T. Lakshminarayana
Director, NRR Research Centre, Hyderabad
The course of social development in
post-independence era is basically capitalist path of development. In its long
journey of 65 years the state abolished princely states and feudal landlordism,
introduced radical agrarian reforms,
and socialized main means of production and implemented
mixed economic policies. But since 1980s
and 90s the bourgeoisie state reversed its philosophical understanding and with
vengeance following neo-liberalism and reached a stage of building crony
capitalism.
Nationalization of the means of production: After
independence the national bourgeoisie came to power. There was concentration of
capital in some spheres, and certain growth in banking. A few
influential big business groups also grew among the ranks of the Indian
bourgeoisie. A number of undertakings belonging to the British groups were
bought out by this section of the bourgeoisie. The Indian Railway system which
the British government had already taken over from private British investors
came into the hands of the state with the sterling reserves that had
accumulated to the credit of India. Nationalized railways became the first item
to mark the beginning of the state sector in Independent India.
During
the national liberation movement democratic elements, inside the Congress and
far-sighted representatives of the bourgeoisie; as well as leaders of the
Communist movement and the working class movement had advocated a broad policy
of industrialization in order to overcome the colonial backwardness of India.
The struggle for development of economic independence was necessary to
strengthen the political independence that India had won. This was against
the interests of imperialism. The
imperialists tried to keep the Indian economy tied up to imperialist finance
capital through offers of “aids” and schemes like the Colombo Plan. In spite of
vacillations and compromising policies Indian bourgeoisie led by
Congress broadly persuaded independent economic policies in their own interest
and decided to follow capitalist path of development.
In
the meanwhile the socialist world had made tremendous advance and was prepared
to give selfless help to India’s aim of independent economic
development. The growth of the democratic movement and its demand for economic
advance made the government to mute its vacillations and establish contacts
with the socialist countries and to formulate policies accordingly. Measures
which reserved certain strategic industries for the state sector, and
undertake certain measures of nationalization helped to mobilize internal
resources for planning growth and state got control over the finance. This
initiated the establishment of state sector industries. These measures
obviously did not concur with the policy of the imperialists. The top big
business sections of the Indian bourgeoisie wanted the state sector to be
restricted to defence industry, transport and public utilities, leaving the
whole field of industries free for the private sector. Experience shows the
growth of the public sector helped the growth of the private sector.
The Soviet Union and other socialist
countries extended a helping hand without any vested interest to India in
building heavy and strategic industries. New branches of industry and projects
which emerged as a result of socialist aid have gone a long way to eliminate
the legacy of the colonial past and reduce India’s dependence on the capitalist
world market for trained manpower, materials and machinery. All this was however within the limitations
of the capitalist path of development, even though the government policies were
inhibited by the narrow class interest of the bourgeoisie. The
public sector in the country’s economy is nothing else but state capitalism.
This development of capitalism since independence suffers from all inherent and
inevitable contradictions, crisis and serious limitations of the capitalist
system and its basic laws.
This form of state capitalism makes the
task of socialization of the means of production easier. Socializing of
the means of production will be the driving force for the Indian economy,
rather than the capitalist quest for super profits. It will help the development
of the material and spiritual life of our people, making it possible to use
planned management of the economy to withstand repeated economic recessions. Of course the state draws the resources for industrial and
economic development by laying increasing burden on the common people, mainly
in the form of growing indirect taxation, inflation, fleecing the peasantry
through the market, intensifying exploitation of wage labour etc. Therefore there is increasing contradiction
between growing industrial production and low purchasing power due to
impoverishment of people.
In the industrial field, social
ownership of the main means of production will play a leading role,
private sector, joint sector, cooperative sector, small-scale sector etc. in
specific spheres will co-exist and interact in the over-all economy. Public sector will help to effectively regulate and
check further environmental destruction and the widening social and economic
gap. Socialization of the means of production
can take on a variety of forms of ownership, control and management according
to the situation and condition that will suit our country. The road to
socialism in India will be a process of new challenges, giving rise to new
problems. They will be solved by the collective wisdom and creativeness of our
talented people. Obviously socialist advance will be based not on the negation
but the further development of all the valuable gains of the capitalist
era. People should have clear picture of the objective for which they
are fighting for as well as the course of social development in our
country.
Growth and role of Corporate Sector: One
of the most striking results of pursuing a path of capitalist development is
the concentration of capital with economic power in the hands of a few big
monopolies that enrich themselves at the expense of the people and even the
other broad sections of the Indian bourgeoisie. These monopolies represent a
combination of industrial, banking and marketing companies. The big monopolies
who have grown into specific corporate entities not only hold strong positions
in their own private sector but also have infiltrated into the state sector and
use “public money” for their own aggrandizement and maximum profits. They
aggravate the economic crisis by fostering price rise, corruption, hoarding and
black marketing
Driven
by the big bourgeois interests, the state even discriminates against and neglects the
small-scale and tiny industries, and repeatedly withdraws several items from
the list reserved for the Small Scale Sector. The small-scale and tiny
industries are playing an important role in the economy by
contributing 40% of industrial output and with 35% share in exports and employ
about 2 crore workers. Government has also lifted the cap on the FDI in the SSI
sector. This will enable foreign capital to take over many
small-scale units, particularly those which are hi-tech, in the name of
technology transfer. There is a growing contradiction between this section of
the bourgeoisie and the corporate and big bourgeoisie.
In
the political sphere they seek
to consolidate right reactionary forces, encourage the communal parties,
influence the ruling party for their narrow class interest, unleash an
offensive against all progressive policies and mount onslaught to disrupt and
defeat the left and democratic forces. They seek to subvert the foreign policy of
Non-Alignment and give it a pronounced pro-imperialist, specifically pro-US
orientation.
Neo-liberalism: From
the late eighties and nineties, a new set of policies of economic
liberalization is being increasingly pursued. They have now crystallized into
the policy of ‘neo- liberalism’ boosted as ‘economic reform’. Following the
demise of the Soviet Union and the collapse of the socialist countries in East
Europe, imperialism headed by US and their international agencies such as IMF,
WB and newly established WTO have stepped up their offensive for a “Free Market Economy,” for
carrying through Liberalization, Privatization and Globalization.
Some of the basic industrial and commercial
undertakings and certain key sectors of the economy are already in the public
sector. Under neo-liberalism the state is constantly pursuing to reduce
public equity and eventually privatize them. Latter it tried to expand by
inviting foreign private monopoly capital in partnership with itself. Through
such collaboration agreement foreign monopoly capital seeks to penetrate and
influence India’s national economy including the state sector.
In pursuance of this policy several public
sector undertakings have been dismantled and privatized by selling government
equity in them. Even the equity in nationalized banks is sought to
be brought down, as a prelude to their ultimate privatization. Corporate
Houses and Big Businesses are being invited to open new banking concerns. They
are now touting a new concept, viz. ‘Public Private Partnership’ which is
actually a public mask for private aggrandizement.
Liberalization has meant ‘free trade’ under
the WTO regime. While the imperialist and developed capitalist countries have
forcibly prized open our markets for their goods and for acquiring a grip over
our raw material resources they have themselves taken care not to reciprocate
by opening their markets by brazenly mounting several non-tariff barriers
against the developing countries. In its eagerness, to woo foreign capital, the
government is even discriminating against our own industrial structure
particularly in the public sector. This is a process of guaranteeing private profits at public risks.
The people are treated to a lot of
propaganda about “Free Market” and
‘Competition’ as the desirable goals of modern economic and social life.
It is true that developing capitalism in the earlier phase fought vigorously
for free market so as to remove all obstacles to the free flow of capital and
commodities. But experience shows that competition gave rise to the
gradual concentration of production on a large scale, which at a certain stage
of development led on to monopolies and corporate entities. It continues
further through a series of mergers and acquisitions, pirating of equity shares
in order to gain effective control, cartel arrangements for
sharing the market, collaboration agreements between MNC’s and local
monopolies. The rise of the MNC’s is a feature of monopoly growth based in the
most advanced capitalist countries.
There is a virtual competition among the
developing countries including India for attracting FDI. With the ‘open door’
policy and the red carpet treatment meted out to foreign investors specially
the MNC’s, what is missed is that the bulk of FDI is determined by the search
for natural resources and markets, such that the labour cost -differential
makes it more profitable to invest rather than export commodities
from the home country. Some sections of the local bourgeoisie in the developing
countries whose interests are hurt have no choice but to cry out for a “level
playing ground”, that is to say, ask for similar concession and facilities for
themselves. This is sowing the seeds of contradictions between the local
bourgeoisie and the bourgeoisie of the advanced capitalist countries notwithstanding
the collaborationist role played by the monopoly sections aided and abetted by
the government. There are some Indian corporate houses which have grown to
such an extent that they are aspiring to become world players, and have even
managed to become so.
To make up the need for capital investment,
foreign capital, whether from the U.S. or any other country is welcome if it
helps the growth of productive forces, brings in new and advanced technology
and opens up fresh avenues of employment.
The
monopolizing of innovations and technology has reached a stage that
“Intellectual Property Rights” (TRIPs) has been mandated to an international
treaty. Hitherto in our patent laws we had tried to balance the interest of
patent holders with public interest. But under the new patent regime it will be
difficult to ensure the primacy of the public interest. Patent holders are
often the multinational corporations.
The
Structural Adjustment Programme, the Dunkel treaty were both latest ploys
of imperialism. “Market fundamentalism”, monopoly of high technology, grip over
communication and media, international trade dictated by the WTO regime are all
weapons pressed to that end. This is imperialism in the epoch of the scientific
and technological revolution and the rise of International Finance Capital. The
task of fighting imperialism remains a priority for carrying forward the
democratic revolution.
Economic
growth: It measured in terms of rise in the GDP, in national income, in per
capita income hides the actual economic inequality that exists within the
country, the yawning gap between those at the top who are rolling in wealth,
and the vast majority at the bottom that is wallowing in poverty. To calculate
the per capita income among such unequal incomes and suggest a rise in general
prosperity is to mock at poverty and divert attention from it. Bourgeois governments, repeatedly
speak of development as their goal. But economic development
implies that along with growth there are positive changes in the
distribution of the fruits of that growth, as well as changes in the economic
structure itself. Development must mean growth with equity and
justice. It must mean satisfaction of the basic needs of the mass
of people as a matter of priority.
Economic growth is certainly necessary for
development. But economic growth per se does
not mean development which should bring general improvement in the living
conditions of the vast masses. The harsh reality is that
under neo-liberal capitalism high economic growth and social development are
moving divergently. In their relatively frank moments, when faced with
peoples’ discontent they talk of the need for ‘inclusive growth’. Capitalism can no longer find a solution to
the main contradiction that afflicts it, the sharpening contradiction between the social character of production
and the private nature of capitalist appropriation.
Way forward: We should equip ourselves with the
scientific ideology of Marxism-Leninism, which is a tool for understanding and
analyzing the complex reality of Indian society and its evolution through
decades of pre and post independence periods. It is the guide to action
for transforming this reality through the course of struggles for completing
the tasks of the democratic revolution and its transition to socialism. Repudiating
all dogmatic and doctrinaire thinking and revisionist trends, we should apply the
science of Marxism-Leninism, to the specific conditions of India for charting
the path to such a new socialist society. This path will be determined by
the specific historical conditions obtaining, as well as the particular
characteristics and features of our own country, its history, tradition,
culture, social composition and level of development.
****
(Paper presented in the Debate on “Indian Society and
Evolution in Mode of Production” held at Vijayawada, Andhra Pradesh on 29-30th
March, 2013 organized by Leftist Study Circle)
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