auction saw the rates rising sharply (see Table 1) and the last auction saw the Kohinoor mills land being picked up by a builder combine headed by Raj Thackeray and Manohar Joshi of the Shiv Sena at a phenomenal rate of about Rs 86 crores per acre. These sales cover a minor percentage of the total of 601 acres of mill lands at stake and there are many more lucrative pieces of land waiting to be picked up at even higher rates.

With the prices far exceeding earlier expectations, the dogfights which are on between various members and sections of the bourgeoisie for their share of the booty, can only be expected to worsen. Sundry battles are being fought out with various elements slugging it out at various levels and through varied means. From top ranking gangster dons to the hoods of the highest courts of the land, from corrupt politicians to the fixers heading the most hallowed industrial houses, tainted builders and notorious police officers, IAS bureaucrats and trade union bureaucrats, and even some unscrupulous architects and dubious environmentalists, all are salivating at their chance to partake of easy speculative earnings.

However, whatever be the internecine conflicts within these ruling cliques, they are one in their purpose – to convert Mumbai’s Girangaon into an upmarket enclave of posh residential towers, 5-star hotels, shopping malls, commercial complexes and entertainment plazas. This one-time centre of India’s first modern industry – cotton textiles – is being converted into a playground for the rich; and the working class is being evicted from its birthplace to provide one more building block in the enduring comprador dream to make Mumbai an international financial centre and global city on the lines of Singapore, Hong Kong, or most lately, Shanghai.

This area is an area rich in proletarian culture and history. It has always been bustling with industrial activity. The last few decades have however seen major changes in the nature of the Girangaon. Silent looms and cold chimneys now dot the mills landscape. The lure of greater profits to be gained in real estate and other service sector operations has led the mill-owners to rapidly find a variety of excuses to close down production in the mills. The production is outsourced and then the mill’s brand name is simply affixed on the cloth produced elsewhere. Resources from the mills have been deliberately sucked out by the owners to other areas in order to declare their mills as sick. The ‘sick’ mills are then closed down, workers thrown out and the mill lands sold or converted for use in other more profitable areas. This simple modus operandi has led to most of the mills in Mumbai stopping production altogether throwing lakhs of workers on the streets. An industry which employed over two and a half lakh workers in the early eighties now has hardly twenty thousand left.

This process started in the 1950s. At that time, due to the long history of pioneering struggles for DA, bonus, etc. of the textile workers, they were among the better paid workers in the country and could also force the implementation of most welfare legislation. Despite the installation in 1947, of a lackey union, the Rashtriya Mill Mazdoor Sangh (RMMS), as the representative union under the notorious Bombay Industrial Relations (BIR) Act, the mill owners were unable to crush the organized strength of the workers. They continued to fight spontaneously and through various other unions and could maintain to some extent the gains of earlier battles. Thus the mill owners started the process of outsourcing production to the power looms and dyeing-printing units of Bhiwandi, Malegaon, Ichalkaranji and Surat where 12 hour working days and low wage rates ensured a much lower cost of production.

There was a steady shift of cloth production away from the mills to the powerloom sector. While in 1951 the percentage share of textile mills in total cloth production was 78.6%, this fell to 53% in 1970, 42% in 1980, 24% in 1987, 8% in 1993 and a mere 4.2% in 2001. In other words today the bulk of cloth production is coming from the small scale powerloom sector, where wage rates are a small fraction of what was paid in the mills, enabling huge profit to be extracted. While the shift in the earlier period was due to the lower costs in the power looms, in the later period the main attraction for the Mumbai mill-owners was the boom in real estate prices. Thus from 1975 we see a drastic fall in the mills’ production with demands for permission to throw out the workers, close the mills and sell and transfer the use of the land for other purposes.

However, despite the collusion of the Congress-led RMMS, this was not possible due to the resistance of the workers. In fact, when many owners deliberately pushed their mills into losses and demanded closure, the government bailed them out by taking over the losses through the NTC, set up by the Central government in 1974. Though the work force did not grow, few workers were thrown out. The mill-owners, RMMS and the government got their opportunity however during the historic strike of 1981-83. Subsequent to the defeat of the strike more than one lakh workers were thrown out of their jobs. And the RMMS further entered into a spate of retrenchment agreements to again reduce the work force. Some mill owners refused to reopen their mills after the strike and many later closed their doors with the collusion of the RMMS.

However the main demand of the mill-owners to be allowed to sell the land or transfer its use could not be implemented in the face of opposition from the workers. The Datta Samant-led Maharashtra Girni Kamgar Union (MGKU) and other fronts like the Girni Kamgar Sangharsh Samiti (GKSS) conducted repeated agitations against this murder of the mills. But long years of struggle only succeeded in retarding and slowing down the process. Demoralization after the strike’s defeat, the sharp reduction in the number of workers and the absence of any recruitment of new young workers, the inability to make the mill lands an issue of the whole city’s working class and the total collaboration of the RMMS ensured that the workers’ resistance remained limited and never reached anywhere near the heights reached in earlier times.

The organized gangs of Central Mumbai led by Arun Gawli, Amar Naik and others also were brought into play by the mill-owners and the RMMS to attack and literally beat the workers into submission. Mills were burned down by the owners, both to claim insurance as well as to prevent any re-employment of the workers and to use it as an excuse to refuse to pay the workers’ dues. The Phoenix mills and Mukesh mills fires earlier, and the recent fires in Tata’s Swadeshi mills and in the Khatau and Sitaram mills are just some of the examples where the most nefarious means were used by some ‘respected’ names in industry in close nexus with the police, goons and government. With almost all the ruling class forces lined up and waiting to grab a share of the loot it was only to be expected that the mills would definitely be all closed down and pass into history.

During the period of liberalization and globalization however, the mill lands issue took on one more dimension. It was during this period that the Indian compradors started seeing for themselves a more global role in the system of imperialist exploitation. As part of this they started on a plan of developing and remodelling some of their mega-cities to play particular roles within the emerging imperialist globalization network. Bangalore, for example, was sold as the model IT base for multinational corporations, the Third World assistant to the USA’s Silicon Valley. Similarly Mumbai was to be pushed as a global city and ideal international financial centre (IFC), a nodal point for the regional operations of finance capital, operating complementary to, and at the next rung after, the prime centres of New York, London and Tokyo. Thus from the late eighties, we have had successive Chief Ministers of Maharashtra setting sights on reshaping Mumbai in the image of the more established IFCs in Asia, like Singapore and Hong Kong, and now after Shanghai.

The most vital element anywhere of such global city visions is however the systematic and forced segmentation of the city into sharply divided and separate rich and poor quarters. If a global city is to service the overlords of the world of finance capital, it must provide sanitised enclaves that will cater to the business, residential, entertainment, security and other needs of the very rich and their numerous chamchas. This automatically implies that these enclaves should be free of the presence of any signs of poverty. Since global cities are the progenitors rather than eradicators of poverty, the only method of creating such poverty-free centres is to physically evict the poor to the periphery. In Shanghai this was achieved by brutal state fiat, where resisting workers were fired upon and their houses, provided free under socialism, were bulldozed to open up space for gleaming office and commercial complexes.

Similarly, in India, every such ‘vision’ or plan has included the systematic and forced eviction of slums, hawkers and chawls, along with the ‘dirty’ industries that give the poor their employment. They are consigned to the corners of the city or even to some distant ‘backward’ area. Simultaneously it has involved the rebuilding of the city centres and the creation of glittering residential, entertainment and commercial complexes, hotels, malls and multiplexes that cater to the upper sections of society. With the mill-lands occupying the very centre of the city, in close proximity to the old central business district and posh residential areas, they naturally became the prime target of every urban planner dreaming of making Mumbai a global city.

They proposed the modification of the Development Control Rules (DCR) to permit the mill-owners to use the mill properties for purposes other than textile production. This was because, according to municipal development rules, the mill lands are reserved for industrial use, as they were by and large given to the mill owners at concessional rates by the colonial Bombay Government, to promote industrial production, and to develop the city and its hinterland. In fact most of the land is on lease and some of the leases have even expired.

The first modification to the DCR came in 1991, coinciding with the Manmohan Singh new economic policies. These new rules permitted portions of the "surplus land" within mill compounds to be redeveloped, and under rule 58.2, the funds accrued from this redevelopment were to be invested in the revival and modernisation of production, and in generating employment for mill workers. Alternatively, under rule 58.1, the spaces of the mills which were completely unviable were to be divided into thirds, one third for low-cost housing to be developed by the Maharashtra Housing and Area Development Authority (MHADA), one third to be developed for civic amenities like schools, educational and cultural institutions, housing infrastructure and open spaces, by the Municipal Corporation of Greater Mumbai (MCGM), and the last third was reserved for development by the mill owner.

Almost no one availed of the facility under rule 58.1 as it would mean handing over two thirds of the land for social use. But there was a spate of proposals under rule 58.2. Cases referred under the Sick Companies Act of 1985 to the Board for Industrial and Financial Reconstruction (BIFR) for tax breaks and financial amnesties for "sick industries" swelled, requesting permission to allow new development in the Mill Lands, under the guise of industrial revival and modernisation. With the willful collaboration of the RMMS it was easy to make false claims of development in the interests of the workers.

One of the first to avail of this break was Matulya Mills owned by the Mafatlals, which developed housing stock purchased en bloc by the Reserve Bank of India for its officers, and a commercial complex set up by Raheja builders. Kamala Mills followed the same route, with the Govanis as principal developers. Modern Mills reduced its workforce to only 250 workers while building a large luxury apartment complex complete with swimming pool on the mill land. A 42-storey building, Kalpataru, was built in the compound of Hindustan Mills, owned by the Thackersey group. The glittering Peninsula Corporate Park with 800,000 sq. ft. of premium office space was built on the premises of the Morarjee Goculdas Spinning & Weaving Mills. None of these mill ‘developments’ however served any of the workers’ needs. Neither was any new employment created nor were the company’s dues to the workers even paid. What in fact occurred was further downsizing and closure of what was left of the mills and their workers, and siphoning off of funds and incentives earmarked for investment in the industry. The Ruia-owned Phoenix Mills case was particularly notorious.

This phenomenon of ‘redevelopment’ was opposed strongly by the workers at every step. The GKSS and some of the unions led agitations against various mill managements and the government. However the successive Congress as well as Sena-BJP governments would give false promises at the time of elections but would quickly change over once in power. While playing lip-service to the workers’ cause, they would side with the millowner-builder lobby and continue to give permissions for sale and ‘development’ of the mill lands.

The RMMS during this period was taken over by Sachin Ahir, nephew of ganglord Arun Gawli, and former bodyguard of mill-owner, Sunit Khatau. This only made the strong arm tactics of the RMMS more blatant and in many cases workers opposing mill closures and land sale were attacked and even murdered. The contradictions among mill-owners, builders, speculators and mafia dons also started getting more vicious. Many gangland killings were also linked to the mill land deals. Even police encounters of gangsters were staged on the direction of the builders and mill-owners. This was also the period when the killings reached the doorsteps of the bourgeoisie itself. Sunit Khatau, was gunned down in his Mercedes in 1994, while Vallabhai Thakkar, the owner of Raghuvanshi Mills, was killed in 1997 in his car while traveling with the very gangsters who were to murder him.

1997 also saw the murder of Datta Samant, the leader of the historic textile strike, and a consistent opponent of mill land sale. Though the police saw to it that the actual assassins and conspirators were never exposed, it is generally believed that his opposition to mill and other factory land sale was the cause of his death. His union continued to oppose mill land sale even after his death but at a much lower key. Even the GKSS which had started in 1989 as a front to campaign for re-opening of closed mills, later shifted the focus of its demands to the monitoring of the revival and redevelopment of mill lands and state intervention to support displaced and unemployed mill workers. Datta Ishwalkar, one of the GKSS leaders, even formed a Girangaon Rozgaar Sangharsh Samiti to demand jobs for the children of the former mill-workers.

After prolonged agitation and negotiations with the government, some of the GKSS’ and unions’ policy recommendations were included in new policies for monitoring of sales of surplus land and escrow accounts to safeguard workers’ livelihoods. These were announced by the Government of Maharashtra in late 2001. The DCR was also then amended and a provision introduced that within the land provided for public housing, 50% would be set aside for housing textile workers, and an additional provision made for job
opportunities for the family members of the textile workers. However these provisions have remained and will remain only on paper, since the land now made available under the amended DCR is so miniscule.

This is due to another clause introduced in the amended DCR of 2001, according to which the land share of the mill owners has increased several times beyond the original one third. The land share of the MCGM, meant for creating open spaces and other facilities, as well as the land share for MHADA meant for public housing, have been reduced by more than 90%, often to nil. This was done by making the one third divisions applicable only to vacant open land in the mills, and removing land on which structures are, or were, standing, from the purview of the one third division. This would have made sense if the mills were still running and were thus unavailable for distribution. Since the mills are closed, the land available is logically the entire land, whether there are structures on it or not. In fact, the old mill structures have been or are being demolished, to make space for a real estate bonanza for mill owners, builders, and sundry other speculators, while giving nothing to the workers, or the city at large.

The new amendment thus opened the door for legal exploitation of the mill lands. New proposals started emerging and with some buoyancy in the long depressed real estate market in 2003 the pace picked up. Mammoth projects for commercialization of the mill lands kicked off. ‘Planet Godrej’ with five 40 storeyed towers on the Simplex mills, ‘Kamala City’ on the Victoria mills, malls, office space and residential buildings on the Mafatlal lands are some of the projects that have got under way. Ruby, Hindoostan, Morarjee, Swan, Khatau, Shree Ram, Shree Niwas, and Matulya are some of the private sector mill projects. While some like Khatau have sold outright, others like Mafatlal entered the real estate business through joint ventures with builders. Yet others have ventured out on their own. Even running mills like the Birla’s Century mills and Nusli Wadia’s Bombay Dying mill – among the few units still engaged in actual cloth production – embarked on plans to retrench the workers and develop their real estate. The NTC itself came up with the biggest proposal of all. It proposed to sell off 17 of the 25 mills under it, while setting up a 75 storey World Trade Centre on a sea facing mill plot on Cadell road and 16 lakh sq ft knowledge cum software park on two adjoining mill plots in Dadar.

All this was in sharp contrast with the ongoing government hype regarding textiles, where the lifting of international trade quotas from 1st January, 2005 was supposed to be the great big break for the Indian textile industry to increase production and exports. The textile ministry was announcing sops to big textile manufacturers claiming that they would be best able to compete in international markets and avail of the post quota opportunity to expand. But though Mumbai had the largest mills and the biggest names in textiles, none were willing to even consider continuing in textiles. The quick gains to be got from dabbling in real estate were far more rewarding than textile manufacture.

At the same time the urban planning departments were coming up with city plans that set the tone for the above type of development in the Girangaon. The Regional Plan for Mumbai (1996-2011), clearly based on the liberalization, privatization and globalization thinking had already set the tone. It stated that, "Greater Bombay has the potential to emerge as an international city, fostering growth of financial and business services, and hi-tech, export-oriented industries... It calls for an approach that would facilitate increased investment by the private sector in infrastructure and other developments".

It was followed by a report prepared by the multinational business consulting firm, McKinsey, entitled "Vision Mumbai - Transforming Mumbai into a world-class city". This report clearly outlined that its first objective was to "Boost economic growth to 8-10 per cent per annum by focusing on services (high- and low-end), developing hinterland-based manufacturing and making Mumbai a consumption centre." Thus the textile mills, like all other manufacturing, are to be pushed to the hinterland, while the city concentrated on services and encouraged the conspicuous consumption of the rich.

Further, regarding the mill lands, the McKinsey report, true to the global city ideology, proposes that the area should be converted into an enclave for the rich. It said, "Mumbai has the opportunity to create true "islands of housing and commercial excellence" in areas such as the Mill lands, the Port Trust lands and the Bandra Kurla Complex. These are relatively large tracts of land in prime urban areas. If they are redeveloped holistically to include high-class housing with earthquake resistance buildings, enough open spaces, 40-feet wide roads, excellent transport connectivity, urban plazas, hospitals, museums and retail developments on the waterfront, they can provide a model for the rest of the city. These world-class ‘islands of excellence’ will begin to attract both corporate investment and talent for high-end services." Thus this report clearly proposes that the Girangaon should be converted into an ‘island of excellence’ meant exclusively for the rich and financed by corporate investment. It does not even bother to consider that this has always been a working class area and even today has a vast working class section. It obviously assumes that this working class can be pushed out to the ‘hinterland’ to make way for the corporates and other high income groups.

The McKinsey report was presented in September 2003 with investment targets of Rs. 200,000 crores upto 2013. The Chief Minister of Maharashtra immediately gave recognition to the report and in October 2003 set up a top level task force of bureaucrats and industrialists to implement an Action Plan according to the report. Despite strong opposition to the McKinsey report from all progressive sections, the CM’s Task Force has adopted all the key suggestions of the report and is going ahead with implementation. The brutal eviction of lakhs of slum-dwellers and hawkers in the first few months of this year has been the opening salvo of this vile Action Plan.

The anti-worker nature of the task force and the sharp marginalization of the organized workers can be gauged by the fact that this time the government has not even bothered to appoint a single trade union representative, even from the lackey RMMS. This also represents to falling proportion and importance of the organized working class in the city. While the proportion of organized manufacturing was half of the work force in the 70s, the proportion of informal labour alone was 68% of the work force in 2004. The mill situation is even worse. The estimated 20,000 mill workers remaining are rapidly reducing and even those around are mostly in their late forties and fifties – recruitment being zero since the last twenty years. The GKSS and non-RMMS mill unions are also at a low ebb and there has not been significant resistance or agitation by the workers against the 2001 DCR fraud of the Maharashtra government.

It was an environmental group, the Bombay Environment Action Group (BEAG), which, more than three years after the amendment, challenged it in court in 2005 through a public interest litigation (PIL) petition also claiming that environmental and other laws are being violated in the process of commercialization of the mill lands. They enumerated various permissions which the builders had not obtained before embarking on their mega-projects. As the petition came up, some office-bearers of the petitioner organization were themselves accused of being in cahoots with a group of builders with interests in North Mumbai, whose projects will be hit by development of real estate on the mill lands and thus the petition was painted as motivated by certain sections of the media. This group was also responsible for the cruel demolition of 80,000 hutments in the slums of north Mumbai. But whatever be the motives of the BEAG, it’s petition has unleashed another round of skirmishes over the mill lands.

On April 1st 2005, the Bombay High Court passed an interim order restraining the MCGM/ state government from giving the mill owners fresh permission to commercialise property until the MCGM/state government submitted documents relating to these lands. Rather than submit documents, the authorities went in appeal to the Supreme Court, where on May 11th 2005, they partially lifted the stay. This led to the earlier mentioned spate of NTC auctions (Table 1). Now the case continues in the High Court and, as it proceeds, more horror tales emerge of how the mill-owners, politicians, trade unions and sundry other authorities have been conniving to dodge old laws and enact dubious new ones in their common endeavour to plunder the mill lands.

At one hearing it was disclosed that that most of the mill ‘owners’ were not owners but actually lease holders. Further, the lease of many had actually expired and not been renewed making them unauthorized occupiers of the land which they were trying to sell. Some of these were Raghuvanshi Mills, Shree Ram Mill, Morarjee Mills, Simplex Mills, Khatau Mills and Phoenix Mills. Though the court asked the authorities for the complete list, it has yet to be submitted.

As should be expected, the stands of the government have been shifting and suspect. It gave varied statements, until, on 17th Aug. 2005, in a new affidavit, it said that the 2001 amendment was done on the basis of the urban development department’s view that unless the mill owners were given more land, "revival (of the mills) would not be feasible or possible". Such a blatantly fraudulent view was submitted at a stage when it is clear to all concerned that the ‘revival of the mills’ is a concept remotest from the minds of all the parties involved. The urban development department itself is the author of the Mumbai plans and ‘visions’ that plan not to revive but to replace the textile mills. Even the BEAG is only interested in the environmental aspect and is not bothered about or demanding any revival of the mills.

The RMMS, who has also opposed the BEAG petition, took a similar sham stand when it claimed in court that sale of land is in the workers’ interests and the only way in which their dues can be paid. This after the mill sales have in most cases not resulted in a single rupee being paid to the workers. In fact the RMMS has been one of the main champions of the sale process. The only time when RMMS leader Sachin Ahir, found fit to oppose any sale was when the Kohinoor Mills went to the Shiv Sena’s Raj Thakre – Manohar Joshi group. He, being from the Nationalist Congress Party (NCP), was probably mourning the loss of his cut on such a major deal.

Perhaps similar concerns have also led to the ‘opposition’ of Milind Deora, Lok Sabha member for South Mumbai, and son of one of the prime representatives of the Mumbai compradors. He, in January 2005, approached Congress president Sonia Gandhi regarding the mill land issue and followed it up with a letter on 15th August 2005 to Chief Minister Vilasrao Deshmukh, urging him "to rescind the amendment to DC Regulation 58 and ensure equitable distribution of land to MHADA, the BMC and mill-owners". Deshmukh, on Sonia’s behest, formed a committee in January 2005, "to examine the feasibility of integrated development of mill land to study the existing DC rules" and to "suggest ways for enough land to be available for open use and public housing, without jeopardising the workers’ and financial interests.’’ The committee is headed by Deepak Parekh, chairman of HDFC, which has itself lent hundreds of crores for various mill land projects. Other members include NTC and Mill Owner Association representatives and some of the main stalwarts of the task force implementing the McKinsey vision. There is not one workers’ representative or any one who can be expected to even express the people’s viewpoint. Considering its composition, the conclusions of the committee are quite clear even before it submits its report.

Not much different will be the outcome of the 133 page report submitted before the High Court by the Maharashtra Pollution Control Board (MPCB) on 1st September, 2005. In it, it has stated that 12 mills had launched construction activity without obtaining the mandatory consent and environmental clearance from the Central government under the Environment (Protection) Act, 1986. All have obtained commencement certificates from the MCGM and have advanced substantially in setting up the structures. The Morarjee project of four residential towers totaling 140 storeys has already reached the fifteenth floor. Since such major construction is not possible without active connivance of the authorities, it is thus obvious that environmental considerations have never been a barrier to the type of ‘development’ that the mill lands are experiencing.

In fact the BEAG court proceedings themselves can only be expected to be a minor irritant to those bent on taking over the Girangaon. As has been proved time and again, unless there is determined opposition from the working people, the bourgeoisie will, without doubt, implement what it sees as in its interests. So far the court proceedings are mainly being used by those sections of the ruling classes who either stand to lose to some extent or have yet to receive what they consider their rightful share of the loot. The North Mumbai builder group mentioned earlier was reported to have met some BEAG office bearers to lend their support. A leading North Mumbai builder and one of the biggest names in the business today is Niranjan Hiranandani. He loses no opportunity to talk to the media against the "unrealistic" prices of the mill land sales and lament that they will take housing "out of the reach of the middle class." He has also been supportive of the tightening of bank credit for such deals and projects. It is likely that such elements would even try to use various authorities to serve their ends.

But when tens of thousands of crores are at stake no court will be allowed to disturb things for long. Even if a quirky judge or two passes an order interfering with the process, the judicial system and the government will not sit quiet. This could be seen in May 2005 when the Supreme Court, despite the summer court vacations, lifted the High Court stay on the NTC auctions, within a month. And even if some judicial ruling were to hold, the bureaucracy and other sections of the state machinery will certainly use other executive or legislative means to take ahead the process. After all when major sections of the comprador big bourgeoisie are standing to gain directly and when the class as a whole is firmly behind Vision Shanghai, and when the masses are not now able to put up notable resistance, the state machinery is bound to use all means to clear the path for the transformation of Girangaon.

It is this certainty that is driving the furious charge on the mill lands. Judging that the government is supportive and will most likely bail them out in case of a crash, speculators in all shapes and sizes are testing their fortunes on an increasingly dangerous field. Their operations are rapidly pushing up the land prices making it more feasible for funds to be attracted for the various visions that the government is pushing. Thus ruling class and government too need the speculators as much as the speculators need the government.

One of the principal speculator firms, which picked up two of the five NTC properties, has appropriately named itself Indiabulls. It is actually a stock-broking firm formed just five years ago, with Laxmi Mittal (steel magnate and one of the world’s richest men) as one of the financial backers. This is the first time it is entering into real estate for which it has established two linked firms Indiabulls Real Estate and Indiabulls Properties. While the bullish Mumbai stock market may have provided Indiabulls some surplus funds for playing on the real estate market, the main source of funds for the mill land purchases is American. Farallon, a San Francisco based risk fund is 60% owner of Indiabulls Properties. In August 2005, Indiabulls also raised $150m (around Rs. 650 crores) in New York through global depository receipts in order to fund its recent property purchases. The main funders were some of the principal international speculators and finance capital manipulators – Goldman Sachs, Merrill Lynch and Fidelity.

The other big operator, who picked up the largest plot from NTC, is the DLF group. It’s owner, Kushal Pal Singh is reputedly the richest realtor in the country today with 22 malls and a group net asset base of Rs 15,000-20,000 crore. Known as the man behind Gurgaon, his dealings in this suburb of Delhi have helped create a property price bubble there. As this area has started the process of collapse, much of his mall space there now remains unsold and he is moving to greener pastures. Obviously after creat-ing a similar bubble and collapse on the Mumbai mill lands, he can again move on.

Politicians are another parasitical group aiming for speculative gains. Perhaps their confidence in their ability to bypass all rules and regulations has made them jump in the fray for the mill land. The NTC’s Apollo mill property was picked up by Lodha, a builder and BJP MLA. And the record breaking price for the Kohinoor mills property was paid by a group of four firms owned by Shiv Sena leaders. One of these is in the name of former Lok Sabha speaker, Manohar Joshi’s son, Unmesh. Sena supremo Bal Thackeray’s nephew Raj is partner in the other three firms formed with friends and old compatriots from the Bharatiya Vidhyarthi Sena. Raj has been well using his uncle’s clout to build up his business empire. He has even built up contacts internationally and made a London visit in July 2005, just before the Kohinoor auction, to raise funds for the deal. Besides the foreign funders, a substantial part of the amount is black money earned in politics, which had been stashed away in tax havens abroad. As the Sena’s inner party fights sharpened, these details were disclosed by Sena defectors to the Congress, leading to CBI raids on the finance company who managed the operations. The irony is that it is these very same politicians who have, at every election, vowed to protect the Girangaon and prohibit the sale of mill lands. Most of the MPs and MLAs of the Girangaon have over the years been from the Shiv Sena. Manohar Joshi himself was MLA and MP for many terms from these parts. Yet it is these very same prohibitors and saviours who are unashamedly seizing the opportunity of grabbing crores by murdering the mills.

While these and other wheeler-dealers rush to grab a share of the spoils the prices of real estate are jumping by leaps and bounds. The early pre-NTC sales went for comparatively lower prices – Standard Mills (Rs 130 crore), China Mills (Rs 53 crore), Khatau Mills (Rs 98 crore), Srinivas Mills (Rs 200 crore). But with the the record-breaking NTC sales generating excitement in speculator circles both in India and abroad, the deals that follow can only be expected to raise the rates to new heights. There are at least 18 properties in the pipe line with many parties hungrily eyeing them.

Meanwhile companies who have purchased the land as well as those that have land to sell are seeing a boom in their stock prices. Indiabulls market capitalization has increased during recent months from just 200 crore to around 3000 crore. Bombay Dyeing with 70 acres of mill land and Morarjee Realties are among other companies seeing their stocks boom. So is the case of other companies with industrial land for sale even in other parts of the city. Thus the mill land sales are not only fuelling the real estate market throughout the city to new heights but also contributing some bit to the stocks build up.

But boom time at the auction-block and stock exchange will sooner rather than later lead to bust. Already the rates of the latest Kohinoor auction have reached the level where it would be necessary to sell the developed property at a minimum of Rs 20,000 a square foot in order to make some profit. The current rate in the area is however ranged between Rs 8,000-10,000 per square foot and only a bout of frenzied speculative buying could push the market to the levels required by today’s buyers.

The McKinsey report writers and Shanghai visionaries however advise that there is full scope for such rates. They argue that if the land is directed primarily for high end users like malls, 5-star hotels, Info parks and other commercial space the rates would be viable. They had pushed for the recent opening up of hotels and real estate for foreign direct investment (FDI) and are further pushing for similar concessions in the retail business that will bring in retail giants of the likes of Walmart, the world’s biggest corporation. With this they expect the foreign money to flow that will prop up the real estate rates. ‘Experts’ like international realty firm Knight Frank claim that India’s mall rentals are among the lowest in the world and that there is enough scope for increase in rates (see chart ). They similarly provide contrasts for the intended posh hotels and entertainment complexes. What such experts however ignore in such international comparisons is the reality of the Indian economy which renders higher rental rates totally unfeasible.

For example, according to the same Knight Franks estimate, around 55 new malls, with approximately 15 million square feet of space, will be added by end 2007, to the 22 malls already existing in the Mumbai Metropolitan Region (MMR). With the rapidly rising real estate prices such malls need to have an extraordinarily high turnover to avoid loss. But since such malls cater to those from the upper sections they would find it impossible to get a large enough customer base to increase their turnover beyond a point. Mumbai is a city with 50% in slums, 8 lakh registered unemployed, and 68% struggling to eke out a living in the informal sector. These are hardly the sections that would ever be able to provide the demand which the mall operators need. Thus the scenario of the shining malls and multiplexes becoming totally unviable does not seem quite distant. As mentioned earlier the process has already started in Delhi’s satellite city of Gurgaon. Today, big malls in Gurgaon, such as the DLF Mega Mall, have huge unoccupied spaces more than 18 months after opening (others in the region are delaying opening due to the paucity of tenants) and the number of shoppers there is also pretty low. With the recent mill land sales raising prices rapidly throughout the MMR, the same fate seems likely there too.

This may seem similar to the cycles of boom and bust that endemically plague capitalism and its brightest sectors. This time however the boom is more dangerous as a significant part of the financing is being now done through the banking system. Funding to the real estate sector almost doubled between March 2004 and March 2005. Though the RBI has yet to release figures for last six months it can only be expected to have risen at the same pace if not more. ICICI Bank (Rs 4,350 crore), Punjab National Bank (Rs 2,920 crore) and Bank of India (Rs 2,836 crore), are some of the banks who have lent substantially to the real estate sector. It is also quite clear that most of this new financing is purely for speculative purposes, because during the same period when real estate loans rose by almost 100% the loans for actual construction only rose by 16%. Thus the banks are mainly financing the inflation of real estate prices without actually creating any real value through construction.

Since such lending is against collateral of the real estate assets there is obvious danger to the banking system when the assets are priced at artificially inflated levels. When the real estate bubble bursts the borrowers often cannot or do not return the loans and the banks find it impossible to recover even a fraction of their money. It was a property bubble burst of this type that, during the early nineties, led to the collapse of several large banks and an economic crisis in Japan, from which it has yet to completely recover. A similar sequence of events caused the East Asian crisis in the late nineties, wiping out the savings of common people, while the imperialist financiers protected themselves by rapidly withdrawing all funds.

As banks in India in search of profits get more and more immersed in similar risky operations the dangers to the banking system, the economy and the common man are quite clear. However despite the recent spurt in prices for the Mumbai mill lands giving all the indications of a property bubble building up, the Reserve Bank of India (RBI) has not taken any significant steps. It merely sent out an advisory issued by way of an internal circular which cautioned the banks to be careful while funding real estate. Then in late July it raised the risk weight assigned by banks to their loans on commercial property to 125% from 100%. Such steps however will not result in any stoppage of loans to this sector. It will only raise the cost of the loans which will not be a major hurdle to a speculator in a rapidly rising market.

Meanwhile it is the government’s policies that are ensuring that funding of the property bubble will not dry up. As mentioned earlier, some of the biggest names in imperialist finance are rushing in to seize the opportunities thrown open by the opening up of real estate to FDI in February this year. Besides those mentioned earlier, giants like JP Morgan Asset Management and General Electric Commercial Finance have also launched or invested in Asia specific funds which will be investing in commercial projects in India. Other foreign institutional investors (FIIs) are looking for deals themselves. The Indian financial compradors are also not far behind. HDFC, State Bank of India and ICICI have already launched property funds. A major component of all these funds can be expected to fuel the speculative prairie fire in the Girangaon, with all its hazardous portents.

However, despite the obvious dangers of speculation spinning out of control, the moot question that remains is whether the government and the RBI actually have any options to what is essentially a systemic problem. The periodic pumping of thousands of crores into speculative bubbles is essentially due to the limited opportunities for investment in industry in our country. The backward relations of production that hold back the development of the vast rural hinterland have for long ensured the strangulation of the home market, thus stunting the growth of industry and the economy. But the big bourgeoisie of India has long had a reactionary pact with its landlord ruling class partners to preserve these relations. Thus all ‘visions’ of the bourgeoisie remain limited by its unwillingness to break these relations and thus create the conditions necessary for a vigorously expanding home market.

The earlier ruling class solution has been of an export-oriented growth strategy. But this too, being tailored to the needs of the multinationals, was doomed to failure. The past few decades have proved that the imperialist bourgeoisie will not permit access to large enough foreign markets that could help to comprehensively industrialise such a large society as India. And the Indian bourgeoisie, born dependent on imperialism, could never muster the capacity to fight resolutely to prise open these markets.

The current imperialist-comprador way out is to bet on the consumption-driven growth of India’s economy by spawning glitzy shopping malls, entertainment centres, multiplexes and luxury hotels for the topmost 10-20 percent sliver of Indian society, while at the same time being a cheap outsourcing services centre for imperialist corporations. Besides the consumerist decadence that this approach engenders, essentially, such maneuvers are only an attempt to wish away the rural reality and its urban consequences. Being riven with numerous contradictions (which cannot be detailed in this article) they are doomed to failure.

As this ruling class strategy fast reaches its limits, it is only but logical therefore, that it should fuel repeated rounds of hectic speculation as is being seen currently in the real estate, stock and other markets. Capital that cannot find profit in the sphere of production is bound to look for returns via speculation and other dubious means in the sphere of circulation. While this speculation may seem irrational and definitely is harmful to society and the economy, it provides super profits to the biggest and most unscrupulous operators. It is mainly the middle and lower classes and the smaller operators who bear the burden of the market crashes, bank collapses and recession that follow a speculative boom. And as the markets hurtle towards another boom-bust scenario the government and the RBI will only play the role of observers, if not collaborators. They being at the heart of the problem cannot be expected to provide a solution.

The solution will emerge from every pocket of struggle to this warped and decadent model of development. It will emerge from the lakhs of workers thrown out of their jobs to provide real estate gains for their mill and factory owners, it will emerge from the millions thrown out of their homes to implement the Vision Shanghais of their rulers, it will emerge from the crores of rural victims of this vicious path of ‘development’. The ruling class has so far managed to contain or overcome the resistance through repression or deception. But the conflicts are growing – conflicts that hold the promise of the final solution.

But where is this real solution? The textile mills of India gave birth to the communist movement in the country and have a glorious history of struggle. But where are those communists today? They have been betraying the workers time and again for a few crumbs from the comprador table. It was the outright betrayal of the CPI leadership that dominated the Mumbai textile industry for decades that saw the workers switching enmass to Datta Samant cursing what they thought were the communists. In the historic 1981 strike the CPI/CPM was nowhere to be seen. Today, they have come out into the open and the revisionists are part of the gang that rule the country. No wonder they are silent at the mafia games being enacted in Giringaon. Militant trade unionism came to a tragic end with the brutal murder of Samant in broad daylight in front of his own house. Giringaon, the hotbed of the Lal Bavta (Red Flag), became a key centre of the fascist Shiv Sena. If the CPI/CPM type trade unionism is impotent; if militant trade unionism is crushed; if the workers are being attacked day-in-and-and-day-out without any recourse to defensive action ……. Where then is the final solution? The failure of the textile strike witnessed hundreds of workers take their lives, and thousands more live in utmost penury. Over one lakh workers were dismissed without even the strike-period pay, let alone the dues for years of work. Half a crore lives destroyed.

The answer for the workers can only come from revolutionary working class struggles which give the workers the strength to take on not only the manage-ment, but also the mafia and the revisionist betrayers. The struggles of a revolutionary united working class movement, which will take the battles from the factories to the bastis and colonies of the workers, to strike at the elite establishments of the ‘sanitised’ super-rich enclaves. From Giringaon to Gurgaon. From a dying industry to a display of militant working class anger. The rulers came down brutally in Gurgaon as in Giringaon; hundreds injured, many arrested and numerous ‘missing’. The moneybags and rulers will show no mercy to any attempt at reducing their profits. The workers too need to learn from the defeats of Samant and Gurgaon and restore the great traditions of the working class to Mumbai and the rest of the country.

While the court order may provide temporary hope to the mill workers and chawl dwellers who are facing the immediate impact of the destruction of the mills, it must be clear to all that no court order can be expected to provide any lasting relief. Unless there is sustained struggle and resistance from the masses and affected sections, the ruling classes will do just as they have planned.

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