Sudipta....Justice, Peace, Equlity, Democracy and Humanity For All.....

Now Communist Party of India (Marxist)’s Friend is anti-communist Robert McNamara...

2007-08-01T06:25:00.000-07:00

The hidden agenda of CPI(M) is now reveling slowly, as now openly they are became agents of the Neo-Capitalist Global Corporate Empire. Forcefully acquiring fertile agricultural land form farmers for unjust & anti-constitutional SEZ and corporate interest. Even they are not hesitating to kill peoples (by the armed governmental force & by their own armed party force) to facilitate the carports. As they have dome it in Nandigram. They have crossed the humanistic limit also by applying the some policies to dominate people’s movements like they have done at Singur. They have raped & killed (Burnt) a little 16 year old minor girl to destroy the resistance against the land grab for Tata Motors car factory by fear of consequences. CBI have caught the criminals the main accused persons are Debu Malick, CPI(M) hired criminal and Suhrid Dutta, CPM's Singur zonal committee secretary.

So it is now clear that it was a planned murder to create an atmosphere of terror to smash the resistance. It is now clear to the peoples and communists of India that CIP(M) is no more a communist party. They are now the allies of neo-capitalists and corporate criminals and they have become a Commercial party of India (Money-est).

Now they have make it clear that they are no more wanted to be with the communist and Marxist ideology by the declaration through a Poster of Students Federation of India (students forum of CPI(M)). Which have two columns one is “with the Government for development” and another “Against the Government & Development”. There are many organizations and persons identified as anti-government & development like Jamayata Ulamaya Hind, Congress, Trinmul Congress, Medha patkar etc and the developmentalist government supporters are Amarta Sen, Mrinal Dutta Chowdhury, Sawer Latif (World Bank Legal department) and Mr. ROBERT MCNAMARA, former United States Secretary of Defense. McNamara served as U.S. Secretary of Defense from 1961 to 1968, during the Vietnam War. He resigned that position to become President of the World Bank (1968-1981) and he is a very popular anti-communist. Previously CPI(M) was demonstrated against his India visit and refused his kolkata visit for that huge protest demonstration his flight could not land at kolkata airport. At that time CPI(M) use to give slogans “MCNAMARA GO BANK” and now they will give slogan “MCNAMARA WELCOME”.Now he is a supporter of CPI(M) Government and developmental policy or CIP(M) is adopted his policies to create neo-capitalist empire. This is the CPI(M), so be aware, question your faith & (CPI(M)) is this communism? Are they communist? Are they with the peoples or neo-capitalist powers?

CPI(M)’s version of Justice: only CPI(M) have the right to get Justice in India....

2007-07-31T00:45:00.000-07:00

14th march’ 07 at Nandigram of west Bengal and 28th July’07 at Mudigonda, Khammam of Andra Predesh. Though these two incidents are totally different in the terms of incidental & political situation, geographical order and achieved justice till date but there are many similarities also like the both incident caused on the ground of movement on the land issue, In both the incident CPI(M) is present but in Nandigram they are the killer and in Khammam they have been killed, in the both incident unwanted & unjust police firing ( please note that in the case of Khammam CPI(M) is saying the police firing is unwanted and condemnable where the protesters directly attacked the police and few police officials are seriously injured but in Nandigram the protesters was doing a religious ritual and they have not injured a single police official but in here CPI(M) is not regretted but they are trying to justify the police firing, so it seems that only CPI(M) is entitled to get justice in India other peoples are born to be killed by the police…). CPI(M) leader Sitaram Yechury said the "YSR Reddy should resign” because of the incident but previously he said West Bengal’s C.M and Police Minister Mr. Buddhadeb Bhattacharyya should continue as C.M, after killing 14 peoples as C.M and as police minister only because of the bulleted peoples are not belongs to CPI(M) party. They are against the unjust land acquisition for corporate interest.

Some key features of two incidents:

Nandigram, West Bengal.

Officially admitted death toll as a result of policefiring in Nandigram 14.

In Nandigram the opposition alleges many more deaths. Massiveviolence against villagers following firing reported.

In case of Nandigram, opposition alleges that the CPIMcadres joined the police force in firing upon thevillagers and committing subsequent atrocities.

In Nandigram, it was a defensive crowd determined notto part with the lands in their possession forgenerations and reportedly carrying out religiousrituals when attacked by the police.

In case of Nandigram, the CM expressed regret onlyafter long wrangling. No compensation. Onlyadministrative enquiry. No penal action whateveragainst any police person.

Mudigonda, Khammam, Andra Predesh

Officially admitted death toll as a result of policefiring in Mudigonda is 8.

No such claim as yet in case of Mudigonda.

No such reports from Mudigonda.

In Mudigonda, it was an aggressive mob out to takepossession of lands, and reportedly pelting stones.

In case of Mudigonda firing, the government hasimmediately expressed regret. One top police officialis transferred, one suspended. Judicial enquiryordered. Compensation of Rs. 5 lakh for each deathannounced.

What is an SEZ??? SEZ Kaya Hai???

2007-07-30T00:11:00.001-07:00

What is an SEZ?

A Special Economic Zone (SEZ) is a specially demarcated area of land, owned and operated by a private company, which is deemed to be foreign territory for the purpose of trade, duties and tariffs. SEZs will enjoy exemptions from customs duties, income tax, sales tax, service tax. After the passing of the SEZ Act by Parliament in June 2005, the law came into effect in February 2006, though some states like Gujarat had passed provincial SEZ legislation in 2004.

Why SEZs?

The stated purpose of creating SEZs across India is "the promotion of exports". Commerce and Industries Minister Kamal Nath claims that exports will ultimately grow five times, GDP will increase by 2%, and 30 lakh jobs will be generated by SEZs across India. The government also claims that SEZs will attract global manufacturing through Foreign Direct Investment (FDI), enable the transfer of modern technology and create incentives for infrastructure.

How many SEZs will there be?

The central government has approves 237 SEZs in 19 states (occupying 86,107 hectares).

63 of these SEZs have already been notified.

23 SEZs are operational, 18 in the IT sector.

Ultimately there will be 500 SEZs.

Total amount of land to be acquired across India:150,000 hectares (the area of the national capital region). This land -– predominantly agricultural and typically multi-cropped -- is capable of producing close to 1 million tonnes of foodgrain. If SEZs are seen to be successful in the future and more cultivated land is acquired, they will endanger the country's food security.

What has the experience with SEZs been so far?

There are less than 400 SEZs around the world at the moment. In India, the government is planning that many in one country alone. ]

Number: China - 7
India - Ultimately 400-500

When started: China - 1980
India - Mostly after 1991

Democratic decision? China - A lot of discussion and debate preceded the setting up of

SEZs

India - No discussion. Parliament passed the law easily.

Size: China - Very large (Shenzhen: 32,700 hectares)

India - Small (3,000-14,000 hectares)

Ownership: China - State
India - Private Corporations

On what kind of land: China - Mostly coastal wasteland

India - Mostly fertile cultivated land

Exports: China - Very good (Shenzhen: Net exports in 2006, $ 35 Billion)

India - Poor so far (in 1998 a waiver of $1.67 billion on customs

duties was given to earn $ 1.04 billion in

foreign exchange)

Employment: China - ubstantial number of low-paid jobs

India - Very limited so far: 100,650 in all SEZs, till March 2005

Tax revenue collections: China -Only selective tax incentives provided

India - Across-the-board tax holiday given to companies

Overall economic success: China -Shenzhen very successful, but at least two SEZs have

failed

India - Largely unsuccessful so far

Ease of land acquisition: China - Land battles in some areas

India - Bloody, bitter resistance

Will there be displacement and loss of livelihoods?

Estimates show that close to 114,000 farming households (each household on an average comprising five members) and an additional 82,000 farm worker families that are dependent on these farms for their livelihoods will be displaced. In other words, at least 10 lakh (1,000,000) people who primarily depend on agriculture for their survival will face eviction. Experts calculate that the total loss of income to farming and farm worker families is at least Rs 212 crore a year. This does not include other income lost (for instance, of artisans) due to the demise of local rural economies.

The government promises "humane" displacement followed by relief and rehabilitation. However, historical records do not offer much hope on this count: an estimated 40 million people (of whom nearly 40% are adivasis and 25% dalits) have lost their land since 1950 on account of displacement due to large development projects. At least 75% of them still await rehabilitation.

Almost 80% of the agricultural population owns only about 17% of the total agricultural land, making them near landless farmers. Far more families and communities depend on a piece of land (for work, grazing) than those who simply own it. However, compensation is being discussed only for those who hold titles to land. No compensation has been planned for those who don't.

Will SEZs create jobs?

The growth of employment in the entire organised sector since the inception of the reforms in 1991 has been negligible. Total employment in the organised sector is still less than 3 crore. Even in IT and ITES, boom areas of the economy, employment is less than 0.15 crore (60% of SEZs are for IT). The Indian labour force is estimated to be 45-55 crore. Thanks to growing automation, modern manufacturing grows joblessly around the world (in India, automobile production has grown rapidly, while employing less labour than before). With more automation, organised services also require limited supplies of labour. SEZs will attract modern industry and services in order to succeed. To that extent they are unlikely to generate too many jobs. Moreover, the few jobs that will be generated will be for highly skilled labour, usually not available in the countryside -- from where working people are being displaced to make room for SEZs. Kamal Nath's claim that SEZs will create 30 lakh jobs within a few years is a fantasy: those many jobs have not been created in total since the inception of the reforms in 1991! The government does not provide information on jobs lost, only on jobs created.

Further, if the experience of existing SEZs in places like Noida (or Shenzhen, China) is anything to go by, the working conditions -- poor wages, non-existent benefits, long working hours, occupational hazards, discrimination, etc -- under which people will be employed will inevitably violate human rights, apart from keeping the benefits of growth away from the poor.

Are we moving towards new corporate city-states?

Many SEZs, like the Mahamumbai SEZ (to be built by Reliance Industries), will be like mid-sized cities, over 100 sq km in area (the size of Chandigarh). There will be no elected local government. A government-appointed development commissioner will govern the SEZ with the main aim of facilitating economic growth. SEZs have been declared "public utilities" under the Industrial Disputes Act, making collective bargaining and strikes illegal. Infrastructure like power, roads and water supply is guaranteed to investors and developers, not to the people of the region. Several lakh people may be living/working inside the SEZ. In some cases, the developer may have the right to tax the population in order to provide essential services. The constitutional tenability of private monopolies running local governments (for a sizeable cluster of the urban population) without being elected is questionable. All the non-economic laws of the land under the IPC and the CrPC would be applicable to SEZs. However, internal security will be the responsibility of the developer. Will SEZs turn ultimately into sovereign states -- treasure islands of prosperity in a sea of poverty and misery -- unaccountable to the vast majority of citizens in the neighbourhood?

Will there be loss of public revenue?

Thanks to exemptions from customs duties, income tax, sales tax, excise duties and service tax (even on luxury hotel facilities, shopping malls, health clubs and recreation centres) given to SEZs, the finance ministry estimates a loss of Rs 160,000 crore in revenue till 2010 (the ministry has also asked for capping the number of SEZs at 100. Finance Minister P Chidambaram wrote to Cabinet colleagues saying: "SEZs per se will distort land, capital and labour costs, which will encourage relocation or shifting of industries in clever ways that can't be stopped. This will be further aggravated by the proliferation of a large number of SEZs in and around metros."). The foregone tax revenue every year is five times the annual allocation for the National Rural Employment Guarantee Scheme and is enough to feed 55 million people each year who go to bed hungry every day.

Furthermore, given the concessions on import duties (not merely for the investors who will produce exportable items, but also for the developer who will not), there are likely to be foreign exchange losses (rather than gains). For the five-year period ending 1996-97 the foreign exchange outgo on imports made by units in SEZs and the customs duty forgone amounted to Rs 16, 461.58 crore against which exports of only Rs 13,563.87 crore were reported.

Moreover, these zones are exempt from sales tax, octroi, mandi tax etc on the supply of goods from the domestic tariff area (rest of India).

SEZs or REZs (Real Estate Zones)?

What are SEZs likely to become in a few years' time? According to a clause in the SEZ Act (Section 5(2)), as much as 75% of the area under large SEZs (above 1,000 hectares) can be used for non-industrial purposes.

This lacuna in the law is likely to become a loophole for the accumulation of land banks by private developers and property dealers for the purpose of real estate speculation (this explains why so many of them have been buying areas for SEZs). In fact, it may well be the case that the rationale for the above clause in the SEZ Act is the uncertainty surrounding the economic attractiveness (and ultimate viability) of SEZs. If adequate productive investment is not forthcoming, the SEZ developer can at least cash in on the land value. Conglomerates like Reliance already own upwards of 100,000 acres of land in the countryside.

Furthermore, the government has enabled Foreign Direct Investment (FDI) in real estate as of January 2007, leaving the door wide open for massive amounts of international speculative investment in property. Far from giving "land to the tiller," as the original idea of land reform had promised, the present tendency of the Indian government is to remove all ceilings on the ownership and use of land, thereby serving the interests of big business. It is noteworthy that there is no legal upper limit on the size of land area under an SEZ.

Are there legal violations involved?

The following are the main legal violations arising out of the SEZ Act, 2005:

Violates the letter and spirit of the Indian Constitution.

Infringes on the fundamental rights of citizens guaranteed in Part III of the Constitution.

Relaxation/inapplicability of a number of labour laws (including those under the Industrial Disputes Act, Contract Labour Act, Factories Act, Minimum Wages Act, Trade Union Act).

Environment (Protection) Act is inapplicable to SEZs. No environmental clearance needed.

Violates Panchayati Raj Act (1996) for local self-government.

Violates laws granting rights and control to adivasi communities over their land.

Violates many international conventions on human rights.

Are there resistance movements in defence of rural lives and livelihoods?

The political landscape of India in the last 20 years presents 'a million mutinies'. In every region and state, small and large people's movements have emerged to fight the appropriation of natural resources, livelihood and survival by government and large national and international corporations. Brief snapshots of these rebellions follow:

In the south

Struggle against Coca-Cola in Plachimada, Kerala. Coca-Cola is held accountable for water shortages and pollution in the area. The community forced the Coca-Cola bottling plant to shut down in March 2004. Spearheaded by the Coca-Cola Virudha Samara Samiti.

Muthanga forest land struggle, Wayanad, Kerala, led by the Adivasi Gothra Sabha(AGS) and its leader C K Janu for tribal land rights.

Farmers protest against land acquisition for the Bangalore-Mysore highway in Karnataka.

People's struggle against mining of the Krishna river by the Reliance Group.

In central and western India

Dalit struggle for gairan (grazing) land in the Marathwada region of Maharashtra, under the Jameen Adhikar Andolan.

Struggle against Reliance gas lines in Sindhudurg district, Maharashtra.

Farmers protest against SEZ in Raigad, against land acquisition by Reliance in Greater Mumbai.

Farmers (26 gaon bachao sangharsh samitis) protest against SEZ in Raigad, against land acquisition by Indiabulls.

Fishermen's struggle against the proposed gigantic port at Umbergaon.

Anti-Coca-Cola agitation in Kaladera, Rajasthan, by the Jan Sangharsh Samiti.

For over 20 years, the Narmada Bachao Andolan(NBA)has opposed big dams and displacement of people and has brought the issue of rehabilitation, justice and the ills of mega projects into the mainstream.

Against privatisation of the Sheonath river in Chhattisgarh, the National Alliance of People's Movements, the All-India Youth Federation, the Nadi Ghati Sangharsha Samiti and the Chhattisgarh Mukti Morcha have been uniting people living along the river to oppose the move. Around 23.6 km of the Sheonath river had been sold to the Radius Water Company.

In the east

Protests in Kashipur, Gopalpur, Kalinganagar (Orissa) against displacement.

Protests in Singur and Nandigram (West Bengal) against SEZs
agricultural land acquisition for private industrial use and forceful displacement for corporate interest.

Adivasi struggle in Jadugoda against uranium mining and displacement.

People's movement against the construction of the Koel-Karo Hydro Power Project (80 km from Ranchi) under the Koel-Karo Jan Sanghathana that has stalled implementation of the project for over three decades.

In the northeast

Struggle against the Pahladia dam in Assam and privatisation of water resources.

People's movement in Doyang and Tongani, Assam, against forced evictions from forests.

Struggle against the Tipiamukh Multipurpose Hydel Project in Manipur.

In the north

Anti-Coca–Cola struggle in Mehdiganj, near Varanasi, in Uttar Pradesh.

Struggle against privatisation of water, Delhi.

Farmers protest against Reliance SEZ in Jhajjar, Haryana.

Farmers' struggle against land acquisition for Trident SEZ in Barnala, Punjab.

Cops let Gujarat burn in 2002: NGO has 'proof'

2007-07-23T03:40:00.000-07:00

Ahmedabad: An NGO in Gujarat claims it has evidence that the police deliberately avoided riot-hit areas during the communal violence of 2002.

The Jansangharsh Manch, which works for riot victims, on Saturday gave the Nanavati Shah commission its analysis of phone conversations between senior police officials and politicians during the riots. The NGO's analysis is based transcripts stored in CDs, which were given to the commission by DIG Rahul four years ago.

The NGO claims that its analysis indicates top police officials responsible for controlling skipped places where massive riots were taking place. "Our analysis makes two things clear: the excuse that the police were outnumbered by mobs is bogus and the police commissioner's orders were not obeyed by his immediate subordinates. The analysis also shows that some riot accused were in touch with the police," alleged the NGO's lawyer Mukul Sinha.

The NGO claims police officials moved away from Gulbarga Society and Naroda Patiya, some of the worst affected areas in Ahmedabad, before the mobs attacked. The government has asked for more time to respond to these charges.

"We have sought a copy of the CDs so that we will know whether these charges are completely true or not and then we will file a reply within 15 days," said government lawyer A M Pandya.

http://www.ibnlive.com/news/cops-let-gujarat-burn-in-2002-ngo-has-proof/45399-3.html

Panchayat’s Can Deny Permission For Field Trials Of GM crops By Kavitha Kuruganti

2007-06-24T13:19:00.000-07:00

Genetically Modified (GM) or Genetically Engineered (GE) crops are trying to make their way into India across more than thirteen important crops. One such genetically modified crop – Bt Cotton – has already been allowed into the country.

The issue of GE crops is highly controversial and there is much evidence present about the adverse effects of GE crops on farming and other eco-systems, in addition to potential impacts on human health too, from across the world. The hasty thrusting of GM crops on Indian farmers, especially in the context of safer and affordable alternatives being practiced by thousands of farmers, raises questions about the need for such crops in the first instance.

Genetic Engineering is a process by which foreign genes from other living organisms are randomly inserted into the genome of a host organism (any plant or animal that the promoter wants to modify for some reason or the other, with profiteering through larger and larger markets being the common reason) with unpredictable and potentially hazardous results. Very often, only the expected benefits are hyped up and the potential problems glossed over without any sound assessment. This could lead to disastrous consequences for all life on this planet.

It is in this context that many groups are pressing for a sound and rational policy related to GM crops in the country, to get the government to assess the very need for GM crops in a country like India, with its own agro-ecological and socio-cultural conditions related to farming.

Last year, field trials of GM crops have been permitted in hundreds of locations in the country including on GM food crops of rice, brinjal, bhindi, tomato, maize, sorghum, castor, groundnut, cabbage, cauliflower, potato and mustard. In various investigations, it was revealed that when the companies developing the crop lease in land from farmers to conduct their field trials, they do not inform the farmer that they are going to try out a genetically modified crop in his/her field. The neighbors are not told and the panchayat is very often not informed. In most cases, even the state government is not told by the crop developers that they are testing out a potentially unsafe product in open air conditions in the state as field trials of the crop.

Understanding the negative potential of such serious lack of monitoring systems and the reality of crop developers misusing the conditions being imposed on them for conducting field trials, the Genetic Engineering Approval Committee (GEAC) - which is the apex regulatory body for looking into GM crop research and development in the country – brought in a new condition (in its meeting on 13/12/2006) for any GM crop field trials to be conducted in India from this year onwards. As per this, Panchayats have to give prior permission for such a trial to take place in their jurisdiction before the GEAC considers any application. This is also in conformity with the constitutional rights bestowed on Panchayats with regard to their natural resources.

Panchayats have to make good use of this authority that they enjoy now.

When any crop developer walks upto any panchayat for permission for a GM crop field trial, the Gram Sabha should be convened and a comprehensive debate organized about the potential risks of allowing the trial. People who have information on the subject could be called to the meeting, if needed. The decision to allow or disallow should be an informed decision taken in consultation with the gram panchayat.

The Panchayat should also ask the regulators (Chairperson, Genetic Engineering Approval Committee, Ministry of Environment & Forests, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi 110 003) for a full list of potential risks to watch out for, for all the conditions imposed on the company while conducting the trial so that compliance can be monitored and so on. The Panchayat should also get full information on liability mechanisms in case there are violations observed in the trial. Further, such liability mechanisms should also ensure that the trial farmer and his/her neighbors' interests are fully protected.The Supreme Court orders in a Public Interest Litigation related to GE crops also insist on a designated scientist to be present for each such trial taking place who will be responsible for the trial, that there should be a minimum isolation distance of at least 200 meters from the field trials to the neighboring fields of same crop and that there should be a testing protocol for contamination from an approved institution to detect and ensure that there is no contamination from the field trial.

If there are any trials of any new seed varieties happening in your village, inform the Panchayat immediately. If the Panchayat has not given permission to such a trial, it could summon the person/company conducting the trial and ask for full details of what is being tried out, in writing. If there is a GM crop being tried out, the GEAC should be immediately alerted about the fact that the trial is happening without the permission of the Panchayat.At a time when a majority of countries in the world have not allowed GE crop cultivation for a variety of reasons and concerns, Panchayats in India have to be vigilant towards such trials and have to utilise their authority in this matter in an informed and democratic manner after carefully understanding all the implications.

SEZs For The Rich, Poor To Bear The Brunt By Arun Kumar

2007-06-24T11:04:00.000-07:00

Special Economic Zone (SEZ) policy has taken one more turn with the announcement from the Empowered Group of Ministers (eGOM). The freeze on them is being lifted but several parameters will be changed to accommodate the farmers, tribals and the civil society groups who have been agitating against the SEZs.

From the earlier no limit on the maximum size of the multi-product SEZs now the limit has been set at 5,000 hectares. The state governments are prohibited from acquiring land for the private players and they cannot form a joint venture with a private player unless the latter has the land to offer the project. States can acquire land for their own SEZ provided they take care of the relief and rehabilitation as per the new policy to be announced soon.

Now the SEZs will be required to at least use 50 percent of the land for processing unit as compared to the earlier 35 percent so that the real estate component would be lower. Finally, the export requirement has been made more stringent compared to earlier.

Clearly, the eGOM has steered a middle path between the proponents of the SEZs, the corporate sector and their political supporters and the opponents who wanted SEZs to be scrapped because of their adverse impact on the poor people in the rural areas. This was on the cards since the prime minister had stated that SEZs are an accomplished fact. He implied that there is no going back on the policy and the government would only do some tinkering to accommodate the opponents. Where does this leave the policy and the poor?

Political aspects

SEZs have occupied centrestage in the national consciousness for the last eight months due to the events unfolding in Singur (akin to an SEZ though not one) and subsequently due to the occurrences in Nandigram (a proposed SEZ).

News of dissent in the ruling party over the proposed SEZs in Haryana and Punjab has been making the rounds. In West Bengal, the government is determined to continue with its policy of setting up SEZs and continuing with Singur on the grounds of industrialisation of the state. At the centre also it is seen as a strategy for ensuring the continuation of a nine percent growth rate of the economy. If China can succeed through such a policy, it is argued, why not India?

SEZs are threatening to sprout all over the country from the most backward states like, Orissa and Chhattisgarh to the most advanced ones like, Maharashtra and Gujarat. They would number not in tens but in hundreds and would cover huge tracts of land across the country. Some of them would be so large as to create entirely new townships and since they promise world class infrastructure, they would be unlike the existing cities.

They promise to create islands of affluence where foreigners and NRIs can come and live in comfort segregated from the poverty and squalor ridden cities. According to an earlier draft of the SEZ Act, they would have been `deemed to be foreign territory for the purposes of trade operations, duties and tariffs’. Even though this phrase is no more used in the Act of 2005, it is feared that they would be functioning as such, given their enclave character.

Currently, seven previously created Export Promotion Zones (EPZs) stand converted to SEZs, 63 SEZs are approved and notified, 171 are approved but not notified, 162 are approved in principle only and 322 applications are pending. Most of them are by Indian businessmen.

Resistance to these zones has built up rapidly in the country even though most political parties seem to be supporting their creation since they are ruling in some state where they would like them to come up. In different parts of the country, farmers and tribals who are sought to be displaced by the creation of these zones are opposing them.

In Singur (not an SEZ), Nandigram and earlier in Kalinganagar in Orissa there has been fierce resistance. The opposition parties in the different states have taken advantage of these movements to put the ruling governments in the dock. However, only some parties like the Trinamool Congress are going the whole way while others are ambiguous at best.

Displacement is a larger issue. Movements around displacement caused by earlier large projects (Narmada Bachao Andolan is an example of that) already existed and the civil society leaders (like Medha Patkar) of these movements are providing leadership to the anti-SEZ upsurge.

New large-scale displacement is being created by the mega projects coming up all over the country. This includes the setting up of steel mills, power plants, airports or the expansion of existing airports, the expansion of the highway network, etc. Millions of families are likely to be displaced in a short period of time.

Why is the rapid creation of these enclaves so important for the government, in spite of the build up of the movements? Politically, perhaps the government believes that the movements will die down since different political parties are in power in different states and they will prevent the opposition to the idea of SEZs from building up. The CPI (M) is a case in point. It is encouraging Singur and SEZs in West Bengal so its opposition elsewhere would be held in check and be tokenistic. Further, it is expected to hold other Left parties in check.

Economic aspects

Finally, the Central government perhaps believes that the economic gains will dilute the opposition over time. It expects these SEZs to be the nucleus of new investment, jobs and greater exports. Thus, it is propagating the SEZs as the solution to the country’s problems. The critics worry about food security being jeopardised and in response, it is argued that less than 0.1 per cent of the arable land will be involved in the proposed SEZs so this will hardly effect total food production. Another argument is that SEZs will accelerate development and create a large number of jobs. The critics argue that it will also destroy lots of low skill jobs in agriculture and forestry. Further, the adverse impact on small scales sector will reduce jobs. So in the net it is not clear that it will lead to more employment.

It is suggested that there are backward and forward linkages of industry so it will promote development. But does agriculture not have such linkages? There is a fear that the large number of tax concessions being granted will lead to loss of revenue. However, the proponents suggest that increased production will result in enhanced tax collections. Will SEZs spur smuggling and tax evasion that will cause the tax loss to be larger than what is being anticipated? The number of questions that are being raised is quite large so that it is critical to understand where the truth lies? Some of these issues are dealt with in this paper.

Who gains, who loses?

Clearly, those who will benefit or lose from the SEZs will be different sets of people. Those who will be displaced by the SEZs will be the rural people and those who will come in their place will be the skilled urban people. It is true that those who lose land will get “market prices” (according to the government) for their land and theoretically will be able to invest their money in other businesses. Thus, theoretically, not only in the SEZs but the new investments by the former agriculturists would create new non-agricultural jobs and all this maybe expected to lead to a reduction in the rate of increase of unemployment which has accelerated in the last 6 years. It is said that agriculture cannot create jobs anymore and these jobs have to be created in non-agricultural sectors.

The SEZs are likely to curtail the rights of labour given that there will be no labour commissioner and the developer of the SEZ will govern the place along with a development commissioner. There will be no democratically elected body. Under Section 49 of the Act, there will be substantial powers to formulate new laws:

“49. (1) The Central Government may, by notification, direct that any of the provisions of this Act (other than sections 54 and 56) or any other Central Act or any rules or regulations made thereunder or any notification or order issued or direction given thereunder (other than the provisions relating to making of the rules or regulations) specified in the notification—

- Shall not apply to a Special Economic Zone or a class of Special Economic Zones or all Special Economic Zones; or

- Shall apply to a Special Economic Zone or a class of Special Economic Zones or all Special Economic Zones only with such exceptions, modifications and adaptation, as may be specified in the notification.

Provided that nothing contained in this section shall apply to any modifications of any Central Act or any rules or regulations made thereunder or any notification or order issued or direction given or scheme made thereunder so far as such modification, rule, regulation, notification, order or direction or scheme relates to the matters relating to trade unions, industrial and labour disputes, welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits applicable in any Special Economic Zones.”

The jobs the SEZs are likely to create will be of the high skill variety that the displaced farmers (with different skills or with low skills) would not be able to perform... they would not encourage the entry of low-skilled displaced workers

It is likely that environmental considerations will be diluted. Many tax concessions have been announced. Given these considerations, profitability is being ensured so investment will flow into the SEZs to take advantage of these features. It is also possible that there maybe relocation of units from their present locations to the SEZs so that the net investment would be lower.

It is true that new industry and businesses set up in the SEZs will generate new jobs. However, at first people would be displaced, work on the creation of the new infrastructure would then begin and new industry would take even longer time to come up so new jobs will not immediately come. Further, the new infrastructure and industry is much more capital intensive than agriculture or non-farm rural activities it would displace so that fewer jobs would be created.

Further, the farmers receiving compensation for land would not really know of any activity other than agriculture so they are unlikely to be able to invest in new businesses and may simply waste most of the capital they get. Even the most sophisticated businessmen, especially in the new environment, usually specialise in a few businesses and do not venture into businesses they do not know about.

In this age of specialisation many businesses talk of core competencies and shed their other businesses or outsource them. How do we expect the ill-trained farmers to seamlessly transit to other businesses? This is unlikely. Further, every business requires some minimum capital to start but a large number of Indian farmers are small or middle farmers who would get marginal amounts of compensation that would be totally inadequate to start any kind of business even if they were competent to do so.

Finally, consider the impact on small businesses which are failing in large numbers due to the new economic policies. The SEZs will accelerate this process since reservations will get further diluted. This will result in loss of a large number of jobs.

Many of the displaced are not likely to receive much compensation. This would include the landless who will not receive any compensation and those performing non-farm activities like the potters, herdsmen, carpenters, etc. These people, traditionally integrated into the farm economy, would be completely at sea without much of capital. Such people would constitute about half the population of the villages and can only add to the ranks of the unemployed.

The jobs the SEZs are likely to create will be of the high skill variety that the displaced farmers (with different skills or with low skills) would not be able to perform. Further, given their enclave-like character they would not encourage the entry of low-skilled workers displaced from the rural economy flooding their territory. Such people would of necessity become encroachers and slum dwellers in some urban areas. Thus the existing urban areas would face problems while the new enclaves would flourish creating differential urbanisation and more problems.

The displaced would require training to get even the low skilled jobs in the SEZs. The poor who have not even attended schools or drop out by the fifth grade are unlikely to be able to afford the training required and would be ruled out of working in these enclaves. Even if the training is sought to be given, it will be for low skills (like guards) or will take considerable time by which time others would get the jobs and the displaced people would languish.

In brief, the rising unemployment and underemployment (doubled in the last 6 years according to the Economic Survey 2006) can only go up. Instead of farmers committing suicide, it will be the former farmers (and the landless) who would commit suicide.

Are farmers' suicides important? According to a secretary in the Government of India too much is being made of this phenomenon. According to the crime statistics of India, quoted by her, only 16 percent of the suicides are committed by farmers. There are several lacunae in this argument. One is not talking of the absolute numbers but of the increase in the suicides. Farmers are supposed to be hardy people and do not easily commit suicides.

According to available information, the number of suicides is increasing and specially in some of the better-off states and amongst the better-off farmers. It is not the landless who are the poorest in the rural areas who are committing suicides.

The rising unemployment and underemployment can only go up. Instead of farmers committing suicide, it will be the former farmers who would commit suicide

What one is talking of is the growing distress amongst farmers who are unable to face the emerging challenge of globalisation – an uncertain and unknown entity to them. Further, do we know how many suicides are being committed? Are our crime statistics complete? According to the Crime Statistics, Bihar has the least amount of crime and Kerala the highest (A Kumar, 2002: The Black Economy in India. Penguin (India)).

Clearly, in India, a lot of crime goes unreported and unrecorded and that is also the story of suicides, in spite of all the publicity that this phenomenon is now receiving. If we go by the amount of narcotics drugs confiscated each year, then little of it is used in India. What is caught cannot be used and what is not caught does not exist as far as statistics are concerned so very little would be consumed in the country which is patently false. Clearly we cannot go by this argument since what is caught is only a small amount of the total drugs in use in the country.

According to estimates of gold brought into India and what was caught as smuggling, the ratio was 33:1. Thus official data on crime is not reliable and suicides, etc., maybe more in number than what is officially reported.

Displacement in the past

Displacement in India is not new. Since Independence, the nation has pursued the policy of development from above and set up large industries or industrial estates and projects like, mines, dams, ports, expansion of road and rail network. Each one of them has displaced people in large numbers. We have also had the experience of setting up export zones and electronic zones. In most of these cases, the displaced people have hardly found new employment in these projects while the educated elite (the five percent of the work force in the organised sectors) has benefited substantially.

The experience of HEC, Ranchi or BHEL, Haridwar or the steel plants like, Bokaro and Bhilai has been that the neighbouring areas have remained largely backward. These industries were set up in backward areas and they remain some of the most backward. These have turned out to be mere implants in backward areas with little impact on the surrounding areas. While the country may have had a strategic interest in setting up these industries to achieve relative autonomy, in the absence of basic education for the children of the poor, the jobs went elsewhere. Mostly the local people did not get jobs except menial ones in the townships.

The people of these areas specifically, and the non-elite in general, trusted the post-Independence leadership that there would be trickle down and they would soon benefit. So, either they willingly sacrificed for what they were told was the larger national interest or in the absence of organisation had no choice but to comply with what those in authority wanted. Now they know better that trickle down does not work and do not believe the elite ruling class. A white paper is needed on the impact of the earlier large projects on the people displaced from where these projects came up.

In brief, those likely to be displaced by SEZs are unlikely to find jobs in the SEZs and since they do not have the skills, they would not be able to shift to non-agricultural jobs.

Market price, justice

It is not that those displaced did not receive any compensation. However, since most of them did not know the modern institutions and practices, they did not know what to do with the compensation received. Often money was blown up in drinks and conspicuous consumption. This jeopardised the future of the family. The Government should issue a white paper on what happened to development in these cases in the areas where some of the large projects came up. In some sense, the compensation received by the displaced people was not just.This raises the larger question of whether there is justice to the displaced? In the market, if one receives a payment voluntarily for what one offers, it is a just trade. However, if one is coerced into accepting a price then this is unjust. However, this applies only to a situation where both parties understand markets. If one party does not understand the institution of market and a capitalist economy, then even payment of a market price taken voluntarily by the seller may not be just.
In a capitalist economy, the agents understand the idea that if they liquidate their primary asset, they need to invest the proceeds so as to continue to derive an income for the rest of their lifetime. Most of the poor people have little idea of what it means to invest and what is the risk of investment or how to regulate their investment so as to get a secure future return. Thus, their ownership of an asset is far more important than the financial market compensation they may get for it.

Further capitalism assumes the existence of homogeneous labour which can migrate anywhere to get work. Family ties are not that critical. That is not true for the agriculturists. For them, it is an inter-dependent life and kinship is crucial. Thus, displacement is very painful since it breaks the family and neighbourhood bonds that are not easy to re-establish in a new setting. The bonds may be between the labourer and the farmer or the farmer and the carpenter or the ironsmith, etc. Especially, if the displaced migrate to an urban or semi urban setting, life is very alienating for them. These relationships cannot be valued in the market. Thus, paying market price cannot be just compensation for the displaced because they lose much more than the land.Finally, when the land passes on to the businessman and they establish a market in land then a piece of land bought cheaply form the agriculturist shoots up in price. Thus, typically, the agriculturist receives a fraction of the price that the businessman will finally receive. One may ask where is the justice in all this.

Further, often there is a land mafia that operates in most areas where land is likely to be acquired. This mafia often gets to know where land is likely to be acquired and buys up land at prices higher than the current price knowing that the price would soon jump to much higher levels. The mafia also coerces sales by various devices. This is how the real estate developers have become billionaires. The loser in this process of capitalist development is the illiterate and poor rural population.

Location close to metros

Among the many concessions being offered to the developers of the SEZs, one is cheap land close to cities and new highways. Land is being allotted much in excess of the requirement of industries. The implication is clear that land is being seen as urban real estate where huge profits can be made. While Singur is not an SEZ, the Tata group is being given about a 1,000 acre of land when they only need perhaps 70 acre for the car factory. Since the land in Singur is at the intersection of two important highways, it is prime land. This kind of consideration is clearly important for many of the planned SEZs.

While the developers of many of the SEZs and the proponents of these schemes suggest that real estate is not the real consideration and development is the real concern, can these claims be relied on? One line of argument is that since agricultural development has already taken place now it is time to go in for industrialisation since agriculture cannot accommodate more people.
What is the guarantee that land acquired by industries for the SEZs would only be used for specified purposes and not for speculative purposes as real estate. The example of DLF and others in Gurgaon come to mind

There is another reason for the rush to set up these huge estates. In the last three years, the corporate sector profits have been growing at an average of 30% so that they have a lot of cash to invest. Real estate is a good proposition to park their funds in. Thus, we are witnessing the creation of a large number of new landlords.

Finally, developers hope that there will be a shift of industries to these new sites. There is a precedence to this in the fifties and sixties when industry shifted from East India to West because of rising labour militancy. Many industries shifted from West Bengal to Maharashtra. Very quickly, the number one industrialised state West Bengal became a relatively backward one and Maharashtra became the most industrialised state.

The government and industry are making a large number of promises regarding the SEZs. They are promising more investments in industry and massive creation of jobs. However, as has often happened in the past, industry and businesses have not kept their promises. For instance, Pepsi Cola was allowed to come into the country in the `bad old days’, prior to 1991, on the condition that it would export, it would develop Indian agriculture and create large numbers of jobs. None of these things materialised and most of the conditions were later dropped in the nineties since by then Coca Cola was allowed in without any of these conditions.

In Delhi, hospitals were allotted cheap land (almost free) on the condition that they would cater to the needs of the poor by providing a certain number of free beds, etc. However, not only have they not fulfilled that promise but they have been doing everything in their power (using political influence, etc.) to have the rules changed. Many industries have been set up in the backward areas and as argued earlier, in most cases, these industries generated few jobs and of these even fewer went to the local people while most of these jobs were cornered by the educated middle class people.

Given this past experience, what is the guarantee that land acquired by industries for the SEZs would only be used for specified purposes and not for speculative purposes as real estate. The example of DLF and others in Gurgaon and other places comes to mind. They acquired advance information as to which areas are likely to be urbanised around the new NH8 and acquired that land from farmers at literally throwaway prices (market prices for that time). They have then released the land slowly over the last 20 years keeping prices artificially high all along and benefiting enormously. Land prices in this period have risen almost 500 times. Far higher than any other index of prices.

When industry goes back on its promises as it inevitably does, would the land revert back to the farmers and what would be the mechanism for this (to whom and at what price?). In a recent judgment the SC has said that the land need not be returned to those from whom the government acquires it. Thus, it is a one-way street and a mistake is costly to the displaced. Many farmers would be displaced and as mentioned above, their social linkages would have been broken. One cannot reestablish the village again after breaking it up. This is not a reversible process. Further, who is going to pay the cost of the transition in which a community is broken up and which involves the suffering of the women and the children displaced from hearth, schools, etc.

Mockery of democracy

In setting up SEZs an essentially undemocratic process is being followed. While industry and commerce have been consulted regarding what they need, the farmers and civil society groups have been left out of any consultation process. It is assumed that they will accept meekly the decision to take away land from agriculture for the setting up of commerce and industry. It is assumed that their notion of their own welfare is not important.It is not that the entire country is being turned into SEZs. Certain areas are being selected so that the burden of this kind of industrialisation is going to fall on some people and not all. The question naturally arises whether in a democracy those to be adversely affected need to be consulted or not?

The government has adopted the policy of `growth at any cost’ with the cost falling on the deprived and marginalised sections of the population. The benefits are being taken by the big businessmen

Should it not be the case that if the collective decides against such a project then the government should look for alternative sites where the people agree to the project? If no such site is found, then it means that the majority do not want that kind of development and then in a democracy that decision should be implemented and such a project not be allowed to be set up. If people do not want a certain kind of development, then that decision should be respected. The government should not assume that it knows best and it can force its will.

Finally, for the sake of accountability, land if needed, should be acquired in phases as the project is set up. Thus, it is necessary that the party interested in setting up a SEZ should give a time bound plan and if that is not adhered to then not only should more land not be acquired but what was acquired should be returned. A fine should be imposed on the party involved and distributed to those whose land had been acquired. This would make the system more accountable which today it is not.

For example, if in Singur, the Tatas are now planning to set up a plant to produce one lakh cars then it may be allotted say 50 acres of land with the promise that more would come later as the project progresses to the next phase. After all, if Maruti producing many times more car can function in a plot of similar size then why cannot the Tatas? It is also possible that land to the Tatas be given from out of the closed industries that abound in West Bengal. This would not add to the displacement. It would be a much better solution than giving fresh land and causing displacement and hardship to a large number of people.

Macro aspects

Today, the government has adopted the policy of `growth at any cost’ with the cost falling on the deprived and marginalised sections of the population. The benefits are being taken by the better-off sections of the society and the big businessmen. It is argued that the SEZ policy would lead to a rise in the investment rate in the economy to achieve a 10 percent rate of growth. It is suggested that there would be trickle down and that would lead to the poor also benefiting.

The question is, is this the only way to increase investments and the rate of growth in the economy? One could also ask whether, growth cannot take place through a pro-poor policy? Finally, one needs to be sure whether there will be trickle down to the poor or would there be two separate circles of development a high growth one with the elite benefiting and a low growth path in which the bulk of the population would be trapped. How often it has been found in the Indian context that trickle down has not really worked or has been far too slow and yet the people are expected to put their faith in these policies once again.

In the last five years, the investment rate has jumped from around 25 percent to around 32 percent without the concessions being announced under the SEZ scheme. Then what is the need for further incentives at the expense of the marginalised sections of the population? The issue is what are the prerequisites to investment increase? And, what is the role of concessions in the investment process?

The concessions in taxes and relaxation in environmental regulation and labour laws are expected to make operations in the SEZ highly profitable. All this is being done in the name of exports, to make these zones export competitive by helping industry in these zones to have lower costs of production and higher profits. There is no doubt that with the concessions announced and the privileged position that is being granted to the SEZs, they will get investment so that they will generate employment and output. However, it is equally true that they will also displace production that was already ongoing in the area where SEZs will come up. The past investments in agriculture, non-agricultural activities and in the creation of habitation in that area will be destroyed. Thus, the issue is what would be the net increase in investment, employment and output.

Further, given the concessions, much of the investment in SEZs is likely to be at the expense of the investment in the rest of the economy. Finally, some may even close their units in the rest of the economy to shift to the SEZs. Due to these three factors, the net investment will turn out to be much less than what would be the gross flow of investment to the SEZs. In fact, because the price of output from SEZ is likely to be lower than that in the rest of the country, a lot of smuggling will take place and the output in the rest of the economy will be adversely affected. This will further affect employment.

Since industry set up in SEZs is likely to be of the modern variety, it will use much more capital per worker and generate much higher output per worker. Thus, the SEZs are likely to generate little employment compared to what it will displace both inside the SEZ and outside it (and that too of the skilled variety). This will undermine any trickle down that is being talked of.

SEZs are likely to involve concessions in income tax, corporation tax, excise, customs and sales taxes so that there will be substantial revenue loss compared to the potential tax collection. Further, to the extent, industry will shift from the non-SEZ areas where they are required to pay taxes to the SEZs where taxes would not be required to be paid, there would be a decline in tax collections.

Further, due to smuggling of cheap goods from SEZs to the rest of the country, there will be further loss of tax collection. When smuggling takes place easily from outside the guarded borders, it is not difficult to imagine that this would be easy from the unguarded SEZs. The resultant revenue losses will aggravate the deficit in the budgets and will result in cut back in expenditures to fulfill the FRBM Act requirements. Most of the time these cuts tend to be in the social sectors which will worsen the situation for the poor.

Finally, as has happened so often in the past, there will be over investment in the SEZs. As suggested earlier, this would be at the expense of the non-SEZ areas of the country. This would result in imbalanced development and a rise in uncertainty for the economy with consequential impact on the poor who by then would be out of jobs.

In brief, the macroeconomic situation will face major challenges. Employment in the SEZs would rise but would be adversely affected elsewhere. Output net of the loss of production in the activities that were carried on prior to the setting up of the SEZs, in the small scale sector and in the displaced industries would rise much less than claimed. Similarly, investment would rise but much less than being suggested because of the destruction of assets in SEZs and the small scale sectors and displacement from the rest to the SEZs. Loss of tax revenue would be substantial and would affect the budgetary calculus. All in all, the macroeconomic portents are not very promising.

Enclave development

It is also clear from the earlier section, the SEZ areas will develop substantially at the expense of the non-SEZ areas. This is likely to accentuate the already rising disparities. Loss of taxes will lead to shortage of funds for development in the non-SEZ areas.

There is likely to be diversion of resources from the non-SEZ areas to the SEZs. For instance, water aquifers would be used rapidly as has happened in the past and the poor people in the surrounding areas will be starved of water. The only way to prevent differentiation from rising further is to declare the whole country an SEZ. One may ask why limit the supposed benefits of SEZs to only limited areas and aggravate disparities?

Conclusions

This paper has analysed some of the key features relevant to the creation of SEZs. It is argued in the article that the SEZ policy is a part of the policy of `growth at any cost’ with the cost falling on the already marginalised sections in the rural areas. Huge concessions are being offered to the developers of SEZs and the entrepreneurs for locating in the SEZs. The beneficiaries are likely to be the affluent and skilled sections of the population. Thus, those who gain and those that lose will be different sections of the people.

It has been argued that those displaced will not get the market price for their land and even if they do, this price would not take into account many of the hidden costs, like, being a part of a community. As such, payment of a market price for land will not be a `just’ compensation, specially to those who do not understand the institutions of saving and investment.

Displacement will not be just of agriculturists but of a far larger number of people associated with a way of life which will be totally disrupted. Market price does not factor this in since it is at best based on the future flow of incomes (with capitalist development) from the piece of land acquired. It is not valued from the point of view of the displaced to whom the way of life being destroyed may be worth much more, specially, in the long run. Unfortunately, some Marxists seem to be going for a new form of class struggle where the workers and capitalists will together fight the marginalised, the farmers and tribals who instead of getting their support are being treated as anti- industrialisation.

The eGOM has not been able to resolve the problem of acquisition of land. If the government does so, it would pay much less than the potential market price but if this is left to the private sector, land mafia would be involved and the price paid would be much lower than the market price. There is really no solution. Further, it is argued that many in the rural areas do not possess land and will get little compensation when they are displaced. They will join the ranks of the unemployed in the urban areas. Those who do get compensation will find that they would not be able to start businesses since they lack the experience for it (this is the age of core competency). Finally, at a time when the crisis in the small scale sector would only worsen, asking the inexperienced farmers to start small industry or business would be doing them a disservice.

It is argued in this paper that employment generation in SEZs will not be able to compensate for the loss of employment in the activities the SEZs will displace and in the small scale sectors which are likely to be hit hard. Further, the output increase will be much less than claimed and investment will be at the expense of the non-SEZ areas and less than claimed since there will also be destruction of capital. Finally, it is pointed out that the more successful the SEZs the more would be the loss of revenue to the government due to the tax concessions. There is likely to be large scale smuggling and new possibilities of transfer pricing and siphoning out of profits.

There would be enclave development and disparities would rise. Migration to urban areas will rise and they will face further collapse. The excess land being allotted to the SEZs will result in the creation of new landlords. Government is creating new landlords 60 years after independence and long after it was thought prudent to end landlordism in the country. Reports suggest that some large SEZs being set up by the corporates will be known as “…desh”, like, Bangladesh, where the well off will live in style.

If the overall gains from SEZs are so unclear and the government is going ahead with the scheme, then it can only be because it wants to give concessions to certain sections (who are pushing for it). The central government is playing the same role as the World Bank and IMF do in making nation states to compete for capital and give concessions to it. The SEZ policy is making the states compete with each other to get capital. Those states that do not go for SEZs will suffer because others will go ahead and attract investment.

Given the negative features of SEZs, even allowing 5,000 hectares is too much land for one SEZ. Having hundreds of them sprouting in the country is even worse. In brief, if SEZs are the logical culmination of the current Indian strategy of `growth-at-any-cost’ with the cost falling on Bharat then one needs to not only scrap SEZ policy but the development strategy itself.

The writer is professor of economics, JNU, New Delhi

Mukesh Ambani To Build $1 Billion “Home” Amidst Mumbai’s Multimillion Slum-Dwellers By Parwini Zora

2007-06-24T10:40:00.000-07:00

The richest man in India, Mukesh Ambani, is reportedly building a 27-storey skyscraper mansion in the heart of the country’s commercial capital, Mumbai (Bombay). The total cost of the project is expected to be US$1 billion, roughly the average annual income of 1.5 million Indians.

Ambani is erecting his lavish “home” in a city that has 7 million slum dwellers. Several million more of Mumbai’s 12 million-plus residents live in substandard housing. Such is the price of real estate in Mumbai that even well-paid middle-class professionals cannot afford a decent dwelling. In what is clearly an unintended irony, Ambani has named his mansion “Antilia,” after a mythical island.

Due to a sustained real estate bubble in Mumbai, Ambani’s unbuilt house and the 4,532-square-metre plot on which it is being erected are already estimated to be worth more than US$1.2 billion.

Mukesh Ambani and his brother Anil are the inheritors of their late father’s Reliance Group, India’s largest private company. Mukesh Ambani’s portion of Reliance Group includes the huge petrochemical division and textile-manufacturing plants. According to the Forbes’ 2007 list of the world’s richest people, the 50-year-old Mukesh Ambani is the 14th-richest person in the world, with a net worth of US$20.1 billion.

Ambani’s architect has said the first six floors of the skyscraper mansion will be reserved for parking. Immediately above will be lodgings for 600 servants and their families. Eight floors have been reserved for “entertainment,” including a mini-theatre and a number of swimming pools, and several more floors will house a health club and rooms for guests.

Mukesh Ambani, his wife, three children, and mother will occupy the top four, non-service, floors, giving them a panoramic view of both Mumbai’s Arabian Sea coastline and the city’s skyline as well as easy access to three helipads on the skyscraper’s roof.

Ambani and various aides and sycophants are reported to consider the proposed mansion as “comparable to those owned by his friends such as Lakshmi Mittal,” the UK-based Indian steel tycoon who last year bought the most expensive house in London for 60 million pounds.

Speaking to (India) timesonline, a Mumbai-based architect commented, “Our wealthiest citizens used to hide their money...they would not drive their Mercedes, they lived in small apartments. Even Mr. Ambani’s father lived in a small block of flats. They were afraid of the taxman. But that attitude has gone; Mukesh has made his money and good for him if he wants to flaunt it.”

While India’s rich now shamelessly flaunt their wealth, fully three quarters of India’s population of 1.1 billion live in abysmal poverty, with tens of millions regularly receiving insufficient nourishment.

According to official government estimates, the number of people living in substandard, slumlike dwellings has more than doubled in the past two decades, rising from 27.9 million in 1981 to 61.8 million in 2001.

The social misery and economic insecurity of the vast majority of urban and rural Indians have become especially acute since 1991, when the Indian elite abandoned a national economic-development strategy in favor of fully integrating India into the world capitalist economy and making India a cheap-labour producer for the world market. Even while the country’s economy has grown dramatically, many hundreds of millions of rural and urban poor have become further impoverished.

The agricultural sector, which provides more than 60 percent of all Indians with their livelihood, has been devastated by the diversion of funds from agriculture to the infrastructure projects favoured by Indian and international capital, the reduction in agricultural price supports, and other pro-investor policies.

The state of Maharashtra, whose capital is Mumbai, has witnessed the emergence of a new, abhorrent social phenomenon—suicides of indebted farmers. This year alone, 416 debt-ridden, cotton-growing farmers in the state’s Vidarbha region have taken their own lives.

Meanwhile, millions of small-scale peasants and landless agricultural labourers have been forced to migrate to cities in search of work, greatly expanding the slums in the cities.

“The rise in slums is due to the lack of affordable housing provided by the government,” said Maju Varghese, a representative of the Yuva Urban, a non-governmental organisation (NGO) that works with Mumbai’s urban poor. “The Government has withdrawn from the whole area of housing and land prices have gone to such heights that people can’t afford proper housing. Slums are here to stay. The government has completely ignored this problem.”

Mumbai, which has India’s largest slum population, also has the dubious honour of containing Asia’s largest single slum, Dharavi.

The slum, which is home to more than a million people, is considered by Mumbai’s political and economic elite to be a blight on the city. A blight it wants to eliminate by a “slum clearance” campaign that will render—as such campaigns have repeatedly done in cities across India—the slum-dwellers homeless.

Recently, the government put the 223-hectare slum up for sale to international property developers, with advertisements splashed in newspapers all over the world, including the Wall Street Journal and the Financial Times. The advertisements proclaim the sale as “the opportunity of the millennium,” offering a “perennial source of income” to the successful bidders.

As part of the state and municipal governments’ plan to convert Mumbai into a “world-class city,” Dharavi’s slum dwellings are to be replaced by seven-storey apartment blocks, hospitals, schools, gardens, jogging tracks and even a golf-driving range for an estimated cost of about US$2.3 billion.

Arputham Jockin, the president of the National Slum Dwellers Federation, recently told the press, “selling this land to the global market and giving it over for commercial use—how will that improve our lives? Ninety per cent of the people here want a stake in their future and a say in how it is transformed. It has to work from the bottom up. Not top down.” He warned that a ruthless land-acquisition plan on the part of the state government could well result in a “bloodbath.”

Opponents of the slum’s demolition have already hung black flags over their homes. Most of those who will be “relocated” are not only threatened with homelessness but also with the loss of their livelihood. According to unofficial estimates, Dharavi accounts for US$1 billion in annual economic activity driven by various cottage industries such as potteries, tanneries, bakeries, metal workshops and, prominently, garbage recycling.

So scarce and expensive is housing in Mumbai that even a small 8x10-foot hut in Dharavi is valued at between Rs. 150,000 and 300,000 (US$3,600 and US$7,200). As a result, an estimated 42 percent of the Mumbai’s slum dwellers are forced to live on less than 10 square metres (about 108 square feet) of land with every 800 or so people forced to share a single toilet.

Sixty-year-old Razman, living in Dharvi for the last 10 years, showed his “house” to BBC reporters by stretching its walls with his outstretched hands. This small dwelling is home to five members of his family including two small children. Said Razman, “We want change and for conditions to improve for the people who live here. There is nowhere for my grandchildren to play, but I cannot afford to move from here.”

06 June, 2007 World Socialist Web

What Makes Mainstream Media Mainstream By Noam Chomsky

2007-06-23T21:58:00.001-07:00

Part of the reason why I write about the media is because I am interested in the whole intellectual culture, and the part of it that is easiest to study is the media. It comes out every day. You can do a systematic investigation. You can compare yesterday’s version to today’s version. There is a lot of evidence about what’s played up and what isn’t and the way things are structured.

My impression is the media aren’t very different from scholarship or from, say, journals of intellectual opinion—there are some extra constraints—but it’s not radically different. They interact, which is why people go up and back quite easily among them.

You look at the media, or at any institution you want to understand. You ask questions about its internal institutional structure. You want to know something about their setting in the broader society. How do they relate to other systems of power and authority? If you’re lucky, there is an internal record from leading people in the information system which tells you what they are up to (it is sort of a doctrinal system). That doesn’t mean the public relations handouts but what they say to each other about what they are up to. There is quite a lot of interesting documentation.

Those are three major sources of information about the nature of the media. You want to study them the way, say, a scientist would study some complex molecule or something. You take a look at the structure and then make some hypothesis based on the structure as to what the media product is likely to look like. Then you investigate the media product and see how well it conforms to the hypotheses. Virtually all work in media analysis is this last part—trying to study carefully just what the media product is and whether it conforms to obvious assumptions about the nature and structure of the media.

Well, what do you find? First of all, you find that there are different media which do different things, like the entertainment/Hollywood, soap operas, and so on, or even most of the newspapers in the country (the overwhelming majority of them). They are directing the mass audience.

There is another sector of the media, the elite media, sometimes called the agenda-setting media because they are the ones with the big resources, they set the framework in which everyone else operates. The New York Times and CBS, that kind of thing. Their audience is mostly privileged people. The people who read the New York Times—people who are wealthy or part of what is sometimes called the political class—they are actually involved in the political system in an ongoing fashion. They are basically managers of one sort or another. They can be political managers, business managers (like corporate executives or that sort of thing), doctoral managers (like university professors), or other journalists who are involved in organizing the way people think and look at things.

The elite media set a framework within which others operate. If you are watching the Associated Press, who grind out a constant flow of news, in the mid-afternoon it breaks and there is something that comes along every day that says "Notice to Editors: Tomorrow’s New York Times is going to have the following stories on the front page." The point of that is, if you’re an editor of a newspaper in Dayton, Ohio and you don’t have the resources to figure out what the news is, or you don’t want to think about it anyway, this tells you what the news is. These are the stories for the quarter page that you are going to devote to something other than local affairs or diverting your audience. These are the stories that you put there because that’s what the New York Times tells us is what you’re supposed to care about tomorrow. If you are an editor in Dayton, Ohio, you would sort of have to do that, because you don’t have much else in the way of resources. If you get off line, if you’re producing stories that the big press doesn’t like, you’ll hear about it pretty soon. In fact, what just happened at San Jose Mercury News is a dramatic example of this. So there are a lot of ways in which power plays can drive you right back into line if you move out. If you try to break the mold, you’re not going to last long. That framework works pretty well, and it is understandable that it is just a reflection of obvious power structures.

The real mass media are basically trying to divert people. Let them do something else, but don’t bother us (us being the people who run the show). Let them get interested in professional sports, for example. Let everybody be crazed about professional sports or sex scandals or the personalities and their problems or something like that. Anything, as long as it isn’t serious. Of course, the serious stuff is for the big guys. "We" take care of that.

What are the elite media, the agenda-setting ones? The New York Times and CBS, for example. Well, first of all, they are major, very profitable, corporations. Furthermore, most of them are either linked to, or outright owned by, much bigger corporations, like General Electric, Westinghouse, and so on. They are way up at the top of the power structure of the private economy which is a very tyrannical structure. Corporations are basically tyrannies, hierarchic, controled from above. If you don’t like what they are doing you get out. The major media are just part of that system.

What about their institutional setting? Well, that’s more or less the same. What they interact with and relate to is other major power centers—the government, other corporations, or the universities. Because the media are a doctrinal system they interact closely with the universities. Say you are a reporter writing a story on Southeast Asia or Africa, or something like that. You’re supposed to go over to the big university and find an expert who will tell you what to write, or else go to one of the foundations, like Brookings Institute or American Enterprise Institute and they will give you the words to say. These outside institutions are very similar to the media.

The universities, for example, are not independent institutions. There may be independent people scattered around in them but that is true of the media as well. And it’s generally true of corporations. It’s true of Fascist states, for that matter. But the institution itself is parasitic. It’s dependent on outside sources of support and those sources of support, such as private wealth, big corporations with grants, and the government (which is so closely interlinked with corporate power you can barely distinguish them), they are essentially what the universities are in the middle of. People within them, who don’t adjust to that structure, who don’t accept it and internalize it (you can’t really work with it unless you internalize it, and believe it); people who don’t do that are likely to be weeded out along the way, starting from kindergarten, all the way up. There are all sorts of filtering devices to get rid of people who are a pain in the neck and think independently. Those of you who have been through college know that the educational system is very highly geared to rewarding conformity and obedience; if you don’t do that, you are a troublemaker. So, it is kind of a filtering device which ends up with people who really honestly (they aren’t lying) internalize the framework of belief and attitudes of the surrounding power system in the society. The elite institutions like, say, Harvard and Princeton and the small upscale colleges, for example, are very much geared to socialization. If you go through a place like Harvard, most of what goes on there is teaching manners; how to behave like a member of the upper classes, how to think the right thoughts, and so on.

If you’ve read George Orwell’s Animal Farm which he wrote in the mid-1940s, it was a satire on the Soviet Union, a totalitarian state. It was a big hit. Everybody loved it. Turns out he wrote an introduction to Animal Farm which was suppressed. It only appeared 30 years later. Someone had found it in his papers. The introduction to Animal Farm was about "Literary Censorship in England" and what it says is that obviously this book is ridiculing the Soviet Union and its totalitarian structure. But he said England is not all that different. We don’t have the KGB on our neck, but the end result comes out pretty much the same. People who have independent ideas or who think the wrong kind of thoughts are cut out.

He talks a little, only two sentences, about the institutional structure. He asks, why does this happen? Well, one, because the press is owned by wealthy people who only want certain things to reach the public. The other thing he says is that when you go through the elite education system, when you go through the proper schools in Oxford, you learn that there are certain things it’s not proper to say and there are certain thoughts that are not proper to have. That is the socialization role of elite institutions and if you don’t adapt to that, you’re usually out. Those two sentences more or less tell the story.

When you critique the media and you say, look, here is what Anthony Lewis or somebody else is writing, they get very angry. They say, quite correctly, "nobody ever tells me what to write. I write anything I like. All this business about pressures and constraints is nonsense because I’m never under any pressure." Which is completely true, but the point is that they wouldn’t be there unless they had already demonstrated that nobody has to tell them what to write because they are going say the right thing. If they had started off at the Metro desk, or something, and had pursued the wrong kind of stories, they never would have made it to the positions where they can now say anything they like. The same is mostly true of university faculty in the more ideological disciplines. They have been through the socialization system.

Okay, you look at the structure of that whole system. What do you expect the news to be like? Well, it’s pretty obvious. Take the New York Times. It’s a corporation and sells a product. The product is audiences. They don’t make money when you buy the newspaper. They are happy to put it on the worldwide web for free. They actually lose money when you buy the newspaper. But the audience is the product. The product is privileged people, just like the people who are writing the newspapers, you know, top-level decision-making people in society. You have to sell a product to a market, and the market is, of course, advertisers (that is, other businesses). Whether it is television or newspapers, or whatever, they are selling audiences. Corporations sell audiences to other corporations. In the case of the elite media, it’s big businesses.
Well, what do you expect to happen? What would you predict about the nature of the media product, given that set of circumstances? What would be the null hypothesis, the kind of conjecture that you’d make assuming nothing further. The obvious assumption is that the product of the media, what appears, what doesn’t appear, the way it is slanted, will reflect the interest of the buyers and sellers, the institutions, and the power systems that are around them. If that wouldn’t happen, it would be kind of a miracle.

Okay, then comes the hard work. You ask, does it work the way you predict? Well, you can judge for yourselves. There’s lots of material on this obvious hypothesis, which has been subjected to the hardest tests anybody can think of, and still stands up remarkably well. You virtually never find anything in the social sciences that so strongly supports any conclusion, which is not a big surprise, because it would be miraculous if it didn’t hold up given the way the forces are operating.

The next thing you discover is that this whole topic is completely taboo. If you go to the Kennedy School of Government or Stanford, or somewhere, and you study journalism and communications or academic political science, and so on, these questions are not likely to appear. That is, the hypothesis that anyone would come across without even knowing anything that is not allowed to be expressed, and the evidence bearing on it cannot be discussed. Well, you predict that too. If you look at the institutional structure, you would say, yeah, sure, that’s got to happen because why should these guys want to be exposed? Why should they allow critical analysis of what they are up to take place? The answer is, there is no reason why they should allow that and, in fact, they don’t. Again, it is not purposeful censorship. It is just that you don’t make it to those positions. That includes the left (what is called the left), as well as the right. Unless you have been adequately socialized and trained so that there are some thoughts you just don’t have, because if you did have them, you wouldn’t be there. So you have a second order of prediction which is that the first order of prediction is not allowed into the discussion.
The last thing to look at is the doctrinal framework in which this proceeds. Do people at high levels in the information system, including the media and advertising and academic political science and so on, do these people have a picture of what ought to happen when they are writing for each other (not when they are making graduation speeches)? When you make a commencement speech, it is pretty words and stuff. But when they are writing for one another, what do people say about it?

There are basically three currents to look at. One is the public relations industry, you know, the main business propaganda industry. So what are the leaders of the PR industry saying? Second place to look is at what are called public intellectuals, big thinkers, people who write the "op eds" and that sort of thing. What do they say? The people who write impressive books about the nature of democracy and that sort of business. The third thing you look at is the academic stream, particularly that part of political science which is concerned with communications and information and that stuff which has been a branch of political science for the last 70 or 80 years.

So, look at those three things and see what they say, and look at the leading figures who have written about this. They all say (I’m partly quoting), the general population is "ignorant and meddlesome outsiders." We have to keep them out of the public arena because they are too stupid and if they get involved they will just make trouble. Their job is to be "spectators," not "participants."

They are allowed to vote every once in a while, pick out one of us smart guys. But then they are supposed to go home and do something else like watch football or whatever it may be. But the "ignorant and meddlesome outsiders" have to be observers not participants. The participants are what are called the "responsible men" and, of course, the writer is always one of them. You never ask the question, why am I a "responsible man" and somebody else is in jail? The answer is pretty obvious. It’s because you are obedient and subordinate to power and that other person may be independent, and so on. But you don’t ask, of course. So there are the smart guys who are supposed to run the show and the rest of them are supposed to be out, and we should not succumb to (I’m quoting from an academic article) "democratic dogmatisms about men being the best judges of their own interest." They are not. They are terrible judges of their own interests so we have do it for them for their own benefit.

Actually, it is very similar to Leninism. We do things for you and we are doing it in the interest of everyone, and so on. I suspect that’s part of the reason why it’s been so easy historically for people to shift up and back from being, sort of enthusiastic Stalinists to being big supporters of U.S. power. People switch very quickly from one position to the other, and my suspicion is that it’s because basically it is the same position. You’re not making much of a switch. You’re just making a different estimate of where power lies. One point you think it’s here, another point you think it’s there. You take the same position.

@PAR SUB = How did all this evolve? It has an interesting history. A lot of it comes out of the first World War, which is a big turning point. It changed the position of the United States in the world considerably. In the 18th century the U.S. was already the richest place in the world. The quality of life, health, and longevity was not achieved by the upper classes in Britain until the early 20th century, let alone anybody else in the world. The U.S. was extraordinarily wealthy, with huge advantages, and, by the end of the 19th century, it had by far the biggest economy in the world. But it was not a big player on the world scene. U.S. power extended to the Caribbean Islands, parts of the Pacific, but not much farther.

During the first World War, the relations changed. And they changed more dramatically during the second World War. After the second World War the U.S. more or less took over the world. But after first World War there was already a change and the U.S. shifted from being a debtor to a creditor nation. It wasn’t huge, like Britain, but it became a substantial actor in the world for the first time. That was one change, but there were other changes.

The first World War was the first time there was highly organized state propaganda. The British had a Ministry of Information, and they really needed it because they had to get the U.S. into the war or else they were in bad trouble. The Ministry of Information was mainly geared to sending propaganda, including huge fabrications about "Hun" atrocities, and so on. They were targeting American intellectuals on the reasonable assumption that these are the people who are most gullible and most likely to believe propaganda. They are also the ones that disseminate it through their own system. So it was mostly geared to American intellectuals and it worked very well. The British Ministry of Information documents (a lot have been released) show their goal was, as they put it, to control the thought of the entire world, a minor goal, but mainly the U.S. They didn’t care much what people thought in India. This Ministry of Information was extremely successful in deluding hot shot American intellectuals into accepting British propaganda fabrications. They were very proud of that. Properly so, it saved their lives. They would have lost the first World War otherwise.

In the U.S., there was a counterpart. Woodrow Wilson was elected in 1916 on an anti-war platform. The U.S. was a very pacifist country. It has always been. People don’t want to go fight foreign wars. The country was very much opposed to the first World War and Wilson was, in fact, elected on an anti-war position. "Peace without victory" was the slogan. But he was intending to go to war. So the question was, how do you get the pacifist population to become raving anti-German lunatics so they want to go kill all the Germans? That requires propaganda. So they set up the first and really only major state propaganda agency in U.S. history. The Committee on Public Information it was called (nice Orwellian title), called also the Creel Commission. The guy who ran it was named Creel. The task of this commission was to propagandize the population into a jingoist hysteria. It worked incredibly well. Within a few months there was a raving war hysteria and the U.S. was able to go to war.

A lot of people were impressed by these achievements. One person impressed, and this had some implications for the future, was Hitler. If you read Mein Kampf, he concludes, with some justification, that Germany lost the first World War because it lost the propaganda battle. They could not begin to compete with British and American propaganda which absolutely overwhelmed them. He pledges that next time around they’ll have their own propaganda system, which they did during the second World War. More important for us, the American business community was also very impressed with the propaganda effort. They had a problem at that time. The country was becoming formally more democratic. A lot more people were able to vote and that sort of thing. The country was becoming wealthier and more people could participate and a lot of new immigrants were coming in, and so on.

So what do you do? It’s going to be harder to run things as a private club. Therefore, obviously, you have to control what people think. There had been public relation specialists but there was never a public relations industry. There was a guy hired to make Rockefeller’s image look prettier and that sort of thing. But this huge public relations industry, which is a U.S. invention and a monstrous industry, came out of the first World War. The leading figures were people in the Creel Commission. In fact, the main one, Edward Bernays, comes right out of the Creel Commission. He has a book that came out right afterwards called Propaganda. The term "propaganda," incidentally, did not have negative connotations in those days. It was during the second World War that the term became taboo because it was connected with Germany, and all those bad things. But in this period, the term propaganda just meant information or something like that. So he wrote a book called Propaganda around 1925, and it starts off by saying he is applying the lessons of the first World War. The propaganda system of the first World War and this commission that he was part of showed, he says, it is possible to "regiment the public mind every bit as much as an army regiments their bodies." These new techniques of regimentation of minds, he said, had to be used by the intelligent minorities in order to make sure that the slobs stay on the right course. We can do it now because we have these new techniques.
This is the main manual of the public relations industry. Bernays is kind of the guru. He was an authentic Roosevelt/Kennedy liberal. He also engineered the public relations effort behind the U.S.-backed coup which overthrew the democratic government of Guatemala.

His major coup, the one that really propelled him into fame in the late 1920s, was getting women to smoke. Women didn’t smoke in those days and he ran huge campaigns for Chesterfield. You know all the techniques—models and movie stars with cigarettes coming out of their mouths and that kind of thing. He got enormous praise for that. So he became a leading figure of the industry, and his book was the real manual.

Another member of the Creel Commission was Walter Lippmann, the most respected figure in American journalism for about half a century (I mean serious American journalism, serious think pieces). He also wrote what are called progressive essays on democracy, regarded as progressive back in the 1920s. He was, again, applying the lessons of the work on propaganda very explicitly. He says there is a new art in democracy called manufacture of consent. That is his phrase. Edward Herman and I borrowed it for our book, but it comes from Lippmann. So, he says, there is this new art in the method of democracy, "manufacture of consent." By manufacturing consent, you can overcome the fact that formally a lot of people have the right to vote. We can make it irrelevant because we can manufacture consent and make sure that their choices and attitudes will be structured in such a way that they will always do what we tell them, even if they have a formal way to participate. So we’ll have a real democracy. It will work properly. That’s applying the lessons of the propaganda agency.

Academic social science and political science comes out of the same thing. The founder of what’s called communications and academic political science is Harold Glasswell. His main achievement was a book, a study of propaganda. He says, very frankly, the things I was quoting before—those things about not succumbing to democratic dogmatism, that comes from academic political science (Lasswell and others). Again, drawing the lessons from the war time experience, political parties drew the same lessons, especially the conservative party in England. Their early documents, just being released, show they also recognized the achievements of the British Ministry of Information. They recognized that the country was getting more democratized and it wouldn’t be a private men’s club. So the conclusion was, as they put it, politics has to become political warfare, applying the mechanisms of propaganda that worked so brilliantly during the first World War towards controlling people’s thoughts.

That’s the doctrinal side and it coincides with the institutional structure. It strengthens the predictions about the way the thing should work. And the predictions are well confirmed. But these conclusions, also, are not allowed to be discussed. This is all now part of mainstream literature but it is only for people on the inside. When you go to college, you don’t read the classics about how to control peoples minds.

Just like you don’t read what James Madison said during the constitutional convention about how the main goal of the new system has to be "to protect the minority of the opulent against the majority," and has to be designed so that it achieves that end. This is the founding of the constitutional system, so nobody studies it. You can’t even find it in the academic scholarship unless you really look hard.

That is roughly the picture, as I see it, of the way the system is institutionally, the doctrines that lie behind it, the way it comes out. There is another part directed to the "ignorant meddlesome" outsiders. That is mainly using diversion of one kind or another. From that, I think, you can predict what you would expect to find.

CENTRE PLANS TO FREE FOREST LAND FOR SEZ, Sudipta Moitra

2007-06-23T03:59:00.000-07:00

After controversies ran the SEZ policy into the ground, the government is planning "forest SEZs". In a move couched in politically correct jargon - "multi-stakeholder partnership" - the government intends to give degraded forest land to industry to produce raw material like paper pulp.

The environment ministry proposal will contract government-owned forest lands for growing plantations. Called "multi-stakeholder partnership for degraded forest lands", the proposal has been shared with key ministries and a review of the proposition along with other ideas for increasing forest cover is expected soon.

The government intends to invite bids for degraded forest land, areas with a tree cover of less than 10%, under a contract to industries to "farm" trees which can be used as raw material. The proposal has been framed in the backdrop of hectic lobbying by the paper pulp industry which has been seeking to access forest lands.

On previous occasions, industry has requested the government to open up 1.2 million hectares of degraded forest land to such "partnerships". On the face of it, the proposal has been presented as a win-win deal. The ministry believes it will help generate investment in increasing India's forest cover to 33% by 2012. The industry is looking at an assured source of raw material. Those who live off the land are expected to benefit from being employed as labour by industry and whatever else they can negotiate with the industry.

At present, 80% of virgin wood for the paper pulp industry comes from private growers through open market sale. The proposal entails private companies to bid for forest or community land, after acceptance by the gram panchayat in case of the latter. The forest department will assess the proposals for technical and economic feasibility. If there is an on-going joint forest management (JFM) programme - where villagers harvest forest products for a livelihood - then they are expected to negotiate terms with industry.

"We think these JFMs are now politically mature enough to negotiate with these industries," said a senior ministry official. The test of this "maturity" has not been defined as yet. The industry will have the right to buy off traditional rights of fodder and other forest produce from people if it can negotiate with the gram sabha or JFM committees.

This reduces the government's role in transfer of forest land, something which has been bitterly criticised in the proposed SEZ policy now being studied by a GoM. While an earlier draft of the multi-stakeholder proposal suggested a cap on the size of land as well as an upper time limit for plantations, the current proposals does not have any cut-offs.

A senior official said duration and size would be negotiated for each proposal on a "case-to-case basis". The original draft, prepared by the Indian Institute of Forestry Management (IIFM), Bhopal, also gave the first right of refusal to work on contracted lands to villagers who had traditional rights over forests.

A similar proposal was mooted in 1996. At the time, government had suggested direct leasing of forest land to industry but the Planning Commission had pointed out that this was equivalent to giving subsidy to business at the cost of thousands of poor people dependent on forests.

The obvious concern that the market for lakhs of tree-growing farmers, who have undertaken agro-forestry, would crash as industry got subsidised and assured timber stirred sections of civil society into an agitation, forcing the government to drop the idea.

The current proposal has come up after the Confederation of Indian Industry brought out a report attempting to rubbish the 1996 Planning Commission report and looked to rework the proposal to deflect criticism. After thegovernment worked with CII and asked IIFM, Bhopal, to prepare a draft, it has been further fine-tuned.

‘Forest SEZs’ on degraded forest lands

The Ministry of Environment and Forests proposes to invite bids for areas with a tree cover of less than 10% under contract to the paper industry to ‘farm’ trees for paper pulp. It calls the plan a ‘multi-stakeholder partnership for degraded forest lands’

The SEZ controversy remains unresolved but the Indian government now plans to allow the paper industry to use degraded forest land to plant trees for its main raw material, paper pulp.

The Ministry of Environment and Forests (MoEF) proposes to invite bids for areas with a tree cover of less than 10%, under contract to the industry to ‘farm’ trees to produce paper pulp.

But the ministry is fighting shy of using the dreaded term Special Economic Zone, choosing instead to call the plan ‘multi-stakeholder partnership for degraded forest lands’.

It believes these forest SEZs will help generate investment in increasing India’s forest cover to 33% by 2012. And, while the paper manufacturing industry is looking at an assured source of raw material, the MoEF says those who live off the land will benefit from being employed as labour by the industry and whatever other benefits they can negotiate.

The forest department will assess proposals for their technical and economic feasibility. If there is an on-going Joint Forest Management (JFM) programme -- where villagers harvest forest produce for a livelihood -- then they are expected to negotiate terms with the concerned business.

Industry will have the right to buy off traditional rights to fodder and other forest produce from people if it can negotiate with the gram sabha or JFM committee. This reduces the government’s role in transfer of forest land, an aspect of the SEZ proposal -- currently under review -- that has evoked scathing criticism.

Reacting to the move, a senior ministry official said: “We think these forest management programmes are now politically mature enough to negotiate with these industries.” How this “maturity” is measured has not been specified.

While an earlier draft of the multi-stakeholder proposal prepared by the Indian Institute of Forest Management, Bhopal, suggested a cap on the size of land as well as an upper time limit for plantations, the current proposal does not impose such limitations.

A senior official said duration and size would be negotiated for each proposal on a “case-by-case basis”. The original draft also gave first right of refusal to work on contracted land to villagers.
Sources say the current proposal was framed after hectic lobbying by the industry that has been seeking access to forest lands. On previous occasions, industry has requested the government to open up 1.2 million hectares of degraded forest land for such “partnerships”.

A similar proposal was floated in 1996, where the government suggested direct leasing of forest land to industry. However, the Planning Commission of India rightly pointed out that this amounted to subsidising business at the cost of thousands of poor who were dependent on the forests.

The obvious concern that the market for thousands of tree-growing farmers who have undertaken agro-forestry would crash with the supply of timber stirred an agitation, forcing the government to drop its plan.

The current proposal was mooted after the Confederation of Indian Industry brought out a report attempting to debunk the 1996 Planning Commission report.

At present, 80% of virgin wood for the paper pulp industry comes from private growers through open market sale. This proposal allows private companies to bid for forest or community land, after the idea has been accepted by the gram panchayat.

Source:www.googlenews.com, May 21, 2007

www.yahoonews.com, May 21, 2007

Index of equity By APARAJITA BAKSHI and Critique of the article By Aditi Sarkar

2007-06-23T00:09:00.000-07:00

A recent study shows that West Bengal is a leader with respect to redistribution of land to Dalit and Adivasi households.

IN the heat of the current debate on land acquisition in West Bengal, and in the aftermath of the violence in Nandigram, some critics have questioned the basic character of development in the State. They have attempted variously to portray the Communist Party of India (Marxist) and the Left Front as organisations of upper-caste elites whose interests, by implication, are distant from those of the socially oppressed, or West Bengal as a State where the plight of the Dalit and Adivasi masses, under globalisation and liberalisation, is no different from their plight elsewhere in the country. Even preliminary research on Dalit and Adivasi households in village economies and their access to land in West Bengal shows that such views have little basis in the reality of the post-land reform West Bengal countryside.

West Bengal is a State where policy efforts have been directed to distribute land to the landless and the poor, and specifically to Dalits, Adivasis and other deprived social groups, and also to issue joint title deeds to men and women. Some of the social-distributive effects of the land reform programme show up in recent village-based research and analyses of secondary data. These show that West Bengal is a leader with respect to the distribution of agricultural and homestead land to Dalit and Adivasi households, and also with respect to the purchase of agricultural land by the rural poor, including Dalit households.

The village-level data come mainly from a series of village surveys conducted by Vikas Rawal and others in 2005 in seven villages in different agro-climatic zones in West Bengal (a study in which this writer participated).

The villages studied were: a predominantly tribal village of West Medinipur district, two villages from the agriculturally prosperous Barddhaman district, two traditional agricultural villages from Malda and Koch Bihar districts, a village in Uttar Dinajpur where tea is grown on individual holdings, and a prawn-cultivating village in the estuarine region of North 24 Parganas.

First, let us consider the redistribution of crop land to the landless and rural poor. In five of the seven villages the redistribution of land was an important component of land reform. For each of them, this writer constructed a simple Index of Access to agricultural land. This Index measures the share of Dalit households (or other social groups) in total land ownership, weighted by their share in total population. Thus, if Dalit households constitute 20 per cent of the total population and they own 20 per cent of the land in the village, the Index of Access is 1. Where the Access Index is less than 1, it represents a situation in which the proportion of Dalit households in the population is greater than the share of total land that they own.

Our data show that in three of these five villages, the Access Indices for Dalit households were 1.49, 1.28 and 1.21; in other words, their share in land ownership was greater than their share in the population. In the predominantly Adivasi village in West Medinipur, more than 60 per cent of Scheduled Tribe households gained agricultural land and almost 75 per cent of households gained agricultural or homestead land through land reform. In the last village (in Malda district), the Access Index was lower, that is 0.5, because the main recipients of land in the village were income-poor households from the Tanti caste, which is classified as an Other Backward Class (OBC).

By way of comparison, according to data from the Land and Livestock Holdings Survey conducted by the National Sample Survey Organisation (NSSO), the Access Index for Dalits in rural India as a whole was only 0.5. The NSSO data tend to confirm our village results, since they show that the Access Index for Dalit households in West Bengal was 0.8 (unfortunately, the most recent data in this regard are from 1992; more recent results from the 2003-04 survey are yet to be released). This is the highest Access Index for Dalits among the States of India after Tripura (where the proportion of Scheduled Castes in the rural population is smaller than in West Bengal).

Secondly, let us consider the distribution of house-site or homestead land, which is an important component of land reform in West Bengal. Ownership of homestead land means not only a place to live and a changed position in society, but also represents access to a new source of potential nutrition and livelihood support as a result of house-site and kitchen-garden cultivation. In all the seven study villages, we found that the Dalit and Adivasi households were the major beneficiaries of this aspect of land reform. Out of 210 households that gained homestead land, 21 per cent were Dalit, 46 per cent were Adivasi, 24 per cent were Muslim, and 10 per cent belonged to other caste groups. Of the last group, a majority belonged to the OBCs.

Thirdly, let us consider the participation of the poor in land markets. A 2001 study by Vikas Rawal of land markets in two West Bengal villages published in the international journal Economic Development and Cultural Change reported noteworthy results. The study showed that while empirical studies in other States had found that the net buyers of cultivable land were large landowners and the net sellers of agricultural land were small landowners, the trend was quite the opposite in the West Bengal villages that were studied. The major buyers in these two villages of Bankura district were landless households and small landowners. The paper attributed this difference to the increased purchasing power among the poor in West Bengal facilitated by land distribution, tenancy reform, higher wage rates, and access to credit.

The present study confirms and adds a new dimension to this conclusion. Five villages of the seven have significant Dalit populations. In four of them, Dalit and Muslim households were net buyers of land, while caste Hindus were net sellers. The acquisition of ceiling-surplus land by the Government of West Bengal for redistribution was and still remains a major disincentive for large landowners to purchase land.

The recent policy document on land use of the Government of West Bengal says that the State is poised for "advance into a new phase of industrial modernisation... and diversification into different forms of non-agricultural economic activity." If such a policy is indeed to succeed, West Bengal will have been among the few States of India where industrialisation and economic diversification are based on the achievement of a socially broad-based land reform.

Aparajita Bakshi is a Junior Research Fellow at the Indian Statistical Institute working on issues of household incomes in rural West Bengal.

Critique of article Index of Equity on Land Distribution in West Bengal
By Aditi Sarkar,

Aparajita Bakshi (2007) in her recent article Index of Equity constructs, in her own words, “a simple index of access to agricultural land” to claim the “socially broad based land reform” achievements by the government of West Bengal. This article professes the great strides that the government of West Bengal has made in achieving equality by enacting its policies of distributing land among the Dalits and the Adivasis.

Equity was measured simplistically as some combination of the fraction of land owned by certain under-privileged groups compared to the size of these groups to the total population. Even if this measure was called land-distribution equity, instead of equity index, it is ill-conceived. It does not, for example, factor in fundamental qualities of the land like soil type, its arability and its proximity to irrigation facilities.

The main point of this critique, however, is to show how the “simple” construction of an index of land distribution has been conflated with the much more complex and larger idea of equity. This is important, since Ms. Bakshi does not name her article Agricultural Land Access Index as would seem natural and true to her work, however ill-conceived. It is rather named Index of Equity, a term that has connotations of some grand index of justice to humanity.

Ms Bakshi implies two definitions of equity in her article, neither of which is true. First, she implies that equity means equal access. Second, she implies that equity is achieved by equal distribution of a commodity. Equity is unfortunately a complex concept that cannot be defined so simply.Equity is related to equality; but one needs to understand the difference between the two.

Equality is “an ideal, a moral imperative and a sociological datum, a legal principle and a social norm” (Boorstim, 1953). Whatever equality is, it is well accepted as something that can not and should not be practiced in most spheres of public policy. An example should clarify why equality is off thepolitical agenda for several years now. Suppose a rural bank in India offers equal opportunity loans to men and women to start small businesses based on their earnings. In a society where historically women either have had no salaries or are paid less then men for the same work and have no properties in their names, this egalitarian rule would make it impossible for a woman to obtain a loan. Public policy thus needs to be equitable and not equal.

In Inequality Reexamined Amartya Sen (1992) confronts the “heterogeneity of human beings” and “the multiplicity of variables in terms of which equality can be judged” to clarify the complexity of the matter. At a minimum, equality can be judged to have seven dimensions (Boles, 1986). A necessary condition for an index to appropriately measure equity would be to take into account all the dimensions of equality.

One of the fundamental dimensions of equality is the “distribution of prestige and social status within the larger society” –something that can not be ignored when talking about the Dalits and the Adivasis.

The six other dimensions mentioned here are also vitally important and none can be ignored. “Freedom of speech, association and petition, equal access to public office, and fair and free elections,” considered “political equality” is the second dimension of equality.

“Equality of income, job security and personal autonomy” is the third dimension of equality. Equality of access that implies “differential physical, political, juridical and economic barriers to approaching, entering, obtaining and making use of the full range of goods and services to the society” is the fourth dimension of equality.

It is worthwhile to note at this point that in Ms. Bakshi’s index of access to agricultural land none of the aspects of equality of access, mentioned above, is considered.

Equality of influence, power and control that refers to “the pattern of agenda building, office holding, and decision making in society” that is denied to the lower castes in India is considered the fifth dimension of equality. Juridical equality, where “individuals must receive equal treatment from government through a system of [local] and [national] courts dedicated to impartial adjudication and enforcement of legal equality” is the sixth dimension of equality. Last but not the least, distributive equality, requiring “apportionment of goods and services,” is touched upon very lightly by Ms. Bakshi, is the seventh dimension of equality. It is only when all of these dimensions are taken into account, together with the innate heterogeneity of human beings, that one may form an index of equity. Until then let us not conflate simple one-dimensional measures of land distribution to the complex multi-dimensional ideals of equity.

The nature of justice, and hence equity, has been debated since the time of Socrates. Rawls (1971), one of the foremost scholars of more recent times, defined it as “the first virtue of social institutions, as truth is of systems of thought.” It maybe time for Ms. Bakshi to bring some thought to her system of constructing indices. I leave it upon her to decide to whom and by how much she would like to be true.

Bibliography
Bakshi, A. (2007). Index of equity. Frontline, 24(7).
Boles, J. K. (Ed.). (1986). The Egalitarian City: Issues of Rights, Distribution, Access and Power. New York, Hong Kong, Tokyo, Sydney: Praeger
Boorstim, D. J. (1953). The Genius of American Politics. Chicago: The University of Chicago Press.
Rawls, J. (1971). The Theory of Justice. Cambridge, MA: Harvard University Press.
Sen, A. (1992). Inequality Reexamined. Cambridge, MA: Harvard University Press.

References on Land Distribution in West Bengal:

1. Dipankar Basu, EPW: April 21, 2001

Author’s conclusion :
Though it cannot be denied that the land reforms had some beneficial impact on the peasantry in West Bengal (if compared to say Bihar or Orissa or MP), it was rather limited. Most importantly, the lion’s share of the benefit was cornered by the middle peasants; the agricultural labourers did not gain much. It was this emerging middle peasants that formed the bulwark of CPI(M) rule in rural West Bengal; they hegemonised the rural proletariat and small/marginal farmers through the party apparatus. Another interesting fact which is not known widely is that most of the land redistribution took place BEFORE the LF government came to power in 1977, i.e., most of the benefits came because of the radical movement of the agricultural workers andsmall peasants led by the Naxalites and not because of the LF government. If anything, the LF government put brakes on the movement and thereby consciously limited the possible scope of land reforms.

2. Paper by Anirban Dasgupta

Author’s conclusion:

“…the land redistribution undertaken by the LFG has been very limited in scope. Although it involves a sizable portion of the population dependent onagriculture, the amount of land redistributed has been meager. As a result, the agrarian structure in rural WB has not witnessed any significant change compared to the pre-reform period. Our analysis of ownership distribution of landholdings provides evidence that the level of concentration of land ownership has remained almost unchanged in the one and a half decades since the resumption of land distribution in 1977. The actual deterioration in the distribution of operational holdings (if the NSS estimates are accepted) since the LFG policies imply that the presence of tenancy has only managed to exacerbate the inequality in the access to land.”

Freedom from the Margins By Dr. Vandana Shiva

2007-06-22T23:26:00.000-07:00

Throughout the coastal states of India - West Bengal, Orissa, Gujarat, Andhra Pradesh, Tamil Nadu, Kerala, Goa, Maharashtra - coastal communities celebrated 15th August differently from the official India with its empty rhetoric and the radical India with its negativity of Black Flag demonstrations against the failures of the last 50 years. Under the leadership of National Action Committee Against Coastal Industrial Aquaculture (NACACIA), coastal communities marched to shrimp farms which were banned by the historic order by the Supreme Court on 11th December 1996 but have continued to operate in total contempt of the court orders. They proudly carried the Indian tri-colour flag and sang the National Song "Vande Mataram". From the coast of India a new meaning is being given to freedom both for the people and the country. For the victims of the aquaculture industry, Independence Day was a day for celebrating and asserting their sovereignty over their natural resources and their freedom to engage in their livelihoods. It was a day for re-committing themselves to continue their struggle to free the coast of the destructive aquaculture industry. It was a day for condemning the attempts by the government, politicians and the industrialists to subvert the Supreme Court judgement which has defended their rights and their coast.

Freedom as the Right to Life.

Our national song begins with the words, Vande MataramSujalam, Suphalam referring to abundance water and the abundance fruits that this rich land has gifted her people. In the coastal areas today there is no drinking water, peasants cannot get the fruits of the earth, and fishworkers cannot get the fruits of the sea because of the ecological havoc caused by the shrimp industry. 1 ha. of an industrial shrimp farm requires 120,000 cubic metres of sea water annually. This 12 metres of saline water over and above the water in coastal ecosystems creates serious problems of ground water salinisation. Ground water salinisation is creating a major drinking water famine creating tremendous difficulties for women of coastal regions. Women are walking for 10 miles to collect water of paying Rs.5/- for a pot of water. Since people’s livelihoods are being destroyed as a result of the destruction of coastal ecosystems, this additional burden is becoming economically unsustainable and families are migrating out of coastal villages. The seepage from the aqua farms creates salinisation and water logging of neighbouring agricultural farms. Salinisation of land creates a forced displacement of peasants and farmers from coastal agriculture. Some of the coastal regions are the most fertile bread baskets of the country. Nellore is named after "Nellu" which means rice in Telugu. This rice bowl is now totally destroyed through the impact of shrimp farms. The Cauvery Delta is another fertile area in which agriculture land is being converted into shrimp farms. The destruction of the rice bowls in coastal districts will contribute to major food insecurity as well as to massive unemployment generating, economic insecurity and social conflict. Factory farming of shrimp requires 4-6 tons per hectare of artificial feed. Only 16.7% of this feed is converted into shrimp biomass. The rest is converted into pollution, which deteriorates water quality inside the pond and in the ecosystem. It is this build up of pollution that is responsible for collapse of shrimp production in a short period and for the destruction of the productivity of estuarine and coastal waters. Industrial shrimp (prawn) farming is by its very nature non-sustainable. Intensive farming collapses in 5 years, semi-intensive farming collapses in 15 years and extensive farming collapses in 25 years. On the other hand traditional polyculture systems which work with nature’s cycles are perennial. Marine fisheries is destroyed in three ways by industrial shrimp farms: a) Wild fry is the major source of seed in shrimp farms. For every single fry of commercially desirable P. Monodon caught, more than 1000 other marine species are wasted as "fry by catch" leading to species loss and extinction. b) Fish caught at sea is a major source of shrimp feed. Each ton of industrial shrimp requires 10 times its weight in marine fish for conversion to feed. c) The pollution from shrimp farms also kills fish life and destroys marine resources. The argument used to justify the large scale destruction by the shrimp industry is the dollar earning that it brings to the shrimp industry even though it is made to appear that the private profits of the industry are an increase in national wealth. However, behind every dollar of earnings by the shrimp industry, there is 200 dollar worth of damage of local ecology and local economy if the ecological footprint of industrially produced shrimp is taken into account. The ecological footprint of a productive system is the productive ecosystem required to supply inputs to the production and to assimilate waste outputs from the production cycle. Entry 1 M2 of an industrial shrimp farm can require upto 200 M2 of marine and coastal ecosystems for input supply of shrimp seed and water and for sinks for waste and pollution. The destruction of coastal ecosystems leads to the destruction of coastal livelihoods. It is in recognition of this fact that the Supreme Court ordered closure of the shrimp factories within the coastal zone in order to protect the fundamental right to life that is guaranteed under the Constitution. It is this freedom as the right to life of the people which is being denied by the shrimp industry’s right to profit and which was being defended by the coastal communities in their celebration of theirs and India's freedom.

Freedom from Corruption

The shrimp industry is a breeding ground for ecological as well as political pollution which is known as corruption. While Multinational Corporations are the driving force in the shrimp feed industry and in the shrimp trade, our politicians and bureaucrats are also involved. The shrimp scam -- the involvy Bill (AAB) was rushed through Rajya Sabha. Through the AAB, the politicians are using the structures of democratic India meant to protect the people as instruments for their own power and accumulation and as an assault on the fundamental rights and civil liberties of the coastal people. Chief Ministers of every coastal state have interests in it. MPs, MLAs, bureaucrats are involved. The Finance Minister himself is supposed to be involved in the shrimp industry. Meghna farm in Shrikali in Tamil Nadu is reported to be owned by his brother-in-law. It is also reported that the Finance Minister himself has a shrimp farm in Ramnathpuram to establish which he cut down 5,000 coconut trees. The Prime Minister had stated in his Quit India celebration speech, that those who hold high offices and are corrupt are anti-national and traitors. In his Independence Day speech from the Red Fort, he stated,

Anyone with any proof of corruption against any of my cabinet member can come to me and action will be taken without reservation.

During the Golden Jubilee year of India’s Independence we would like the Prime Minister to establish his commitment to wipe out corruption by taking action against the "traitors" involved in the shrimp scam. We would like the Prime Minister to not participate in the nurturing and protection of corruption by letting his cabinet undermine the Supreme Court judgement by bringing the AAB to Lok Sabha. Corruption is not just a matter of bribes. It is the institutionalised loot of the resources of the poor by those in power. Let the Prime Minister begin the cleaning up of corruption in his government by investigating the shrimp scam and by implementing the Supreme Court judgement. Attempts of subversion of the Supreme Court order through the AAB and the review petitions are a subversion of our justice system and our democratic fabric. Freedom is the defense of our democratic structures. The people are defending these structures while those in power are attempting to destroy them. Freedom from fear of Mafia rule Since the aqua industry has been established by violating every law of the land and by trampling on the rights of local communities, it continues to operate only through the rule of terror and violence. While each farm creates only employment for 2 people per hectare in the productive activity, there is a major "employment generation" through the need for private securities and private armies to defend the the shrimp factories from the people whose water, land and biodiversity is being destroyed and who are rising in revolt. An attempt is being made to contain the local agitations through money power and muscle power. Inspite of threats from the shrimp mafia, coastal people took out their freedom marches on 15th August even in the hot land of the mafia rule. People are showing that they are fearless because they are engaged in a just struggle to defend their lives. Fifty years after independence the challenge is to protect the freedoms we gained half a century ago, and to expand and deepen the meaning of freedom beyond our fifty years legacy so that it becomes a reality for the eighty per cent of India which has been marginalised by the five development decades and which is being rendered dispensable by the new economic policies of trade liberalisation and globalisation. The shrimp industry is a child of these "reforms" which are based on turning the "licence-permit raj" into the "licence to loot and the permit to plunder raj". Our Finance Minister, Shri Chidambaram is said to have said,

So, to those of you who wish to come to India, I say, come and stay there for a long time... the last time you came to India to take a look, you stayed 200 years. So, this time if you come, you must be prepared to stay for another 200 years. That is where the largest rewards are...

While the Finance Minister in whose hands the country has trusted its economic planning is inviting invaders to loot and recolonise us, he is also personally looting the resources of the poor coastal communities while maintaining the image of "Mr. Clean". Today, India seeks her freedom not just from the foreign powers who are attempting once again to colonise her. She seeks freedom from the political class which is dismembering her ecologically and socially. And this new freedom struggle for a free India is appropriately beginning in her social and environmental margins -- from the coasts, led by women, the traditional fishworkers and the landless or small peasants. The rebirth of a free India is taking place amidst the brutalisation and debasement of murders, abductions, caste and communal wars, political corruption and criminalisation of politics and the destruction of the natural and economic wealth of the people. In the margins, a new India is getting born-- an India built on the principles of sustainability and justice, of peace and harmony of democracy and diversity. The freedom from the margins, the freedom of the marginalised, will be India’s real search for freedom. This second freedom struggle has just begun.

The Myth Of Foreign Investment Benefits By Jayati Ghosh.

2007-06-22T05:28:00.000-07:00

Governments with over-optimistic expectations from foreign direct investment should be aware that it does not necessarily increase employment and can have negative effects on a fragile economy.

ONE of the myths that appears to be indestructible, despite growing evidence to the contrary, is that of the generally positive and desirable nature of foreign direct investment (FDI). It is certainly seen as being preferable to other forms of foreign capital inflow, such as commercial borrowing and portfolio investment. Furthermore, it is considered to be eminently advantageous in its own terms, and something to be actively sought by governments of developing countries. In fact, access to more FDI is now touted as one of the major benefits of the recent economic globalisation, which is supposed to outweigh its many negative effects.

In India, this perception has, if anything, intensified in recent times. Witness the Budget speech of the Finance Minister, in which he announced a reduction on corporate tax paid by foreign companies from 48 per cent to 40 per cent, despite the shocking shortfalls in tax collection in the current year. This concession was explicitly declared to be a means of wooing more FDI into the economy.

Of course, one can quarrel with the Finance Minister's (false) notion that tax concessions will work to attract more FDI into a stagnating economy. But the more fundamental mistake is to assume that it is necessary to attract FDI in whatever form into the economy, and that this justifies tax and other concessions.

An important book by David Woodward (The next crisis? Direct and Equity Investment in Developing Countries; Zed Books, London and New York, 2001) shows just how problematic such an assumption can be. Woodward's book contains a penetrating and occasionally startling analysis that lays bare in a succinct way many of the current myths about FDI.

To start with, Woodward reveals how little we actually know about even the extent of FDI, and especially stocks of FDI, in different countries. It emerges that official data - including those produced by the International Monetary Fund (IMF) and the World Bank - almost certainly underestimate to a substantial extent, the true value of inward FDI stocks and their absolute rate of increase. Far from trying to improve this state of affairs, the Fund and the Bank have promoted the liberalisation of foreign investment regimes, which actually tends to reduce the availability of data and even the possibility of collecting it.

This matters not only because it is useful for a host country to know the exact stocks of inward FDI, but because inadequate assessment of their extent may lead to policy misjudgment and failure to anticipate potential crises. As Woodward points out, the lack of information on the extent of external liabilities contributed to the external debt crisis of the 1980s, and a similar process may be under way with respect to private investment today. Moreover, since FDI is not unambiguously positive, such lack of knowledge of the extent of inward FDI stocks can even be dangerous in other ways.

Consider, for example, the foreign exchange effects of FDI, which are often simplistically assumed to be positive. In actual fact, the foreign exchange effects are much more negative than what emerges from an idealised view of FDI. Woodward shows that positive effects arise only where new productive capacity is created in the export sector, or in very strongly import-substituting sectors. If FDI takes the form of purchase of existing capacity, even in the export sector it will have a negative foreign exchange effect even if export production goes up, unless the productivity of capital increases enough to offset the other increased foreign exchange costs. At lower levels of import substitution, the effects of "greenfield" FDI on new capacity are much more ambiguous, and may be negative.

Similarly, Woodward indicates how misleading it may be to assume that FDI necessarily contributes to increased employment. In fact, the employment effect will depend on a whole range of variables, including the balance between greenfield FDI and the purchase of existing assets; the labour intensity of new productive capacities or new organisational techniques; the extent to which FDI-based production substitutes for existing production and their relative labour intensities, and so on. In general, therefore, it is not the case that FDI creates much more net employment unless it is really very large in scale and heavily involved in greenfield activities, and even in such cases it need not be more employment-intensive.

Large-scale flows of FDI also have effects on other domestic economic policies. To begin with, reliance on such flows imposes severe constraints on domestic government policy because of the fear of withdrawal, and of course the potential impact of disinvestment increases as the FDI stock grows. Further, FDI is embodied in the presence of multinational corporations (MNCs) which tend to be large and powerful lobbies in the matter of domestic policies.

And then, of course, the very competition to attract more FDI by governments with over-optimistic expectations regarding such investment, means that all sorts of concessions are offered, which may turn out to be very expensive for the economy in the medium or long term. Woodward suggests that such FDI promotion tends to focus heavily on the demand side, in terms of requirements imposed on host countries which involve changing their own policies in order to make themselves more attractive. Such unilateral concessions are increasingly sought to be entrenched through international agreements.

Another interesting point that Woodward makes is that much of the over-optimism surrounding foreign investment stems from a tendency to look at the host country in isolation from the developing world as a whole. But in fact there are strong negative spillover effects on other developing countries, which may outweigh whatever limited gains actually do accrue to the host country.

Woodward analyses the 1990s boom in FDI to developing countries, to conclude that it has the elements of a temporary surge similar to those affecting the market for equity (or portfolio) investment. While deregulation of foreign investment across the developing world has played a role, this has probably been less significant than the large-scale privatisation programmes, which have been a major source of both FDI and portfolio investment, and the debt-equity conversions, which were especially common in Latin America. Further, some flight capital may re-enter the country as FDI - some estimates suggest that this has been significant, for example, in China.

All these are clearly short-lived, or temporary forces. Even the globalisation of production can be seen as a finite conversion process, albeit one which is more prolonged and complex. But it is important to note that all these features make FDI, along with portfolio investment, strongly pro-cyclical in nature.

Even worse, FDI can contribute to the underlying fragility of an economy and make it more susceptible to balance of payments crises. Woodward considers several ways in which this can happen. First, as rapidly growing stocks of inward FDI generate similarly growing profits that form part of the foreign exchange outflow. Secondly, when FDI fuels an increase in imports, such as capital goods for investment projects and other such payments. Thirdly, because current foreign exchange costs of MNCs typically exceed the foreign exchange they tend to earn through exports of import substitution. Fourthly, through the role played by foreign affiliates, including those involved in retailing, in changing patterns of consumption through advertising and brand promotion.

For these and other reasons, FDI can contribute to large current account deficits, which tend to precede financial crises. They can also add to both the economic shocks preceding crises and to the process of contagion. Woodward provides examples of a number of East Asian economies and of Mexico prior to their respective financial crises. He does not mention Argentina, whose major crisis broke after this book was published, but it provides an even more classic example of his argument.

The "fire-sale" of domestic productive assets to foreign companies, which often accompanies attempts to come out of such financial crisis, may initially limit the reduction of FDI to the affected countries, as indeed happened in South Korea. But this occurs at a high long-term cost, in terms of the build-up of more FDI stock and further adverse balance of payments effects.

Once again, the case of Argentina over the past two decades provides a stark, if telling, example - indeed, it is almost as if this script were written for Argentina, in terms of the pattern of sale of public assets to foreign multinational companies in the early 1990s, followed by very adverse balance of payments effects which contributed in turn to the external debt build-up, which then precipitated the most recent crisis.

This more pessimistic - and more realistic - view of the impact of FDI provides a very different angle on the substantial and rapidly increasing stocks of inward FDI in a number of developing countries. Far from being a source of celebration, it may in fact be, as Woodward describes it, "an accident waiting to happen". The latest round of crises in emerging markets has perversely operated to strengthen both the positive attitude to FDI and efforts to promote it. But in the new climate, in which developing country markets are seen as riskier and international investors are becoming more risk-averse, efforts to attract more FDI will involve even more concessions on the terms of such investment. "The result will be to accelerate the build-up of liabilities without a commensurate effect on the now seriously limited capacity of national economies to bear them" (page 207) .

In fact, such a crisis appears to be almost inevitable, since any serious efforts to prevent it would require both a change in attitudes to foreign capital and a change in political structures. As Woodward says, "Only when governments represent the interests of their populations and both their business communities, and have (international) political influence proportional to the populations they represent, can we realistically expect to achieve an international financial and economic system which will genuinely serve the interests of people, and not of transnational companies" (page 215).

Until then, it looks as if the world will have to brace itself for the next round of financial crises, this time probably emanating from the balance of payments problems caused by the current adulation of FDI. And we in India will have to bear with further concessions to multinational investment that may not be in our long-term interest, even if such investment does choose to come into the country

Is Wal-Mart what the Doctor Prescribes? By Mohan Guruswamy.

2007-06-22T04:57:00.000-07:00

That the Prime Minister of India met Mr. John Menzer, President of Wal-Mart has once again kindled a frenzy of excitement in the pink papers and in the business pages of their white siblings. Not since Kenneth Lay and Rebecca Mark came calling to sell us Enron's plans to lead India out of darkness have we seen such excitement. Enron was a classic con job and what is worrying is that the same people who sold Enron so hard are hard at it selling Wal-Mart. We can be sure that Wal-Mart is no Enron leading us up the garden path. It is a much-respected company whose worldwide sales exceed US$ 255 billion. It is the corporation that has transformed how America shops by giving the average American value for money. Its contribution to the American way of life cannot be any less than that of GM or IBM.

But is Wal-Mart what the good doctor would prescribe for us given our present health condition? Very simply it is all about jobs. Unlike FDI in manufacturing or IT or financial services, all of which create jobs, FDI in retail would entail job losses on a massive scale. The profile of India's retail sector with its overwhelming preponderance of small and self employed retailers is a direct consequence of our inability to provide gainful employment to the millions who join the workforce each year. At last count these numbered about 45 million. These are not just "mom and pop" businesses such as the neighborhood Kirana shop. For every one of them there are dozens of handcart and pavement vendors with little more than a pile of vegetables or fruits as their investment for survival. Food produce accounts for over 14% of all retail trade and most of our small retailers are employed in this sub segment. It is important to remember that most of them are in this business out of necessity and not by choice.

Mr. Menzer himself gave India a fine demonstration of how Wal-Mart gave America value for its money at the lunch for journalists hosted by the US Embassy on May 12, shortly after his happy meeting with Dr.Manmohan Singh. He waved his little black wallet at everyone saying: "We sell this piece, sourced from India, at $17 a piece in the US. Our competitor sells it for $70." Now that is still value for money, considering that Wal-Mart in all probability would have bought that wallet for not more than the equivalent $3. No wonder its consistently big bottom-lines had made its founder Sam Walton the richest man in the world and Warren Buffet its most happy investor. In its quest to give India too value for its money, Wal-Mart will no doubt scour the manufacturing centres of the world and give the Indian consumer goods that are value for money. Right now this means lots of Chinese goods. One must wonder what this will do to our manufacturers of consumer goods?

Wal-Mart is the USA's largest corporation and one of its most profitable. It has been good for America. Wal-Mart is in the business of making profits and it seeks to enter India in search of profits. Unfortunately there are many in this country, and some of them holding high office, who believe that Wal-Mart is carrying a cure for our economic woes. In the last few days it has been argued as to how Wal-Mart, which has 45 stores in China, out sources US$ 20 billion of merchandise from China. By contrast Wal-Mart, they woefully state, only imports only US$ 1 billion of merchandise from India and all Wal-Mart has is a procurement office in Bangalore.

But it is not as if the quantum of Wal-Mart imports are related to the number of stores. Wouldn't Wal-Mart keep importing from China even if it didn't have a single store there? China's exports amount to almost US$ 450 billion whereas India's exports are in the vicinity of US$ 55 billion. This is so because Chinese goods are manufactured to be extremely competitive in terms of price and quality. It is because of this fact, even if China did not have a single Wal-Mart, Wal-Mart would keep importing what it presently does from China. Just as it does what it does from India.

So we must discard this notion that the presence of Wal-Mart stores in India will result in more exports to Wal-Mart in the USA. For that India will have to become a much better and more efficient manufacturer of goods. All kinds of goods. China today is the world's leading exporter of cellular phones, digital cameras, computers, toys and what have you. India leads in H1B visas to the USA. No wonder the Chinese Ambassador in India is able to pithily observe that while India is the office of the world, China is the factory of the world!

How one wishes that people like Dr.Manmohan Singh spent a little more time thinking about how to make India an efficient producer of high value added goods like China has become, rather than on meeting every businessman who wants to set up shop in India. And when was the last time that Dr. Manmohan Singh met representatives of Indian farmers or small retailers or small-scale industry or handloom weavers or construction workers or anybody apart from the representatives of big business like the CII or FICCI?

Now to many of our opinion leaders having the Wal-Mart marquee adorn our urban landscape might be very important. It might even make them feel more at home here? Others might argue that it is the way of the future, while some others can justifiably argue that it will bring better management practices and new technology to shape up our agri-commodity business. One cannot but be skeptical of the argument that Wal-Mart and the likes will give India a cold chain from farm to home, a modern and efficient transportation system that will haul the cauliflower from Betul in Central India to the dinner tables in the big cities.

Assuming that all this happens, and then what will we do about the tens of millions who will become redundant? But if having a handful Wal-Mart's or Tesco's is just another totem of globalization that we must install, like the golden arches of MacDonald's, lets have them. But lets also make sure that they just don't become a conduit for foreign goods. This is important for a company like Wal-Mart will facilitate the entry of foreign goods by eliminating the multiple tiers of the traditional distribution channels in India. This can be easily achieved by insisting that they be foreign exchange neutral, say, for the first ten years.

The Commerce Minister ought to know that we still post a huge trade deficit each year. The only reason we have a reasonable good current account situation is because of "invisibles", which is what we call the remittances sent home by the millions who have been forced overseas by the paucity of jobs in India. The term "Invisibles" is full of irony as it is most appropriate for the remittances of invisible people of India who made it good abroad. But what about the invisible people who are still stranded here?

FDI in Retailing: More Bad than Good By Mohan Guruswamy.

2007-06-22T03:37:00.000-07:00

The retail industry in India is of late often being hailed as one of the sunrise sectors in the economy. AT Kearney, the well-known international management consultancy, recently identified India as the 'second most attractive retail destination' from among thirty emergent markets. It has made India the cause of a good deal of excitement and the cynosure of many foreign eyes. With a contribution of 14% to the national GDP and employing 7% of the total workforce or 42 million (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy. Not only is it the largest component of the services sector it is also double the size of the next largest broad economic activity in the services sector.

The retail industry is divided into organized and unorganized sectors. Organized retailing refers to businesses employing more than ten persons and includes the corporate-backed hypermarkets and retail chains. The organized sector accounts for just 2% of the trade and employs just 5 lakh persons. Unorganized retailing refers to the traditional formats of low-cost retailing such as the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, handcart and pavement vendors, etc and employs over 4 crore persons. Obviously India's retail sector is highly fragmented, with about 11 million outlets operating in the country and only 4% of them being larger than 500 square feet in size. Its greatest contribution is that it is labour intensive. Compare this with an employment of just 0.9 million in the US, yet doing a business more than 13 times of the Indian retail market size.

Estimates vary widely about the true size of the retail business in India. AT Kearney estimated it to be Rs. 4,00,000 crores and poised to double in 2005. On the other hand, if one used the Government's figures the retail trade in 2002-03 amounted to Rs. 3,82,000 crores. One thing all consultants are agreed upon is that the total size of the corporate owned retail business was Rs. 15,000 crores in 1999 and poised to grow to Rs.35, 000 crores by 2005 and keep growing at a rate of 40% per annum.

A simple glance at the employment numbers is enough to paint a good picture of the relative sizes of these two forms of trade in India - organized trade employs roughly 5 lakh people, whereas the unorganized retail trade employs nearly 3.95 crores! According to a GoI study the number of workers in retail trade in 1998 was almost 175 lakhs. Given the recent numbers indicated by other studies, this is only indicative of the magnitude of expansion the retail trade is experiencing, both due to economic expansion as well as the 'jobless growth' that we have seen in the past decade. That about 4% of India's population is in the retail trade says a lot about how vital this business is to the socio-economic equilibrium in India.

Food sales estimated to be 60% of all retail is a very large segment of the total economic activity of our country and due to its vast employment potential, it deserves very special focused attention. Efficiency enhancements and increase in the food retail sales activity would have a cascading effect on employment and economic activity in the rural areas for the marginalized workers. Thus even without FDI driving it, the corporate owned sector is expanding at a furious rate. The question then that arises is that since there is obviously no dearth of indigenous capital, what is the need for FDI? It is not that retailing in India is in the need of any technology special to foreign chains.

But a report prepared by McKinsey & Company and the Confederation of Indian Industry (CII) predicted that global retail giants such as Tesco, Kingfisher, Carrefour and Ahold were waiting in the wings to enter the retail arena. This report also states that the Indian retail market holds the potential of becoming a $300 billion per year market by 2010, provided the sector is opened up significantly. It does not talk about creating additional jobs however, which should be the prime concern of the policy maker.

One of the principal reasons behind the explosion of retail and its fragmented nature in the country is the fact that retailing is probably the primary form of disguised unemployment/underemployment in the country. Given the already over-crowded agriculture sector, and the stagnating manufacturing sector, and the hard nature and relatively low wages of jobs in both, many million Indians are virtually forced into the services sector. Here, given the lack of opportunities, it is almost a natural decision for an individual to set up a small shop or store, depending on his or her means and capital. And thus, a retailer is born, seemingly out of circumstance rather than choice. This phenomenon quite aptly explains the millions of kirana shops and small stores. The explosion of retail outlets in the more busy streets of Indian villages and towns is a visible testimony of this. The presence of more than one retailer for every hundred persons is indicative of the lack of economic opportunities that is forcing people into this form of self-employment, even though much of it is marginal. Because of this fragmentation, the Indian retail sector typically suffers from limited access to capital, labour and real estate options.

As on January 1st of this year, there were 413.88 lakhs job seekers registered at the Employment Exchange. They register at the exchange, to enjoy the benefits and security that a job in the organized sector provides - lifetime employment, pension, and union membership etc. But over the period 1992-93 to 2001-02, only a total of 30,000 jobs have been added in the organized sector in the whole country.

Since jobs are so hard to come by retailing with low capital and infrastructure needs is by far the easiest business to enter, and as such performs a vital function in the economy as an alternative social security net for the unemployed. India, being a free and democratic country, provides its people with this cushion of being able to make a living for oneself through self-employment, as opposed to say China, where the society is highly regulated. In this light, one could brand this sector as one of "forced employment", where the retailer is pushed into it purely because of the paucity of opportunities in other sectors.

Last year the largest retailer in the world 'Wal-Mart' has a turnover of $ 256 bn. and is growing annually at an average of 12-13%. Its net profit was $9 bn. It had 4806 stores employing 1.4 mn persons. Of these 1355 were outside the USA. The average size of a Wal-mart is 85,000 sq.ft and the average turnover of a store was about $ 51 mn. The turnover per employee averaged $ 175,000. In 2004 Wal-Mart had a 9% return on assets and 21% return on equity. By contrast the average Indian retailer's turnover is just Rs. 186,000 and fewer than 4% have shops larger than 500 sq.ft.

Let alone the average Indian retailer in the unorganized sector, no Indian retailer in the organized sector will be able to meet the onslaught from a firm such as Wal-Mart - when it comes. With its incredibly deep pockets Wal-Mart will be able to sustain losses for many years till its immediate competition is wiped out. This is a normal predatory strategy used by large players to drive out small and dispersed competition. This entails job losses by the millions.

India has 35 towns each with a population over 1 million. If Wal-Mart were to open an average Wal-Mart store in each of these cities and they reached the average Wal-Mart performance per store - we are looking at a turnover of over Rs. 80,330 mn with only 935 employees. Extrapolating this with the average trend in India, it would mean displacing about 4,32,000 persons. If large FDI driven retailers were to take 20% of the retail trade, as the now somewhat hard-pressed Hindustan Lever Limited anxiously anticipates, this would mean a turnover of Rs.800 billion on today's basis. This would mean an employment of just 43,540 persons displacing nearly eight million persons employed in the unorganized retail sector.

With possible implications of this magnitude, a great deal of prudence should go into policymaking. Rather we seem to moving towards a policy steamrolled obviously by vested interests acting in concert with the CII & FICCI. In this context we must be concerned about the statement the Finance Minister, Mr. P. Chidambaram, made while making the mid year review for 2004-05. On retail, the review noted that creating an effective supply chain from the producer to the consumer is critical for development of many sectors, particularly processed and semi-processed agro-products. In this context, it says, the role that could be played by organized retail chains, including international ones merits careful attention. Indeed a hard look is called for, but not just through Mr. Chidambaram's eyes.

FDI in Retail: A Question of Jobs, Not Ownership By Kamal Sharma and Jeevan Prakash Mohanty.

2007-06-22T03:16:00.000-07:00

AFTER farming, retailing is India's major occupation. It employs 40 million people. A sizeable majority of owner/employees are in the business because of lack of other opportunities. The decade of liberalisation has so far been one of jobless growth. It is no wonder that retail has become the refuge of these millions. Lopsided economic development is transforming India from an agrarian economy directly to a service oriented post-industrial society.

In the Indian perspective, any policy that creates jobs is good policy. Any industry, Indian- or foreign-owned, that generates employment is welcome. The question over foreign direct investment (FDI) in retail is not as much about ownership as about jobs.

The Indian retail industry is highly fragmented. According to AC Nielsen and KSA Technopak, India has the highest shop density in the world. In 2001, it was estimated that there were 11 outlets for every 1000 people. Since the agriculture sector is over-crowded and the manufacturing sector stagnant, millions of young Indians are virtually forced into the service sector. The presence of more than one retailer for every hundred persons is indicative of how many people are being forced into this form of self-employment, despite limitations of capital and space.

Trade/retailing is the single largest component of the services sector in terms of contribution to the gross domestic product. It accounts for 14 per cent of the service sector, i.e., twice that of the next largest economic activity in the sector — banking and insurance. The total number of retail outlets (both food and non-food) was 8.5 million in 1996 and 12 million in 2003, a 41 per cent rise.

The CSO's employment numbers give a comprehensive picture of the importance of this form of livelihood in India. Organised retail trade employs roughly 0.5 million people and unorganised 39.5 million. The fact that about 4 per cent of the population is employed in the unorganised retail trade speaks volumes about how vital this business is to the socio-economic equilibrium in India.

In 2004, Wal-Mart had a turnover of $256 billion and it recorded a net profit of $9 billion. Its 4,806 stores employs 1.4 million persons. The average size of a Wal-Mart outlet is 85,000 square feet and the average turnover about $53 million. The turnover per employee is $1,82,000.

By contrast, the Indian retailer had a turnover of Rs 1,86,075 ($4,100 approximately) and only 4 per cent of the 12 million retail outlets occupied space larger than 500 square feet. The total turnover of the unorganised retail sector, which employs 39.5 million persons, was Rs 735,000 crore. India has 35 towns each with a population of over one million. If Wal-Mart were to open, on an average, one store in each of these 35 cities and if each achieved the average Wal-Mart performance per store, the turnover would amount to over Rs 8,033 crore and number of employees to only 10,195.

Extrapolated to the rest of the country, it would mean displacing around 4,32,000 persons. In other words, every new Wal-Mart employee will render 40 retailers surplus. If FDI retailers with deep pockets were to take over 20 per cent of the retail trade, this would mean a turnover of Rs 1,47,000 crore. This represents an employment of about 43,000 persons, displacing nearly eight million persons in the unorganised retail sector.

The most important argument against modern retailing and supply chain integration is that it displaces labour in a labour-surplus society. Till such time that we are in a position to create jobs on a large scale in manufacturing and construction, it would make eminent sense to keep on hold any policy that results in the elimination of jobs in the unorganised retail sector.

The primary task of the government is still providing livelihoods and not create so-called efficiencies of scale by creating redundancies. If we assume 40 million adults in the retail sector, it would translate into around 160 million dependents. Opening the retailing to FDI means dislocating millions from their occupation and pushing vast number of families under the poverty line. The Western concept of efficiency is maximising output while minimising the number of workers involved. This will only increase social tensions in a developing country like India, where tens of millions are still seeking gainful employment. Companies such as Wal-Mart boast about how they give the consumer better value. Not surprisingly, Wal-Mart procured $20 billion worth of goods from China and just $1 billion worth of goods from India. This is simply because China is a better producer of manufactured goods and not because Wal-Mart has stores there.

Consider a chain such as Wal-Mart with a single point of procurement entering India. Since it already procures huge quantities from China, this make for a massive entry point of China's largely state-owned consumer goods industry into the insatiable market made up of the new consuming elite.

It is true that it is in the consumers' best interest to obtain quality goods and services at the lowest possible price. However, this vocal assertion by the chattering class cannot override the responsibility of any government to provide economic security for its vulnerable population. Countries such as China, Malaysia and Thailand, which have opened their retail sector to FDI in the recent past, have been forced to enact new laws to check the horrific expansion of the new foreign malls and hypermarkets.

In a recent Oxfam study, a decade ago coffee producers earned $10 billion from a global market worth $30 billion. Now they receive less than $6 billion in a global market over $60 billion. Large numbers of producers now interact with monopolistic marketing structures and these chains transfer a large and growing proportion of added value away from producers to companies in industrialised countries.

Neither scale nor efficiency has raised the incomes of the coffee producers. The lessons are clear, bulk procurement plays havoc with producer's margins. Enabling legislation and positive regulation is required to expand our industrial sector whose contribution to employment generation and GDP is much lower than that of the services sector.

The percentage contribution of industry to GDP growth in 1992-96 and in 1997-03 was 30.9 per cent and 23.7 per cent respectively, while for China over roughly the same period it was 62.2 per cent and 58.5 per cent.

We need to address issues at home before we inviting problems from abroad. Vocal proponents of FDI need to ponder a bit more about India's true circumstances.

Listen to the Decentralised Voice By Somnath Mukherji

2007-06-22T02:47:00.000-07:00

There are certainly reasons for celebrating the 59 years of India’s existence as a sovereign republic. During the period, the state has become for-development, for-growth, for-industrialisation the only attribute it needs to acquire is for-people, specifically the poor.

Getting a passport has become easier, getting in and out of the airports smoother, driving on the highways faster, setting up industries in special enclaves with tax-holidays easier only the existence of the small farmers seems to be getting harder.State repression in India is happening with such frequency that a new incident emerges before the anniversary of the previous one can be mourned. A pro-development State which is turning increasingly anti-people seems to have become an end in itself.In a period marked by the aggressive advent of neo-liberal marketisation, when economism has become the organising principle of society rather than a more diverse and complex core of human good, the states of the developing world have become foot-soldiers in clearing the way for the advent of the global capital and the accompanying homogenising forces.

In this post-modern role, somewhat reminiscent of the heads of princely states in pre-colonial India, the states at once appear invincible to the masses and vulnerable to the whims of the global capital.

In West Bengal’s recent experience in Singur and Nandigram, the State has vociferously guarded the interest of the Tatas and the Salim Group, while coming down heavily on the people. Sustainability is not built into the logic of the market. In fact, it is antithetical to it, for, sustainability and constant growth of wealth are irreconcilable. Hence, no weight is assigned by the market to the sustainable component of non-corporatised agriculture, let alone the socio-cultural moorings of the people to it. In its commodified state, land begets the highest return on investment from real-estate and development of industries. As the usher of the global market, the State incentivises (read subsidises) powerful corporate interests and sympathises with its compulsions.

Special Economic Zones (SEZs) are enclaves where the obligations of corporations as entities operating in a democratic set-up are diluted: tax holidays, breaks from labour laws, and subsidies on basic utilities such as water and electricity that the rest of the country craves for. How such iniquitous structures can bring about social and distributive justice remains an enigma.

Violence is a necessary component of the development paradigm that we seem to have embarked upon. Incongruous local fabrics have to be ripped up and reset, to be re-stitched into the grid of the global, homogenised mesh where controls are passed to far off centres.

Since the State monopolises on violence, it becomes the most suitable actor to uproot the existing structures. While the violence in Singur was unleashed directly by the police, Nandigram experienced the brunt from the strong bulwark of the State-party nexus. It is this collusion that bolsters the spirits of party leaders such as Benoy Konar to declare brazenly to resort to violence in “self-defence”. The police have always encountered the countryside in general and the marginalised in particular, as a breach of law rather than a citizenry to be protected.

From Nitahari and Muktsar, to Kherlanji and Nandigram, the apathy of the police verges on complicity. The rapidity of the Rapid Action Force (RAF) comes into question in light of the fact that it took them six lives before arriving on site at Nandigram. This is in sharp contrast to the alacrity with which the police arrested Medha Patkar on the morning of 10 January. Can one visualise the police coming to the aid of lungi-clad men in pockmarked vests and bare feet women with veils covering the vermillon in their hair?

By its action in Singur and its inaction in Nandigram the police have articulated its role as an enforcer of the State’s will and not the protector of the masses and the law. All available political space in Bengal has been taken up by the electoral interests in general and the Left Front in particular. In the cacophony of the disorganised Opposition and the well-rehearsed voice of the CPI-M, the diverse and ardent voices of the people and their movements are drowned.

Whether it is against the hanging of Saddam Hussein or the opposition to the land grab in Singur or the eviction of squatters in Dhakuria, opinions are monopolised by the parties and to the rest of the urban elite, it assumes a nuisance value of traffic snarls and lost revenue due to rallies and strikes. Tuning our perceptions to the party voices had deafened us to the voices from the grassroots.

Mapping peoples’ movements and resistance in a framework of party politics amounts to the cooptation and hijacking of their voices. The thunder of an organic people’s resistance like Singur was stolen by Mamata Banerjee’s fasting in Kolkata, while the fasting of several women in Singur went unnoticed. Though there might be tacit support from political parties, organic peoples’ movements will not exhibit any congenital adherence to the political ideologies of the Left-Right spectrum. Singur and Nandigram demonstrate a clear break of social movements from Left politics. In Nandigram, as in Singur, the State has repeatedly pointed fingers at the involvement of the “outsiders” in the form of extreme-Left and extreme-Right elements in fomenting trouble, with the aim of delegitimising and discrediting a genuine people’s resistance.

Even if there were some truth to the allegations, these rural communities are not centres of passivity bereft of inherent intelligence, waiting to be instigated and mobilised by external forces. The pre-dominance of women in both the resistance in Singur and Nandigram are indicators of the grounded and local nature of the movements. It is worth noting that, while the farmers’ voices opposing the land grab were expressed in the localities of Singur, their purported demand for rapid industrialisation was heard only at a rally in Brigade Parade Ground in Kolkata.

It is relatively easy to decipher the decentralised local voice of the people from that articulated by the party ~ only if we listened.The resistance in Singur and Nandigram are genuine articulation of the people’s voices ~ an expression of the extraordinary resilience of ordinary people; a rejection of the sub-ordinary solutions by the “extraordinary”elite in power; a subaltern vocalisation that refuses to be captured in the framework of Left-Right politics of power and hence does not register in the minds fed by the media. Such voices are not only legitimate but have historically tempered the totalitarian tendencies of the colonial and post-colonial State.

These vocalised aspirations are not anti-development, backward, stagnant or regressive. Instead, they aspire for change and progress that is contextually sensitive to the culture, society and ecology ~ a development which is not captured by the market calculus of the metropolitan elite. Built into the logic of these developmental aspirations are sustainability, eco-sensitivity, non-violence and a strong desire to maintain diversity, drawn from the bedrock of civilisational values, without the need for centralised institutions and heavy capital and technological inputs. These voices could thrive ~ if only we created space for them. Societies running on the guide-rails of free market and technology can barely be expected to come up with holistic, equitable and non-violent solutions, for, empirical reality spans a much wider spectrum.

Technological solutions for global warming coming out of industrialised nations are merely shifting costs from one sphere to the other ~ from air to land (carbon sequestration), from the “North” to “South” (off-shoring polluting industries), from the visible to invisible (burying toxic waste). Even the effects of these shifts are nullified by the economy of scales. A holistic view of the empirical reality is obscured by an overly specialised knowledge system and a homogenised mental landscape.

Perhaps, the secret to more humanistic models of development would emanate from making space for the articulation of these grassroots aspirations by holding the centralising and homogenising tendencies of the present development paradigm at bay.

Amongst other things, rural and non-consumerist societies maintain an organic link to their past which can at times prove to be a treasure trove for time-tested and evolved ideas. There is no dearth of these voices in India, unfortunately, they get trapped in constant reverberations in the chasms of the rural-urban and the have-have not divides. We could still hear them ~ if only we listened.

. The author is an electrical engineer based in Boston.

Neoliberalism And Primitive Accumulation In India By Pratyush Chandra & Dipankar Basu.

2007-06-22T00:27:00.000-07:00

Recent events in Singur - a town which is less than 40 kms away from Kolkata (Calcutta), where the West Bengal government is struggling to acquire and sell 1000 acres of agricultural land to Tata Motors - indicate the extent to which capitalist-parliamentarianism can regiment a counter-hegemonic force once it agrees to play by the rules. At the least, it clearly shows that the Communist government, which boasts of being the longest-running democratically elected Marxist government in the world, is hopelessly caught in the neoliberal project. And Singur is not an isolated event. In the state of West Bengal alone, the process of state-led land grab and the resultant opposition is already gaining momentum in at least three different locations: (a) in Kharagpur, West Medinipur district, where vast tracts of multi-crop farmland is being taken over for yet another Tata vehicle factory; (b) in Nandigram, East Medinipur district, where a chemical industries hub is proposed to be set up by the Salim group on a 10,000-acre area; and (c) in North Bengal where a Videocon Special Economic Zone (SEZ) is proposed to come up in the near future.

Nor is this story limited to West Bengal. Throughout India, resources are being acquired for Special Economic Zones and numerous other industrial schemes meant to facilitate corporate capital expansion. Since laws permitting this acquisitions were passed an year ago, state governments have notified 267 SEZs, which will require more than a half million hectares of land. Of this, the state has already acquired 137,000 hectares for 67 SEZs while another 80 have `in principle’ been approved.(1) The Government has converted the erstwhile Export Processing Zones located at Kandla and Surat (Gujarat), Cochin (Kerala), Santa Cruz (Mumbai-Maharashtra), Falta (West Bengal), Madras (Tamil Nadu), Visakhapatnam (Andhra Pradesh) and Noida (Uttar Pradesh) into SEZs. In addition, 3 new Special Economic Zones that had been approved for establishment at Indore (Madhya Pradesh), Manikanchan (Salt Lake, Kolkata) and Jaipur have since commenced operations.

In this backdrop, the West Bengal government’s adamant attitude towards land acquisition, despite the popular unrest, shows that the Indian State and its agencies, irrespective of their ideological masks, are working relentlessly to provide the private sector with “an internationally competitive and hassle free environment”. In this note, we wish to conceptualise this political economic process, identifying its different facets and understanding their interlinkages. It is our contention that using the recently re-interpreted Marxist concept of “primitive accumulation” can provide crucial insights in this regard. We wish to demonstrate that current developments in India can be fruitfully understood by employing the notion of primitive accumulation, understood as a constitutive primitive of capitalism, the process which continuously creates and consolidates the capital-relation. Adopting this new perspective might also help in redefining the agenda of struggles and counter-hegemonic politics in the neoliberal context.

Primitive Accumulation: Two Interpretations

As is well known, Marx had brought up the concept of primitive accumulation to try to understand the historical origins of capitalism. It is generally accepted by economic historians that in pre-capitalist modes of production the primary producers (majority of whom were peasants) had ownership of the means of production, most crucial among them being land. If we agree that capitalism is distinguished from these other modes of production by the relationship of a class of propertyless labourers (who have nothing to sell but their labour power) and a class of propertied capitalists (the owners of the means of production) mediated through the market (2), then the following question naturally arises: how did we arrive at the class of propertyless labourers from a class of producers who had the ownership (or at least the right of usage) of the means of production? It is this historical question that Marx sought to answer with the concept of “primitive accumulation”.

In a sense, the answer is already contained in the question. Primitive accumulation is the process by which the producer is divorced from her/his means of production. Since, moreover, land is the primary means of production in pre-capitalist societies, the main focus of primitive accumulation was to separate peasants from the land. While the gradual penetration of market relations had a role to play in this, outright use of force was far more important, and in a sense the key. Only by evicting peasants from their lands and disrupting their livelihood could the development of markets in free labour and land be ensured; and only this could provide the firm basis for the emergence and consolidation of the capital-relation:

“The capital-relation presupposes a complete separation between the workers and the ownership of the conditions for the realization of their labor. As soon as capitalist production stands on its own feet, it not only maintains this separation, but reproduces it on a constantly extending scale. The process, therefore, which creates the capital-relation, can be nothing other than the process which divorces the worker from the ownership of the conditions of his own labor; it is a process which operates two transformations, whereby the social means of subsistence and production are turned into capital, and the immediate producers are turned into wage-laborers. So-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production. It appears as ‘primitive’ because it forms the pre-history of capital, and of the mode of production corresponding to capital.”(3)

It is worth recalling that Marx studied the “enclosure movement” in Britain within this overall perspective. One crucial aspect of primitive accumulation should be noted immediately: it effects a redistribution and transfer of claims to already existing assets and resources, rather than creating any new assets. In this sense, it is an accumulation of intangible rights and not the accumulation of tangible assets or goods. This aspect of primitive accumulation is important for our purposes because the current frenzy of state-assisted acquisition of land and other resources in India is precisely a process whereby rights of access and usage of already existing resources are being redistributed and transferred.

The last decade has witnessed a resurgence of debate around attempts to re-interpret the concept of primitive accumulation.(4) This debate has indicated that there are two distinct but related interpretations of primitive accumulation, one which stresses the temporal aspect and the other which stresses the constitutive or originary aspect. For the first, more traditional, interpretation the primitiveness of primitive accumulation is understood in a purely temporal sense. Primitive accumulation is seen as the historical phase which created the preconditions for the development of capitalism by forcing the separation of workers and means of production. The second interpretation notes that there is both a temporal and a continuity argument in Marx’s account of primitive accumulation. For this interpretation, therefore, the primitiveness of “primitive accumulation” does not arise simply from its location in historical time, relevant only as the initial stage of capitalism; rather, it is the constitutive primitive of the capitalist system, a process that is essential for perpetuating its fundamental class structure - the separation between producers and means of production.

If primitive accumulation is constitutive, then it must arise as a continuous process within capitalism viewed as a global system. Expanded reproduction of the system requires reproduction of the capital-relation at every moment; separation of workers and means of production must be maintained continuously. In its day-to-day functioning, a mature capitalist economy enforces this separation through the market, i.e., by economic means; but at the boundaries (both internal and external), where capitalism encounters other modes of production, property and social relations attuned to those modes and also to the earlier stages of capitalism, other ways of subsistence, primitive accumulation comes into play. More often than not, direct use of force is necessary to effect the separation at the boundaries. And since capitalism, as a global system, continuously encounters other modes of production along with the simultaneity of diverse stages of capitalism in various localities, the constitutive role of primitive accumulation is always in demand. One can probably go so far as to assert that capital accumulation is the extension of primitive accumulation, enforced through the market. In fact, in Volume 3 of Capital, Marx himself calls the concentration and centralisation of capital, which occur during the course of market-induced capital accumulation, as “simply the divorce of the conditions of labour from the producers [which occurs through primitive accumulation] raised to a higher power”(5).

But this does not mean that the two are identical. In fact two differences are especially important to grasp for the development of our overall argument:

(a) “[W]hile accumulation relies primarily on “the silent compulsion of economic relations [which] sets the seal on the domination of the capitalist over the worker,” in the case of primitive accumulation the separation is imposed primarily through “[d]irect extra-economic force” (Marx 1867: 899-900), such as the state (Marx 1867: 900), particular sections of social classes (Marx 1867: 879), etc. We can say therefore that primitive accumulation for Marx is a social process instigated by some social actor (the state, particular social classes, etc.) aimed at the people who have some form of direct access to the means of production. This social process often takes the form of a strategy that aims to separate them from the means of production.”(6)

(b) “As opposed to accumulation proper, what may be called primitive accumulation… is the historical basis, instead of the historical result, of specifically capitalist production’ (Marx 1867: 775). While sharing the same principle - separation - the two concepts point at two different conditions of existence. The latter implies the ex novo production of the separation, while the former implies the reproduction - on a greater scale - of the same separation.”(7)

Keeping these differences are important because one comes to the rescue of the other when market processes falter. Since capital accumulation operates through the market, the services of primitive accumulation are required almost by definition when the market is in crisis. During crucial phases of capitalist crisis, primitive accumulation emerges to help transcend barriers to accumulation in two ways: (a) by facilitating the transition from the critically fated regime to a new regime of accumulation, and (b) by continuously negotiating the spatial expansion (both internal and external) of capitalism. During periods of transition and expansion, “new enclosures” are required for putting the normal course of capitalist reproduction back on track. Securing these enclosures through force and other “direct extra-economic means” is the function of primitive accumulation. This re-definition allows us to grasp the function of the State and its continuous politico-legal activism in every stage of capitalism.

The present neoliberal phase can probably be understood fruitfully from this perspective. Despite the talk of separating the political from the economic, which is a staple rhetoric of the current phase, it is the state as the instrument of politico-legal repression that facilitates neoliberal expansion. Firstly, the state intervenes with all its might to secure control over resources - both natural and human (”new enclosures”) - and secondly, to ensure the non-transgression of the political into the economic, which essentially signifies discounting the politics of labour and the dispossessed from affecting the political economy. David Harvey notes that, “The main substantive achievement of neoliberalization… has been to redistribute, rather than to generate, wealth and income”; the main mechanisms for achieving this is referred to by Harvey as “accumulation by dispossession”, by which he means,

“… the continuation and proliferation of accumulation practices which Marx had treated of as ‘primitive’ or ‘original’ during the rise of capitalism. These include the commodification and privatisation of land and the forceful expulsion of peasant populations…; conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights…; suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neo-colonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes.”(8)

Harvey identifies four main features of “accumulation by dispossession”: privatisation, commodification, financialization and the management-manipulation of assets, each feeding on the other, supported by the other and gaining strength from the other. The neoliberal resurgence since the mid-1970s can be understood as capital’s counter-revolutionary response to the crisis that enwrapped “embedded liberalism” internationally in the late-1960s, with “signs of a serious crisis of capital accumulation…everywhere apparent. Unemployment and inflation were both surging everywhere, ushering in a global phase of ’stagflation’ that lasted throughout much of the 1970s.”(9)

The Politics of Primitive Accumulation in India

What is going on in India today can be understood by employing the concept of primitive accumulation (as understood in the second interpretation) in almost all of the above senses: separating primary producers from land; privatisation of the “public”, conversion of common property resources into marketable commodities, destroying non-market ways of living, etc. To our mind, each of the instances of “displacement” or state-led “land grab” are willy-nilly feeding into the overall process of primitive accumulation in India by divorcing primary producers from the land or restricting direct access to other common property resources like forest, lakes, river, etc. A question crops up immediately. Being a labour-surplus economy, does India need to generate additional labourers, which is an obvious result of primitive accumulation, before absorbing what is already available? Certainly not, if we think from the perspective of labour. But the answer changes if we see the whole process from the perspective of capital. Fresh entrants into the already burgeoning ranks of the proletariat will increase the relative surplus population - floating, latent and stagnant - depressing real wages and thereby increasing the rates of profits on each unit of invested capital. Moreover, one of the major features of the neoliberal regime of accumulation has been the incessant `informalisation’ of the labour process, and further growth of the relative surplus population makes late-capitalist countries like India finely attuned to this. As Jan Breman notes:

“Mobilization of casual labour, hired and fired according to the needs of the moment, and transported for the duration of the job to destinations far distant from the home village, is characteristic of the capitalist regime presently dominating in South Asia.”(10)

Separation of producers from their means of production and subsistence, especially land and other natural resources, also creates markets for these resources; and thus comes into being the various agencies that thrive through hucksterage in these markets. These intermediaries play the crucial role of facilitating and normalising the process of primitive accumulation. Examples abound: Trinamool Congress goons, grassroots-level CPI(M) leadership, local middle classes like school teachers, lawyers, and other similar forces in the Singur case; state-traders, local elites-supported Salwa Judum in Chhatisgarh.

The major target of land acquisition in India today is in areas where either peasant movements have achieved some partial success in dealing with capitalist exploitation and expropriation or areas largely inhabited by the indigenous population whose expropriation could not be increasingly intensified because of the welfarist tenor of the pre-liberalisation regime. West Bengal is the prime example of the former, where Left Front rule congealed due to its constituents’ involvement in the popular movements. Now, the movements’ institutionalisation and incorporation of the leadership into the state apparatus is facilitating the present-day resurgence of primitive accumulation. Examples of the second kind of area could be parts of Chhatisgrah, Orissa, Andhra Pradesh or Madhya Pradesh, which the corporate sector is eyeing for mining activities and for setting up steel plants.

As an instructive example, if nothing else, let us see how displacement in Singur will affect the various class forces on the ground. While the state apparatuses are trying to secure resources for corporate capital, sections of the local elite, including the well-off farmers led by the mainstream non-left political parties - like the Congress and Trinamool (TMC) - have joined the movement against land acquisition essentially to obtain various kinds of concessions, a higher price for giving up the land to the State and perhaps also for increasing the land price for their future real estate speculation around the upcoming industrial belt. For example, “a TMC leader and ex-pradhan of one of the gram panchayats was initially with the movement, but finally gave away his land. Many of the landed gentry, some of them absentee, who own bigger portions of land, depend on ‘kishans’ (i e, hired labours, bargadars, etc) for cultivation of their lands. They principally depend on business or service and have come forward to part with their land in lieu of cash.”(11) In case the government talks to the protesters and gives larger concessions, it is these sections that will benefit the most.

The people who are really the backbone of the movement in Singur are the landless working class and poor peasantry. According to a recent report, “many agricultural workers and marginal peasants will lose their land and livelihoods. Though the State Government has decided to compensate the landowners, no policy has been taken for the landless agricultural workers, unrecorded bargadars and other rural households who are indirectly dependent for their livelihood on land and agricultural activities.”(12) The region is also inhabited by the poor who “frequent the nearby town, being employed in factories, shops and small businesses. Some of the youth have migrated to cities like Mumbai, Delhi and Bangalore, working there principally as goldsmiths or construction workers. There were several cases of reverse migration when people came back to their village after the closing down of the industries where they were working or finding it more profitable to work on the land than to work in petty industries or businesses, drawing a paltry sum in lieu of hard labour.”(13) For this population as also for the landless workers and marginal peasants, the Singur struggles are existential ones.

As an example of the second kind of land acquisition, we can turn our attention to Chhatisgarh. A report on recent developments in Chhatisgarh notes that, in India,

“tribal lands are the most sought after resources now. Whether it is in Orissa or Chhattisgarh or Andhra Pradesh, if there is a patch of tribal land there is an attempt to acquire it. It is no geographical coincidence that tribal lands are forested, rich with mineral resources (80 per cent of India’s minerals and 70 per cent of forests are within tribal areas) and also the site of a sizeable slice of industrial growth. The tribal districts of Chhattisgarh, Orissa, Jharkhand, Karnataka and Maharashtra are the destination of us $85 billion of promised investments, mostly in steel and iron plants, and mining projects. Ironically, these lucrative resources are of no benefit to the local people: an estimate of 10 Naxal-affected states shows that they contribute 51.6 per cent of India’s GDP and have 58 per cent of the population. As with Chhatisgarh, all these states have a strong Naxal presence and are witness to movements against land acquisition. The state governments say these protests are Naxal-inspired. Local people say, however, that all they are trying to do is protect their land, forests and livelihood.”(14)

Here the State’s mode of facilitating primitive accumulation is by raising mercenaries, the Salwa Judum. This extra-legal use of force is supported by the traditional exploiters of the indigenous population - traders, usurers, civil servants and tribal neo-elites, who have functioned as intermediaries in the regime of commerce-based surplus extraction. On the one hand, absence of any recognised land rights of tribal communities, has allowed the State to use principles of terra nullius and eminent domain to expropriate them. On the other, these communities have continued to exist in defiance of all these legalities. However, with the recent intensification of efforts to secure resources for corporate profiteering, along with the continued presence of primitive extractive modes of exploitation, these communities have been left with no real choices but to arm themselves for securing their unrecognised rights. Hence,

“Most tribal people living in forests are officially ‘encroachers’. They live under the constant threat of being alienated from their land and livelihood. While the government completely failed to reach out to them, the Naxals succeeded in connecting to sections of the people. They spread to the state’s 11 districts (200 districts in the country). Unable to contain them, government supported the creation of a civilian militia - Salwa Judum”.(15)

Besides these widely discussed cases of recent land acquisition and displacement, there have been numerous conflicts around the rights over water resources over the years. In almost all such cases, the state has come forth as being hell bent upon the construction of big dams and other hydroelectric projects despite all evidence of the net negative marginal costs of these projects. During the past two decades, Narmada Bachao Andolan has been a prominent force constantly exposing the anti-people, anti-environment character of these projects. Even in the Himalayan region of Uttaranchal (site of the legendary Chipko Andolan), riverbeds and surrounding lands have been ‘enclosed’ for private capital to be used for power generation and lucrative tourism projects. In fact, recent politics in this region cannot be fully understood without understanding the conflicts around these enclosures. Closer to urban India has been the neoliberal systematisation of commercial and financial centres, the `clearing’ of slums, in cities like Delhi and Mumbai, which have naturally been the hotbed of the politics of and against “new enclosures”.

Understanding all these diverse processes in the framework of primitive accumulation has several strategic implications. Perhaps, most urgently, this can provide a unified framework to locate the numerous struggles going on in the country right from the `new’ social movements, like landless workers movements, Narmada Bachao Andolan and other local mobilisations of ‘development-victims’, to anti-privatisation movements of public sector workers, all the way to the revolutionary movements led by the Maoists. This unified framework can then possibly facilitate dialogue among these movements, something that is more than essential at this juncture if the movement of labour against capital is to be strengthened.

A Future Beyond Capital

Using this framework will also mean re-evaluating many of the theoretical positions that are currently in use. For example, it will be necessary to rethink the classical communist position that characterises the Indian state as semi-feudal and semi-colonial, and thereby sees the struggle of the peasantry as being directed primarily against feudal oppression. It is possible that the inherent limitations of this ideological framework disallow revolutionaries and other radicals to formulate effective strategies against the whole system, a system that preserves various vestigial forms to facilitate accumulation but is not defined by them. Thus, movements struggling against different forms of these vestiges are easily localised, regionalised, marginalized, dispersed, and even utilised in the intra-ruling class competition and conflicts. The state of the official Indian left is illustrative in this regard. It, too, stresses on the presence of “vestiges” and the insufficiency of development, but then turns around and justifies its accommodation in the neoliberal capitalist project as a fight against these vestiges!

Despite the apparent popularity of the new movements of Latin America among the official Left in India, their attachment to a schematic notion of national capitalist development retains all its strength. The devastating consequence, of course, is the deferral of the revolutionary moment till that development is attained; in reality, this amounts to postponing the revolutionary moment beyond the horizon of all concrete possibilities. Surely, this is not simply an ideological problem coming from a faulty understanding of the dynamics of capitalism or socialism. It is a consequence of the official left leadership’s accommodation in the capitalist-parliamentary framework, an accommodation moreover that forces them to participate in the competitive race for representation. In the pursuit of presenting itself as the legitimate representative of the “plurality of opinions”, which parliamentary politics poses against the notion of class struggle, the left reproduces this plurality within itself, along with its built-in hierarchy. With partial successes in this exercise, representatives of the opinions that count, i.e., the hegemonic class interests, solidify themselves within the party structures. And it is this congealment within the Left Front in West Bengal that leads the “communists” to vocalise neoliberal myths of neutral industrial development, dubbing every protest against its policies as anti-developmental, backward and manipulative. Parallels with the neoliberal demonisation of the transgression of the political into the economic can hardly be missed. Echoing well-heeled mandarins in Delhi, the Left Front government regularly uses the classic threat of capital flight to regiment all protesting voices.

Without comprehending the function of vestiges of earlier modes of production within capitalism or the role of earlier stages of the capitalist mode of production in sustaining capital accumulation, any fundamental challenge to the hegemonic forces in a late capitalist society like India cannot be formulated. It can hardly be denied that, “we suffer not only from the development of capitalist production, but also the incompleteness of that development. Alongside the modern evils, we are oppressed by a whole series of inherited evils, arising from the passive survival of archaic and outmoded modes of production, with their accompanying train of anachronistic social and political relations. We suffer not only from the living, but from the dead. Le mort saisit le vif [The dead man clutches onto the living]!”(16)

We will have to recognise the fact that during the stage of imperialism, and more so in the present postcolonial situation, “a high level of capitalist development no longer require[s] the elimination of the traditional class of ’small producers’” and other pre-capitalist ‘remnants’.(17) Even in a country like Japan, “in which capitalist society developed only at the so-called finance-capitalist stage of world capitalism, a high level of capitalist development has not been incompatible… with the survival of the traditional class of ’small producers’.”(18)

Indian capitalism, like Japanese, came into being in the stage of imperialism, when finance capital and inter-imperialist rivalries were already subjugating the whole world. Moreover, development under direct colonialism foisted some unique features on to the general characteristics of “late capitalism”. During the colonial period, “self”-expansion of Indian capital beyond the physical horizons of India was implausible because this would have required an Indian State committed to these interests. Colonialism ruled this out almost axiomatically. However, there were other channels available. The simultaneous existence of various socio-economic formations at diverse levels of Indian society allowed some possibility of ‘internal’ colonialism and “enclosures”, thus, providing the basis for capitalist expansion. Even after Independence, Indian capital relies heavily on the ‘diversity’ (or unevenness) of Indian economy and society for primitive accumulation and expansion. Additionally, ’semi-feudal’ conditions at various locations within the country provide a vast reserve army of labour. The important characteristic of this insecure and docile population is that they can be pulled out of their original locations and thrown into the growing labour market without disturbing the essential fabric of society. In other words, pre-capitalist forms of exploitation provide vast and near permanent pools of cheap labour, which competes with the urban proletariat, thereby bringing the latter under political and economic control. Moreover, this seems (19) to resolve the “agrarian problem” of Indian capitalism, by ‘externalising’ rural and underdeveloped India from the “core” industrial islands. Concentrating capitalist agricultural development in particular locations of India (for example in West and North-west India), Indian capitalism could afford to under-develop other locations so that they could serve as “external markets” and as reserves of “footloose labour”.

Because unevenness is the essential feature of capitalist development, any mode of regulation, including neoliberal globalisation, has to negotiate with diverse stages of societal development. Hence local reactions against this new wave of capitalist consolidation and accumulation are bound to be diverse. The revolutionary vision consists in coordinating these diverse forces for building a formidable challenge to capitalism. Even the struggles against vestigial forms, if they have to be decisive, need to be recognised as contesting capitalist relations that sustain them and are articulated through them. In the Indian context, they are all struggles against a stuttering capitalism, against the inherent brutalities of primitive accumulation. We will have to realize that the movements are not about “saving” tribals/indigenous populations or their way of lives; the movement is a movement of labour against capital. Tribals, poor peasants, marginal peasants, landless labourers, informal sector workers, all these sub-classes are fighting against the tyranny of capital, against being fed - with their labour and resources - into the capitalist machinery. Obviously, in this fight against capital, we cannot cling on to any nostalgia for a pristine past, rather our vision must be directed towards the future, a future built on the transcendence of capital, a socialist future rooted in a participatory economy and polity. Only then can the vast majority suffering in the margins of capitalism and toiling under vestigial relations, can make a concerted, decisive effort to end the tyranny of capital.

Notes & References :

(1) Prem Shankar Jha, “Compensation not enough”, Daily News & Analysis (October 2, 2006), http://www.dnaindia.com/report.asp?NewsID=1056324&CatID=19
(2) Marx refers to this as the capital-relation.
(3) Karl Marx, Capital Vol. 1, Penguin Books (1976 [1867]), pp. 874-75
(4) See the contributions in The Commoner No 2. (September, 2001), http://www.commoner.org.uk/
(5) Karl Marx, Capital Vol. 3, Penguin Books (1981 [1894]), pp. 354
(6) Massimo De Angelis, “Marx and primitive accumulation: The continuous character of capital’s “enclosures”, The Commoner No 2 (September, 2001)
(7) Ibid. (Note: ex novo is used in the sense of `original’ or `from the scratch’).
(8) David Harvey, A Brief History of Neoliberalism, Oxford (2005), pp. 159
(9) Ibid, pp. 12
(10) Jan Breman, Footloose Labour: Working in India’s Informal Economy, Cambridge University Press (1996), pp. 23
(11) Parthasarthi Banerjee, “Land Acquisition and Peasant Resistance at Singur”, Economic & Political Weekly (November 18, 2006)
(12) Paschim Banga Khet Majoor Samity, “Terror Cannot Suppress Them: People’s Resistance to Forced Land Acquisition In Singur”, (December 6, 2006)
(13) Parthasarthi Banerjee, op cit
(14) “Anti-Naxal operations a cover for exploiting tribal people”, Down to Earth Vol 15 No 11 (October 18, 2006)
(15) Ibid.
(16) Karl Marx, “Preface to the First Edition”, Capital Vol 1, Penguin (1976 [1867]), pp.91
(17) Kozo Uno, Principles of Political Economy, Harvester Press (1980 [1964]), p.xxvii.
(18) Ibid, pp. 125
(19) Japanese Marxist Kozo Uno stressed that capitalism is incapable of solving the agrarian question. “We can say that it became clear on a world scale that the ability to solve the agrarian question would entail the ability to construct a new society to replace capitalism, and we may regard the League of Nations as having been one such attempt. The solution to this problem, of course, means no more than the external expression of the internal contradictions of capitalism, and cannot occur unless the issue of class relations is solved. In this sense, the failure of the League of Nations was only to be expected.” (Quoted in Andrew E Barshay, The Social Sciences in Modern Japan: The Marxian and Modernist Traditions, University of California Press (2004), pp.128)

U-Turn of Industrial Policy Erodes the Very Base of Agriculture By Abhijit Guha.

2007-06-22T00:05:00.000-07:00

“Destination West Bengal”: this is the rather pompous sounding slogan which the Left Front government of West Bengal has used since it made a U-turn in the 1990s, and started on a reverse course from its earlier incomplete task of land reform. To investigate the possibilities of industrialisation the state government all of a sudden appointed McKinsey, a multinational consultancy group. The booklet titled “Destination West Bengal” is in fact based on McKinsey report. Curiously, this is the Left Front government, taking out processions, organising meetings protesting entry of multinational corporations all the time – which called in McKinsey. Could not the faculty members of Indian Statistical Institute or Indian Institute of Management, Kolkata, who are renowned internationally, perform the same job that was handed over to McKinsey?

If one browses through the book one finds that in the last twenty years there has been wonderful political stability in the state and that the state government in its 1994 industrial policy has welcomed the privately owned industries. Some of the achievements of state government have been described eloquently in the first part of the booklet. In the last five years the growth rate of West Bengal has been satisfactory. High agricultural growth has been the primary reason for this. It has been pointed out that during 1995-96 the growth rate of West Bengal has been higher than the national average. In agriculture, especially in foodgrain production, the success is said to be remarkable. During the period 1982-83 to 1992-93 food grain production growth rate in West Bengal has been the highest among Indian states. As a consequence, there has been substantial rise in the purchasing power of the people of the state. The rest of the booklet “Destination: West Bengal” discusses, in a rather attractive manner, how industrialisation will proceed in a number of areas of the state. These areas are, Siliguri, Dankuni, Salt Lake, Kalyani, Asansole, Durgapur, Kharagpur, Bantala, Haldia, Falta etc. In the final section of the book (“Look, Who All are There”) we find names of a host of Japanese multinational firms. They will invest in West Bengal. After that, spanning three pages there is a list of big multinational corporations from USA, Switzerland, the Netherlands, Australia, Austria, South Korea, UK which have invested in West Bengal. Is the whole world inside the briefcase of WBIDC, or is the entire Bengal within the suitcase of foreign capitalists?

The so called backward regions of Medinipur which were selected for industrialisation (due to the industrial policy) are Haldia and Kharagpur rural regions in the East Medinipur and West Medinipur districts respectively. Large tracts of agricultural lands were acquired for industrialisation purposes in these two areas. During 1991 – 1997 much more land were acquired in these regions compared to what is being grabbed at Singur. However, apart from a few local agitations and reports or writings on local newspapers, not much had happened.

Let us have a look at the land acquisition of the undivided Medinipur district. 14,319.40 acres of land were taken in the undivided Medinipur during 1991 to 1997 – for various reason, chiefly for industries. Immediately after the central government announced its policy of liberalisation, the Left Front government of West Bengal started acquiring vast tracts of land for industrialisation, in a district which is almost completely dependent on agriculture. Data tell us that the concern of the Left government for improvement of agriculture or adequate irrigation facilities or rehabilitation for the displaced was becoming less and less noticeable in the era of liberalisation.

The government started acquiring land on a massive scale for urbanisation, industries, tourism. Village based decentralised development, land reform, rural planning by the villagers were at the receiving end. Haldia Port and Haldia industrialisation, Kolaghat thermoelectric plant and much later pig iron industries in Kharagpur: these issues were raised at the state assembly. An informative and well-organised report on land acquisition of the undivided Medinipur district was prepared by the district administration in 1993. It never got published. What was revealed in this report is truly horrifying. On the contemporary land acquisition in the district it said there have been as many as 293 cases of incomplete land acquisitions. Many of the governmental organisations or the private concerns for which the government had acquired land, were not depositing the money (required to pay the compensation) with the government. Despite repeated notices sent by the land acquisition department, there has been complete silence from their side. Farmers who had lost land were left with no compensation. In case of delays in paying compensation to the government, the concerned organisation is required to pay interest at the rate of 9% per annum for the first year and 15% per annum from the next year onwards. This sum alone adds up to Rs. 260 millions. The government irrigation department is the highest defaulter, the amount is Rs, 14,54,20,607. The public works department comes second in the list. It had got lands acquired for building roads – but no road has come up. It has a pending sum of Rs. 8,19,81,577. After this we have South-eastern Railways, Agricultural Marketing, Agriculture, Public Health and Technology departments. The report also mentions that those organisations which did not pay have already constructed buildings on the land, or have built fragments of a road or have dug an irrigation canal. If these lands are to be returned to their previous owners they will be not in their formal state. Courtesy government propaganda, land acquisition for development may seem to be a quick administrative process. The inside story is pretty terrible.

The new industrial policy of the state government harms the base of agriculture of the state. The main line of the new industrial policy is: due to land reform and growth in agriculture there has been rise in the purchasing power of the rural population. Therefore West Bengal is now a fit case for industrialisation, particularly for heavy and medium scale industries. The Left Front theoreticians have framed the new industrial policy based on this single rationale. The chief minister never gets tired of repeating this. They are forgetting that the land reform has remained incomplete. Taking back land from the pattadars (peasants who have got ownership rights of the redistributed land) and bargadars (tenants who have received proper tenancy rights) will be suicidal. This may result in the economic betterment of a small section of people, but it will also mean rising economic and social inequality. CPI(M), the main political party of the Left Front, and the small allies – CPI, RSP, Forward Bloc, who are after the ministerial berths – have chosen this suicidal course.

The state government had released the West Bengal Human Development Report in 2004. It was edited by Prof. Jayati Ghosh of Jawaharlal Nehru University. The report ends with a chapter which lists 25 suggestions on the future path that West Bengal may follow. It may be noted, in none of these 25 suggestions has it been adviced that since the state of the peasants of West Bengal has improved significantly due to land reform, its future strategy should be that of heavy and medium scale industrialisation. On the contrary, it expresses deep concern that in the recent years bargadars and pattadars are losing their land. The report, which incidentally has got messages from the chief minister and the industry minister printed on it, says in its 9th suggestion, “The government should encourage agricultural and non-agricultural based productive activities in the rural areas and in this connection government may consider forming new cooperatives.” (page 214 - 215) The model of development which the political parties of the Left Front government want to present to the people completely contradicts the research-based data and suggestions of reports of the experts committee appointed by the same government. Our humble request to those who are shouting “Agriculture is our base, industry is our future” is: please read the reports of the government of West Bengal. And think. Hollow shouting does not do any good. History has not forgiven anyone.

The author is Reader, Anthropology Department, Vidyasagar University

Resistance to Neo-Liberalism in Singur and Nandigram By N. Bhattacharya

2007-06-21T23:24:00.000-07:00

The issue of the acquisition of Corus, the Anglo Dutch Steel company, by the Tata Iron and Steel Company of India is projected as a major entry by an Indian company into the steel business of the world. One clearly understands why Ratan Tata and Co. want to blow out of proportion their recent acquisition issue which any big company treats as a normal day to day activity! Globally every day so many new business formations are taking place, maybe an equal number or more are filing their ’bankruptcy’ petitions or death certificates. In the world of corporate imperialism to sustain ‘fair competition’ in a market economy a big fish has to eat so many smaller fishes to attain the eventual monopoly or oligopoly status to dictate to the rest of the world the imperialist policies. The current scenario of acquisition, amalgamation and mergers (M&A) in the fast deteriorating health of the western economies has brought out in the open a clear and unambiguous signal: the days of the USA or European Union dictated corporate imperialism are simply numbered. Strategic industries like iron and steel, IT, nuclear power, capital goods etc. are gradually slipping out of their strong clutches or to be more specific: many of them have already migrated to China and to many of the countries of South and South East Asia. In the 21st Century western imperialism is in search of a new home! What does the elite of India have to say?

Acquisition of Corus vis a vis appropriation of lakhs of acres of fertile multicrop land of India

Every person dependent on land for cultivation either in Singur, Nandigram or Baruipur etc in West Bengal, Kalinganagar or Gopalpur in Orissia or in some remote villages in Jharkhand or in Chattisgarh is asking Ratan Tata and Co. why they don’t follow the same transparent policy while acquiring lakhs of acres of fertile agricultural land belonging to thousands of small and marginal farmers: scheduled castes, scheduled tribes, muslims and other weaker sections, as they had to follow in the Corus deal. After the management of Corus, as claimed by Tata spokesman, requested Tata Sons to take over their company, the purchasing company had to follow the complicated lengthy legal procedures of the European Union and finally after nine biddings in an auction Tata agreed to pay 608 pence per share (against the 603 pence offered by CSN) and they were declared successful. Now they have to get the consent of the shareholders of Corus. The price offered was unreasonably high when compared to the current market price of the net asset value acquired from Corus. Due to the fabulous price paid for Corus, the prices of Tata shares fell on subsequent two days in the stock exchanges in India. Tata Sons is busy contracting debts of billions of pound sterling from different international moneylenders to pay for the millions of shares to be acquired.

On the other hand, the same Indian business house under the pretext of ‘business secrecy’ refused to tell the people in India (1) when and where the Government of West Bengal advertised for the setting up of a small car project and at what place, (2) who were the other bidders who responded to that advertisement, if any, (3) what were the agreements entered into with the Government of West Bengal, (3) how much they paid and to whom they paid for the acquisition of 1000 acres of multi-crop land in Singur. The same enquiries were made when Tata put up a boundary wall at Kalinganagar on 2.1.2006 around 2500 acres of farmland that they occupied in the tribal heartland at Kalinganagar. The Orissa Chief Minister had to kill 13 innocent adivasis because they wanted to know why their land was being sold to the land-hungry Tatas. When this business community landed first in Gujarat more than a century back the then king refused them permission to settle but these people promised the king that they would enrich this country and make Indians happier through their business and professions. The way these profit hungry people are bent upon destroying the rich agricultural land of India and forcing millions of poor farmers to destitution and destruction, the common men and women of this country have to stand up and say ‘get out’ from their villages. The Tatas are behaving like the ‘bargis’, the ‘Moghul invaders’ or the ‘colonial exploiters’ in the peaceful villages of India. But our politicians are charmed by their moneybags!

Prime Minister Dr. Manmohan Singh is a seasoned politician and as an ex-employee of the World Bank (WB) he knows very well how land and property are acquired in western imperialist countries. The New Economic Policies in the form of the ‘liberalisation, privatisation and globalisation’ advocated by the WB and International Monetary Fund (IMF) were implemented in India by him as Finance Minister in 1991. Dr. Ashok Mitra, his friend and an ex-finance Minister of Jyoti Basu’s cabinet in West Bengal, raised the issue in his recent book of how he was selected in 1991 by the US administration to the hot post of this country’s Finance Minister! The Central Government is allowing all illegal methods and police highhandedness for the purchase of fertile agricultural land for developing Real Estate Zamindaries renamed as Special Economic Zones (SEZ). The WB and IMF and their paid representatives in the Indian Government think that India is a banana republic and that the people of this country can be befooled eternally by the ‘shining India’ slogan. The UPA government knows it very well that the NDA government could not survive by these false dangerous slogans. Their claim of 9 percent growth in the GDP during the rule of this powerful government failed to stop the ‘starvation deaths’ of farmers throughout the country and now even the Prime Minister’s favourite Punjabi wheat has evaporated from the Indian market! The heavyweight corporations with the help of their corrupt political dalals (brokers) are allowed to use the public funded government bureaucracy and state controlled para-military and police forces to acquire land and use it as they like as if India is no longer a democratic state, as though it is been taken over by a fascist clique. The ‘am admi’ or common man has to vote every five years and past history tells us that even a strong person like Mrs. Gandhi was compelled to withdraw the emergency raj and accept defeat in the 1977 general election. The UPA government in the centre has forgotten the simple rules of any civilised society that it is the prerogative of the owner of any property to sell or not to sell their property and that if he or she decides to sell only the highest bidder should be given the right to the property and not to any one else. This rule has to be strictly followed specially when the land owners are mainly small and marginal farmers, they belong to weaker sections and to the minority sections of society. They can not bargain with the rich corporations or state power. If the state as a dalal or commission agent shows its teeth and wants to take over the property of the poor and hapless at gun point, they are left with no other alternative than to get organised, united and challenge the state machinery. The people of Kalinganagar did it on the second day of 2006 and those of Nandigram in East Midnapore did the same thing in the last days of 2006. 2006 will be remembered as the year of ‘peasant uprisings’ in Indian history. Sri Lakshman Seth, CPI (M) MP and the king of the so called Haldia Development Authority in East Midnapore ( the CPI (M) has a number of such kings and they are having nice time, thank you very much ) issued a diktat without any authority whatsoever to grab thousands of acres of fertile land in Nandigram and its adjacent Mouza. In the early hours of the first week of January, 2007 around half a dozen people were killed for this wrong and willful criminal act of a member of Parliament and till to day no action has been taken by the state government, his appointing authority, against him for such a criminal act of negligence. The government rules demand his immediate suspension and removal from the chairmanship till an enquiry committee clears him of all charges. The West Bengal Governor is duty bound under the Constitution to order his government to take legal action against the Chairman of the Haldia Development Authority for such an illegal action and the subsequent suffering of the concerned people. The people of Nandigram are so angry with the local government that irrespective of political affiliation (the local MLA is from the CPI, a partner in the Left Front Government), they united and have dug up all the approach roads so that no police or government official could enter their villages. Ladies, gents, children, the young and old of all political parties united and sent the message to Delhi that an inch of land can not be acquired for the Indonesian communist killer Salim’s Special Economic Zones. The people of Nandigram, Singur, Kalinganagar etc. have said in no uncertain terms that in future only the people of India will decide what is good for them and not the imperialist tools occupying important positions in various governments at the centre and in the states. The union commerce minister Kamal Nath knows that in a capitalist economy buyers and sellers enter into a deal and if there is any confusion the regulatory authority supervises the negotiations . That happened in the Corus deal in the European Union. Through the SEZ Kamal Nath wants to create a real estate boom with the help of foreign banks and insurance companies but he intentionally avoided appointing any regulatory authority to supervise the real estate market as we have in the case of stock exchanges, telecommunication, electricity and so on. The SEZ Act of 2005 is a charter to completely destroy millions of people who are dependent on land. Tata Sons in their Corus deal had to follow strict rules in their negotiations but at home they refuse to negotiate with land owners, rather they treat with contempt all their complaints and boldly told the press that the land owners were agitating because they were paid by Tata’s competitors to agitate against the car project ! Look at his pride for while holding the fabulous wealth which has been accumulated by the hard work of Indian labour!

The British Land Acquisition Act of 1894 is irrelevant in the 21st Century as it is against the interest of the poor peasants and at the same time is against the letter and spirit of the Indian Constitution. Everyone knows that our Constitution guarantees the fundamental right to life and livelihood. It is unfortunate that the highest court till to-day ignored this issue on so many occasions when displaced persons in their millions knocked on its door for justice! This law is fully misused since independence against the interest of the unorganised poor. Till the mainstream political parties annul this barbarous law, people will resist its enforcement in every part of the country with all the force at their command. It is pure and simple a blunt weapon used to unleash state terrorism. . Those displaced millions and not lakhs are now homeless and jobless on the streets of ‘shining India’. The poor cultivators and landless agricultural labour of both Singur and Nandigram in West Bengal and Kalinganagar in Orissa have taken an oath not to give an inch of their land at any cost and the same strategy should be followed wherever the government tries forcibly to acquire land for the benefit of the rich and mighty. To make an agreement on rehabilitation is dangerous because the government forgets them as soon as they are uprooted from their hearth and home. Look at the quantum of the government fund which is misused daily by displaying regular full page advertisements in national dailies by the Haryana government. It clearly shows that the politicians who gifted thousands of acres of the agricultural land of Haryana to Reliance virtually as a gift for their SEZ project are afraid of their own people after the example of the farmers in Nandigram having taken up the issue with their government. All mainstream political combinations should read the writing on the wall! It is better that before it is too late they appreciate the anger of the affected farmers of this country and try to maintain India as a civilised society.

The bulk migration of imperialist capital (FDI) demands large scale land acquisition

The Manmohan Singh government is pleased that more and more foreign companies are arriving on the Indian coast to start business. First, these corporations went to those countries in the Far East from where the USA army had refused to withdraw after the second world war. Here land became scarce and the cost of production went up higher and higher. Due to Chinese exports at lower prices their exports too are suffering. South Korea, the island states of South East Asia, Taiwan etc. are in search of new land area. Singapore has no space to start new institutions. Foreign capital came in large quantity to China. Here the economy is over-heated and already there is trouble due to deepening poverty in the hinterland. Regional disparity has taken an ugly turn. China is in search of new sources of raw materials from Asia, Africa and Latin America. They want new and additional market space to sell their increasing production of goods and services. Imperialists are not sure how long they will tolerate the growing Chinese economic and political global ambitions. They want to contain China strategically. Pakistan is already their friend. Now the Indian elite has spread the red carpet for the MNCs. India has a huge land area, highly educated hard working manpower and corrupt politicians and bureaucrats. They can be compared with Mirjafars of Indian history. These parasites function as commission agents and are only interested to get rich as quickly as possible, sacrificing the interest of the nation. These foreign investors don’t forget the capacity of Indian market. Therefore, the New Economic Policy, SEZ, full convertibility of currency etc are gradually thrust upon this country of one billion population so that in the next decade or more India’s vast natural resources and its people are to be merrily consumed by the huge dinosaurs called imperialism.

Every one knows that in near future there will be a tremendous demand for land to set up businesses and every Tom, Dick and Harry is trying to acquire as much land as possible in anticipation that land prices will go up higher and higher and they will make huge speculative profits. Under normal circumstances when demand for land goes up prices also should go up. Our politicians and their paid bureaucrats have promised the real estate hawks that they will get land at the cheapest possible prices provided they are also paid their share of the booty. That is why the 1894 Land Acquisition Act and its object to acquire land for ‘public purpose’ totally fits in to satisfying the eternal hunger for land of the imperialists. Tata had to sit around an auction table to bid nine times and dish out a huge amount as premium to acquire a steel company, but the MNCs are allowed to purchase land in India at the cheapest possible price, thanks to the Land Acquisition Act of 1894. Rogue politicians are afraid to discuss with the people the content of the business agreements through which they are transferring acquired land. The West Bengal government wants to acquire more than 140000 acres of fertile agricultural land on behalf of various Indian and foreign corporations. Politicians and their bureaucracy are acquiring land under police protection and handing over that land at throwaway prices to rich business houses. This happened at Dadri in Uttar Pradesh and what happened in Singur in West Bengal is simply vulgar and people are ashamed of it. No official document is made public but 1000 acres of multi-crop land was handed over at what price to a rich corporation ? On the other hand the protesting farmers and agricultural labourers are insulted by the land grabbers that the land owners were bribed by their competitors!

Special Economic Zones (SEZ) and exports

The Manmohan Singh government argues that SEZs will increase Indian exports and that is why free fertile agricultural land and fiscal incentives (around Rs 175000 crores will be the loss of central revenue) should be extended but this fails to convince the electorate of this country. Dr. Manmohan Singh as a Professor of Foreign Trade may tell his illiterate country men what the Government of India has not done since 1950 to help our exporters to export and earn foreign exchange for the country. The argument they gave at that time was ‘export or perish’. These exporters and importers and their registered associations simply deceived the country by adopting all types of unfair trade practices including over- and under-invoicing foreign deals so that they could accumulate scarce foreign exchange outside the country. Millions of US dollars earned by our exporters are still lying in foreign countries because our honest (!) traders refused to bring them back. Now the dollar is losing its importance and it is returning back in various forms including that of fake Mauritius-based foreign institutional investments (FII). Our current account balance is always in the red, i.e. we import more and export less. India’s share of world’s foreign trade is still less than one percent.

In 1995 the imperialist powers started the World Trade Organisation (WTO) not to help India or any developing country but to expand their own exports. During the last 12 years we were compelled to open all the doors and windows of the country to import more and more but the doors of the developed world are still closed to our exports. That is why the Doha round collapsed! Recent amendments to the agricultural subsidy law in the USA are simply designed to deceive people and to avoid the WTO rules. They just changed the subsidy basket from one colour to another. Like ostriches they try to hide their heads in the sand and think no one can detect their manipulative practices. The foreign insurance and banking sector brought in huge speculative capital but till to day neither Indian crops are insured nor Indians can go in for medi-claim facilities as the premium rate is beyond their reach. In colonial days two to three percent of the population used to go to foreign countries to enjoy foreign goods, services and their hospitality business; the same group is enjoying the comforts of western life here at a much cheaper rate. Credit cards, Debit cards and so many other very costly credit systems have increased demand for the latest consumer goods which are now available in posh Malls, but most of the users are made virtually bankrupt before they reach the age of 40. Consumerism is ruining the middle class families. Without the social insurance of the west these schemes to promote sales are simply destructive for the country. Due to the high subsidy given by USA to their cotton growers our cotton has no market and naturally with the blessings of UPA government (CPI and CPI (M) supports this government) our cotton growers are starving, selling their kidneys and finally committing suicide. When the USA and Europe put restrictions on the import of agricultural crops, the Manmohan Singh government allows unrestricted imports of agricultural crops. That is the crux of his selection for the post!

The UPA government is gradually liquidating the Food Corporation of India and MNCs and big corporations are now procuring crops and hoarding them with the full knowledge of the government. Commodity exchanges are encouraging hoarding and price rises by creating artificial scarcity. There was earlier some form of public distribution system and an Essential Commodities Act to challenge artificial price rises but now the unorganised consumers are forced to pay Rs 18 to Rs 20 per kg for wheat; pulses have become a scarce commodity even for middle class families. The official consumer price index of food articles has increased by two digits as compared to last year. The official inflation rate is more than 6 percent. Dr. Manmohan Singh and his colourful Economic Advisory Council refused to tell the millions of the country’s daily wage earners: in the absence of wheat, rice, bajra and jowar how to ‘cook weeds and grasses’ to meet their children’s hunger. The government ordered wheat imports but its price is very high and quality wise it is fit only for animal consumption. The development of genetically modified crops in USA in particular resulted in huge production but developed countries refused to purchase them as they were found unfit for consumption by both human and animal beings. Even goats were found dead in India after eating the leaves of the BT cotton plant that used genetically modified seeds. The UPA government promised the common man, ‘am admi’, that it would look after his interests, but during the last two and half years it has planned to make the rich richer and the poor have turned into beggars and forced to commit suicide, it never happened on such large scale in the past. Even among the rich there is huge gap between the top thin layer and relatively bigger section of so called rich is fuming in anger due to widening disparity. They are cursing the government!

Sri Kamal Nath’s SEZ in hundreds is challenged by the illiterate cultivators of Singur, Nandigram, Kalinganagar and Dadri. He wants to copy China and knows that there are only five there as against an unlimited number in India. Has he asked his friend the Chief Minister of West Bengal why and how long the factory chimneys in his state have stopped functioning. What is the total land area locked up in closed factories in West Bengal. Why are the tea plantations in West Bengal sick when tea prices are booming in the international market? Will the conversion of tea estates to real estate solve the problems of thousands of workers engaged in this industry? There is already an export processing zone at Falta, it started in late eighties but it looks deserted even during day time. Lots of units stopped functioning long back, and there is vast area in it till today where new units may be set up. Why Falta is ignored by the CPI (M) government ? Hindustan Motors was allowed to convert around 50 percent of their allotted land for real estate business by the present Chief Minister and the trade union of Hind Motors is run by the CPI. Why did they allow this real estate business? This area was given by the government in the early fifties for the manufacture of the Ambassador car. Ratan Tata and Birlas are close friends, can’t they have two car units side by side. The West Bengal Chief Minister and his political party want industrialisation on only fertile multicrop land. Why did they fail during their rule for 30 years in preparing a blue print of this or that type of industrialisation. Is there any land use map for West Bengal? Why was Prof. Ashok Mitra, ICS, directed first to proceed on preparation of land use map for the state but then told not to proceed on this during the regime of Mr. Basu? If the present regime is so sincere about industrialising the state, why do not the government representatives sit down with the opposition who got half the votes of the electorate in 2006 election. 200 and odd seats in the Assembly mean nothing when the government stands paralysed by the agitations of people of the state. The Chief Minister forgets that his huge majority includes so many other left parties and without them the CPI (M) is in a minority. He claims that he is the only patriot and others are ruining the future of the state. He has foolishly challenged a muslim group as fundamentalist and the very next day the Home Minister of the country requested him to verify his facts. Muslims say they have 27 percent of the votes and till to day the ruling group in West Bengal survives on their support. The partners of left front Govt. and other opposition parties are threatening CPI (M) for its policy of the re-zamindarisation of fertile agricultural land by corporations. The CPI (M) wants industrialisation in West Bengal but their trade union wing CITU started a strike in the Jute industry during this disturbed period. In the recent all India meeting of CITU held at Bangalore, West Bengal’s representatives did not open their mouths when asked by other comrades why their government is displacing thousands of poor and marginal farmers and landless agricultural labour through land acquisition for the benefit of MNCs and big Indian business houses.

Observations

During the 60 years after Independence, the Indian people became wiser and more responsible. With great difficulty they maintained the institution of democracy despite lot of deficiencies. During the national emergency, every one stood up united and faced the crisis. But on the issue of priorities there is yet to be consensus. The ‘haves’ have virtually hijacked the country and the ‘have-nots’, whose number is increasing every day due to wilfull wrong planned strategies, are the majority in number and they are made to suffer in the hands of the microscopic section of the society. This handful of people in the executive, judiciary and the legislatures are running the show for their narrow selfish interest dictated by imperialists. At the macro level they have already sold the country to imperialists. After quite long period of time of the Tebhaga and Telengana struggle in late nineteen-forties, our farmers and countless agricultural workers are standing united on their cultivable land and telling their state governments that not a single inch of land will they surrender to corporations so that the latter can earn higher profits. It is advisable that ruling class should go slow and take people into confidence and adopt a rational policy so that the vast majority of the deprived population who were marginalised during last 6 decades are given their due share in framing the policies and programmes to reconstruct this country as a civilised society. Any hasty decision to suppress the demand of the vast majority by brute force may boomerang on civil society and lead this vast country to a civil war. Yes, the imperialists want exactly that and they are doing it every day in Africa and elsewhere. Nobody wants that to be repeated in India. Power must be restored to the majority that is the rule in a democracy. The current peasant uprising has given a golden opportunity to rectify the long pending imbalances and move in the right direction. The wishes of the Indian people should be honoured.

The SEZ threat to Water - from South Asia Network on Dams, Rivers, and People (SANDRP)

2007-06-21T20:56:00.000-07:00

The Special Economic Zones, which are posing a big threat to farmers and the agriculture sector, are a completely anti-people and anti environment scheme. They are also a threat to the water security and food security for the areas where SEZs are proposed and would certainly have an impact on the national agricultural sector.

But the prime minister says SEZs are here to stay. On April 6, green signal was given for notification of 83 more zones. The only concession the PM is ready to offer is what he calls a just, humane, effective R&R policy.

The proposed policy would include a mandatory clause that the area notified for SEZs or large scale industrial projects should not touch existing residential/ dwelling units of villages.

General Impacts of SEZs on Water Sources

In the entire din surrounding the impacts of the Special Economic Zones there is not much information on the impact of these zones on the water situation in the areas around these zones. The Finance Minister P Chidambaram has been credited with a very interesting statement “Whereinfrastructure already exists, it is perhaps not necessary to create SEZ.” The trouble is, in backward areas where infrastructure is weak, the impact of SEZ on access to water would be even more serious.

Broadly, there are three kinds of impacts that SEZ can have on access to water for the people in the SEZ area.

First would be due to the diversion of water for use within the SEZ.

Second impact would be the impact of release of effluents from the SEZ. Here the situation at locations like Ankleshwar in Gujarat and Patancheru in Andhra Pradesh, among scores of other places is illustrative. At these places, the release of untreated effluents from the industrial estates has created hell for the residents of the area. Our past performance in achieving effective pollution control is dismal, to put it most benevolently. And there is absolutely no movement to change that situation.

Thirdly, the conversion of land to SEZ would mean destruction of groundwater recharge systems. Moreover, it should be remembered here that in India, right to extract groundwater continues to be connected with the ownership of land. Hence SEZs even in relatively small area can pump out huge quantity of water, drying up the wells of the surrounding area. There could be conflicts between the zones and the local residents, as could beseen at Plachimeda in Kerala, as also in Varanasi and Jaipur.

Cumulatively, the impact of all these could be quite serious in most areas, and could precipitate crisis in the water scarce areas.

Land Requirement for SEZs

According to the website of the commerce Ministry, totally about 41,700 ha of land is to be taken for the formally approved and notified SEZs. This looks like a gross under estimate if we consider just a few large SEZs like the Nandigram SEZ (5,600 ha) in W Bengal (this has been cancelled by the W state govt, but the Chief Minister has said that it will come up elsewhere), Maha Mumbai (10,000 ha) and Navi Mumbai (5,000 ha) SEZs in Maharashtra, the Mundra SEZ (13,000 ha) in Gujarat, the Gurgaon SEZ of reliance (10,000 ha), the Pune SEZ (840 ha) and the POSCO SEZ (1,600 ha) in Orissa, to name a few known examples. When land is acquired on such massive scale, the water requirement for such SEZs would be huge and would have very large impact on water access for the surrounding area. The SEZs at such locations will also have impact on irrigation and agricultural development.

Where’s all the water going to come from?

The Govt of India SEZ Act of 2005 has no mention of the sources of water for the proposed zones, leave aside the question of restrictions or impactassessment. In fact, the only time the Act mentions water, it is in the context of territorial waters of India. The SEZ acts or orders or notifications of various states give a blank cheque to the water requirement for the zones. For example, the Gujarat Act says, “The SEZ developer will be granted approval for development of water supply and distribution system to ensure the provision of adequate water supply for SEZ units." Similar is the situation for other states.

Available information about the water needs and sources of water for various SEZs should ring alarm bells.

Mahamumbai SEZ The massive water demand is to be met by the Hetwane and Morba dams in Pen and Khalapur tehsils in Raigarh district respectively, but there doubts about the capacity of Hetwane reservoir. Farmers had to struggle to get irrigation water due to them from the reservoir, but that won’t be available now.

Navimumbai SEZ As per official website, it will require at least 6 million liters per day, expects it to get from Hetwane dam.

Mundra SEZ As per official website of the SEZ, it expects to get at least 6 million liters per day from the Sardar Sarovar project, as promised by Gujarat Water Infrastructure Ltd. Ultimate water requirement would be 400 million litres per day. Here it is relevant to note that the report of the Comptroller and Auditor General of India for Gujarat for the year ending on March 31, 2006 has already criticised Gujarat govt for extra allocation of255 million litres per day water from the Sardar Sarovar Project for central Gujarat areas for which there was no provision in the plans. Moreover, the govt has allocated more water for industries in Kutch, which would also have impact on access to water for the drought prone areas, as clearly indicated by the CAG report.

POSCO SEZ The water requirement, as given on the POSCO website, is 286 million litres per day, will be procured from Jobra barrage on Mahanadi River in Cuttack district in Orissa. The water for this is bound to come from the upstream Hirakud dam. There is already an agitation against reservation of water from Hirakud dam for industrial use.

Nagpur IT Park SEZ The official website says “The water will be drawn from irrigation project” in a document inviting express of interest.

Mangalore SEZ In a letter in June 2006 to the Prime Minister Manmohan Singh, the convener of the SEZ Impact Assessment Committee, an affiliate of the NGO Forum of Mangalore has quoted the Mangalore SEZ Limited having estimated the water need at 136 millionlitres of water a day. When Mangalore city is facing water crisis without the SEZ, one can imagine what will be the case when SEZ comes up.

Cochin SEZ The website of the Cochin SEZ ( www.CSEZ.com ) says, “The Special Economic Zone is a foreign territory within India. CSEZ has an integrated water management system comprising a 1.5 MLD water supply system.”

One can already see the seeds of conflict that these water allocations would create. If these tips are any indication, implementation of these SEZ will create crisis of access to water for the people staying in areas around the proposed SEZs.

Promise of National R&R Policy holds no water

The PM promised on January 11, 2007 at a FICCI meeting (of all places) that within three months a humane National Policy for Rehabilitation and Resettlement will be formulated. The trouble is that his government’s track record is very bad on that issue, like most other issues affecting common people of the country. His govt has not bothered to implement the first ever National R&R Policy, notified in Feb 2004, which does not lend anycredibility to his words.
Further to show how non-serious the govt is about R&R, on March 21, 20˜07, the Union Commerce Ministry notified some changes in the SEZ Act, stating among other things, “the developer shall make adequate provision for rehabilitation of displaced persons as per the relief and rehabilitation policy of the state government.” The trouble is, no state has a just R&R policy that is legally mandatory.

Private enterprise a public purpose?

In a highly questionable move, the govt intends to expand the definition of public purpose to include help to private enterprise, in addition to the current strategic interest and center’s and state’s infrastructure, and thus get right to acquire land for private projects. But this is most shocking - how can the govt equate private projects as public purpose?

This will also be unconstitutional. The impression among everyone in the country that the govt, hand in glove with the private industries and real estate developers, is out of cheat the common people out of their lands at any cost, is entirely correct.

Among the changes effected by the Empowered Group of Ministers in SEZ policy on April 6 is one that says that the private developer will acquire the land and the state will have marginal role in land acquisition. This is unacceptable, as this would leave the farmers at the mercy of the private developer. In the negotiations between the millionaire and paupers, it is well known who will win.

No Land Use Policy in India No state in India has a land use policy, only a couple of states like Kerala have a draft policy, yet to be converted into a Land Use policy. In absence of land use policy, it is free for all and there is no coordination between agricultural development, water resources development, forest and wildlife conservation and other uses of land.

Protests in West Bengal

Nandigram is the most well known face of protests against SEZ projects in W Bengal, though it is not the only one. Protests are also rising at Haripur where the govt wants to set up a huge 10,000 MW nuclear power project as SEZ. In Nandigram in Medinipur district, the govt wanted to acquire 5600 ha of land for setting up chemical industries SEZ. The W Bengal govt is so adamant on setting up such SEZs that at Nandigram, the police and armed CPM activists together attacked thousands of innocent women and children.

Protests in Maharashtra

The Govt of Maharashtra has issued a land acquisition notice to acquire 10,000 ha land of 45 villages in Pen, Uran and Panvel talukas of Raigarh district for the proposed Mahamumbai SEZ by Reliance. But farmers here have been strongly agitating against this proposal, refusing to give any land for the project. In Pen taluka there are people displaced by the Koyna dam, still without potable water, living in miserable conditions, punching holes in govt’s claim of rehabilitation. Adjacent to this land, the company, in joint venture with the Maharashtra City and Industrial Development Corporation, is acquiring 5000 ha for Navi Mumbai SEZ.

At Maan near Pune, where the govt plans to acquire 800 ha of land for industrial zone, a strong protest by the farmers, fisherfolk, salt pan workers and other affected persons demanded scrapping of the SEZ on April 5.

Food Security Threat

The SEZ Act, by allowing acquisition of (so called single cropped) agricultural land for such zones, is threatening food security of the country, with the stagnation of food production and reduction in yields for a decade, even with the SEZs.

BJP’s Kashiram Rana, Convener of Parliamentary committee on SEZ says that the policy needs to be scrapped and no agricultural land should be allowed to be used for SEZs. However, his words do not hold too much credibility as in a number of states like Gujarat, where BJP is in power, agriculture land, even in Sardar Sarovar Project Command area is being taken for SEZ.

Large scale Mangrove destruction in Gujarat

In the 13,000 ha Mundra SEZ in Kutch in Gujarat, 3000 ha area is covered by Mangroves, which are already being destroyed for the SEZ. Gujarat Forest Dept has raised an alarm over this destruction. Mangroves are also facing destruction at a number of other locations in Gujarat due to industrial expansion along the coast in Kutch, Saurashtra and South Gujarat. Potentially the largest SEZ in the country, the Mundra SEZ will destroy fisheries and livelihood of large number of fisherfolk and they are protesting against the SEZ. On Feb 14, 2007, five members of the community have filed a petition before the Gujarat High Court. Nine villages have also lost their grazing land to the SEZ.

Protests in Haryana

People of Gadauli Khurd village near Manesar in Gurgaon District in Haryana on March 28, 2007 opposed the possession of land by the govt to hand it over to Reliance group (Mukesh) for SEZ. The officials had to beat a retreat, but threatened to come back to dispossess the people. On April 1, the farmers of Khandsa, Narsinghpur, Mohammedpur, Gadouli and Harsaru village took a collective decision not to give the 558 ha of land to the Reliance as the govt had taken the land in 2003 in the name of industrialization in public interest and decided to move court. Kuldeep Bishnoi, a Member of Parliament has decided to sit on hunger strike against the project. The proposed SEZ in Gurgaon violates the norm finance minister has proposed thatSEZs should be taken up only in backward areas.

At Jhajjar in Haryana, Mukesh Ambani group plans to set up a 10000 ha SEZ in partnership with Haryana Industrial Development Corporation, but after the decision of GoM on April 5 to limit the size of SEZs to 5000 ha and taking away the role of state to acquire land for SEZ, this SEZ is in some trouble. PIL in Rajasthan HC In response to a public interest petition questioning the manner in which the Mahindra World City SEZ was formed near Jaipur, the Rajasthan High Court has issued notices to various concerned including the Union and state govt.

What justification for subsidy to industries The SEZ provides a large amount of subsidy to the industries and there is absolutely no justification to provide any subsidy to industries. Even agencies like the IMF and ADB have questioned the need to provide subsidies to industries. In its report Asian Development Outlook 2007, ADB says the subsidies are expensive, unnecessary and would provide disincentives to the units outside SEZs and alsowould make the landless people the worst affected.

Projects so far

So far, the board of approvals in the commerce ministry, the single window clearing house for the SEZ has approved 237 projects, of which 63 havebeen notified, 60 are awaiting notification and the CMs have been pushing their case. On April 5, the group of Ministers approved notification of 83 more SEZs, limited the size of SEZ to 5000 ha, asked state not to acquire land for SEZ and said that one member of each of the displaced family will be given employment. However, there is no clarity how this will be implemented. Another 160 odd applications have received first stage clearance as the developers do not have land in their possession.

There are 325 more applications that are pending. It is clear that SEZ are going to remain a very big threat to the farmers and agriculture of the country.On World Water day this year, the Prime Minister said, “we cannot allow human societies to descend into chaos due to conflict on utilisation of water resources.” Action speaks louder than words, Mr Prime Minister.

Let us see what his govt does to address the conflicts that SEZs are creating. A lot needs to be done to ensure that water use at these SEZs do not become seeds of bigger crisis in the days to come. Going by the track record such hope does not seem realistic.

Special Exploitation Zone By P.N Venugopal

2007-06-21T20:30:00.000-07:00

At Cochin’s Special Economic Zone, independence is a forgotten ideal. Here, as in other SEZs, the government has long treated native soil as territorial possessions of foreign nations, exempt from taxes, rules and safeguards that apply elsewhere. The only losers are the workers. P N Venugopal reports that now this charade is being expanded.

17 August 2005 - Spread over 103* acres of land and fortified by high walls, the Cochin Special Economic Zone is an imposing presence in the vicinity of the headquarters of Ernakulam district, Kerala. The public has no free access to the SEZ; entry into the Zone is perhaps more difficult than to the restricted areas of the Southern Naval Command, also in Cochin. The Zone has its own water supply system, power supply and effluence-treatment plant. It has 79 factories manufacturing ready-made garments, rubber gloves, electronic items, software, hardware, food items and jewellery. More than 7000 people work in these factories.

In 1965* the first Special Export Processing Zone was set up in Kandla. Seven more began functioning in the subsequent years at Mumbai, Chennai, Surat, Falta, Kochi, Noida and Visakhapatnam. The primary objectives of the Special Zones are earning of foreign exchange and employment generation. These zones are foreign territories in India as far as Indian customs and excise duties are concerned. The units set up in the Zones are exempt from these duties and import duties. An import licence is not required for importing raw materials or components. Customs examinations are kept to the bare minimum, and self-certification is sufficient. Income tax exemption is also allowed for the first ten years. The Central and State sales taxes and service taxes too are not applicable to these units. Supplies from the the rest of the country are treated as exports, and domestic suppliers are eligible for export-related benefits.

The only condition imposed on the units is that they have to be 100% export oriented, and should become Net Foreign exchange Earning (NFE) units within three years. In 2000, these zones were renamed Special Economic Zones. The change in the name was not just cosmetic; the dropping of the word ‘processing’ was significant. Now even trading units could find space in the zones and enjoy all the above benefits. An added attraction is that the labour comes cheap and the zones are more or less free of trade unions.

Cochin’s SEZ is the smallest one, and according to trade union sources has comparatively better working conditions than the others. And about 60% are women, indicating that there is labour to be had for both sexes. But while there is plenty of work to go around, these aren’t jobs to be envied. Approximately 55% of the total workforce is made up of contact workers, who do not enjoy any of the benefits and privileges that regular employees do. The Contract Labour (Regulation & Abolition) Act 1970 specifically prohibits employing contract workers in activities which are “permanent and perpetual” in nature. Almost all the activities conducted by the units in the CSEZ are permanent and perpetual in nature and yet the practice of employing contract workers goes unabated. Workers are paid as low as Rs. 35 to 75 a day, and are often made to work more than the stipulated eight hours for no extra payment; the rules of the Minimum Wages Act offer no protection to contract workers. Worse, they have to part with anything between Rs. 10 to 15 daily to the contractor as his commission. Recruiting agencies get paid for the contracted amount from the companies in the Zone. It is they who then make the payments to the workers on a monthly basis after deducting their commission.

The workers, once they enter the premises do not have any contact with the outside world. The work atmosphere is oppressive; the eerie stillness of work is only occasionally broken by a woman asking for permission to use the toilet. “There are restrictions even in going to the toilet. The supervisor will shout if we take more than a few minutes,” says Sajitha, a semi-skilled worker in a ready made garment unit. “How much ever hard we work, we are scolded and shouted at in front of others. There are very few days when I’ve not cried.” The workers are reluctant to talk, and are afraid of being quoted. Sajitha [not her real name] and other women workers who spoke about the intimidating atmosphere in the Cochin zone insisted on changing their names when quoted.

Most of the women workers come from far away places and are often the only bread winners of their families. Groups of five or six of them rent a room and live together with very limited facilities. A frugal meal of rice and a curry cooked once in a day is shared among them as breakfast, lunch and supper. “We took up this employment with great hopes, but now feel trapped,” says Seena who has been working in a garment factory for the last five years. “We cannot give up and go back as our families are totally dependant on us and there are very few alternatives.” Despite employing more than 3500 women, the zone does not provide accommodation facilities nor are there any crches. Transportation facilities are inadequate. The workers are taken by vehicles to the factories for the morning shift, but they are left in the lurch once the shift is over. “After the night shift, we are taken in a vehicle and all of us are forced out in front of the first house where some among us stay. All the rest run for their life in the dead of the night,” says 25-year-old Mallika working in a ceramic unit. The lofty ideals of each zone developing into townships catering to all the needs of the work force including housing, education, medicare remain only on paper.

Often the shifts run 10-12 hours a day to achieve production targets, without the workers receiving any overtime allowances. “My health is ruined working continuously to complete the stipulated number of pieces. They won’t allow me to take a day’s leave to go to the doctor,” mourns Mini john, a contract worker in a glove-making unit.

Exploitation is not limited to the blue collar jobs; even the sophisticated Information Technology jobs here come with a millstone around the employees’ necks, in the form of ‘traineeships’. Employees are appointed as trainees for eleven months on meagre wages, and then their employment is terminated. They are then reappointed again as trainees after a reasonable lapse of time and the trainee cycle continues for any period of time you are willing to let yourself be ‘trained’.

The lot of permanent employees is also not much better. Although the Minimum Wages Act does apply to permanent work, only those industries that are brought under its purview by the government can be thus regulated, and so far the IT and Readymade Garment sectors have been left out. Thus the majority of workers in the Cochin Zone receive no effective protection under the Act. Many workers complain that the Provident Fund and Employees State Insurance contributions collected from them are not being remitted.

In order to ‘facilitate the smooth functioning’ of the zones and to stop ‘outside interference’ the powers of the labour department were transferred two years ago to the Development Commissioners, who are in charge of the administration of the zones. With that the last resort for redressal of grievances of workers has been taken away. The administration is vested in a Development Commissioner and a fairly large beaurocracy. The administration admits without qualms that their responsibility is only to see that the units function without any interruptions. “We cannot bother about the conditions under which the employees work nor about the contract labourers,” says TV Chandran, one of the Assistant Development Commissioners of the Cochin Zone.

Not every employer in the CEZ, though, appears to be exploiting the workers; there are a few companies which pay their employees a decent salary. Tyco Eletronics Tools India (the Indian subsidiary of Tyco International, a US based multinational) is reportedly one among them. But, Mr Mazood Basha, the Unit Head of the firm which manufactures precision tools and employs highly skilled workers, declined to reveal the minimum or average level of emoluments. “If I reveal the exact figures there are chances of my competitors grabbing my trained personnel,” he says.

Even though, Kerala has a tradition of militant trade unionism, the unions have not ben able to effectively protect the rights of workers in the zone, union leaders admit. Only about 1500 of the total workforce of 7000 are members of any trade union. There are trade unions in only 21 of the 79 units functioning in the Cochin Zone, the majority of them being led by the Centre for Indian Trade Unions (CITU). “Attempts to organize the contract workers have not born any fruit,” admits Nasser, Joint Secretary of the CSEZ Workers Association (CITU) “They are afraid. They fear retribution from managements and contractors”, he adds. The women workers also allege that they were tutored on what to say to the State Women’s Commission and The Labour commission when they visited the Zone. They confess that they always abide by the management’s instructions, for fear of reprisals, as also from apprehension that the company itself might close down, if they revealed the truth. “The work culture of the Zones is akin to that which existed during the Industrial Revolution in Europe; mindless exploitation,” comments advocate Shiny, President of the Workers Union, an independent trade union.

With the SEZ ACT 2005 getting the President’s assent on June 23, and permission given to establish as many as 45 new zones in the private and joint sector, it is quite apparent that the future industrialisation of the country will be closely interlinked to and concentrated in the Special Economic Zones. A cost-benefit analysis of this approach is therefore imperative. But there is very little data available to conduct this study; neither the government nor the Zones themselves are conducting such an assessment. The Cochin Zone administration could provide only two figures: the government has spent Rs.96 crores so far on infrastructure development, and the total exports from the Zone were Rs.463 crores for the year 2004-05. The value of their imports, or the revenues lost by providing tax concessions and exemptions to units operating in the CEZ were not available with them.

However, some indicators are available from a study conducted by International Confederation of Free Trade Unions (ICFTU). The foreign exchange earned by all the 811 units in the 8 Zones put together came to only Rs 18,309 crores, (4.08 billion dollars) a mere 5% of India’s exports during the fiscal 2004-05. but what of the quality of the jobs and at what enormous cost? As much as two-thirds of this is used by them for imports of raw materials and components. (See Box). Add to that the profits transferred from the country by wholly owned foreign companies, the revenue loss from tax concessions, and the hidden costs of the natural resources used up by the Zones - and the SEZs actually appear to be a net drain on the economy. That 100,650 people have gained employment may be cited as a saving grace, but this is also of a suspect nature, with workers exploited the way they are.

It’s not clear, then, why the SEZs should be ’special’ in any way, but that’s a question no one is asking seriously. Like much else in the ‘development’ of the country, the theories behind the economic decisions have been embraced only to make those decisions; whether they have any merit at all is a question - and a burden - left to the workers. (Quest Features and Footage) ⊕

The International Scenario

The first Special Zone which bears any semblance to the present-day ones was set up in Spain in 1929 with the intention of increasing exports by value addition to the raw materials available in that country. It was also the time when an unprecedented depression was stalking the economies of the West. Skillful technicians were employed and they were a privileged class. But the International Monitory Fund and the World Bank highjacked the idea in the 1960s. They saw the Special Zones as a tool for penetrating the third world economies, and ever since the scenario changed.

Exploitation of labour in the Special Economic Zones is an international phenomenon and the International Confederation of Free Trade Unions (ICFTU) corroborates this. The Kenya Human Rights Commission recently launched a book “The Manufacturers of Poverty: The Untold Story of EPZs in Kenya”, that has this to say: “jobs that pay poverty wages do not significantly improve the lot of workers, nor raise their economic status. They reflect the worst effects of globalisation and contrary to their objective of empowerment, end up becoming factories for the manufacture of poverty”.

The interviews we had with the women workers of the Cochin SEZ are almost verbatim reproductions of the words of Grace Nyaeko, working in a SEZ in Kenya. She says “I’ve developed tuberculosis as a result of breathing in the dust that emanates from the garments I stitch. I’ve been suffering for three years now and the management does not care. They are only interested in the number of clothes I sew per day”. Time off for medical check-ups has been denied, Nyaeko adds, as have overtime allowance for the occasions she stayed on at work in an effort to meet production dead lines.

Labour Notes South Asia points out how violations of the human rights of skilled workers is rampant in garment factories at EPZ Karachi. “These workers are paid ridiculously low wages. They have no job security. No medical treatment is provided”. Whenever a foreign delegation visits the zone, the management conjures up false papers depicting an exaggerated salary structure. If a labourer reveals the truth, he loses his job, say the Notes.

The ICFTU speaks of a typical Special Zone in Nicaragua: “The metal covered buildings lie under a leaden sky. Nothing in their appearance suggests there are human beings inside. They look like giant warehouses. Inside the only sound is the noise of machines. There is not a single human sound. From time to time, someone gets up and asks for permission to go to the toilet. The workers are only allowed to go once during their ten or twelve hour shift and even then their time is strictly limited. If they are absent for more than three minutes, the supervisor shouts for them to come back to work. Once the women have entered the building, the doors are locked. Nobody can leave or have any contact with the outside world”.

The All China Federation of Trade Unions, the official trade union of China confirm the practice of low wages often below the legal minimum and just falls short saying that exploitation is the rule.

Regarding the exploitation of women, the ICFTU says they are used to allow for excessive “flexibility” reminiscent of the manufacturing methods of the second half of the 19th century in European towns. “Most women are confined to repetitive tasks in production while men move on fairly quickly to better paid supervisory jobs”. It’s pertinent to recall that the women workers of the Cochin SEZ complain of forever remaining ‘helpers’ even as their male counterparts move on to become ‘operators’.

The International Labour Organisation (ILO) has over the years made many recommendations towards the improvement of the working of the SEZs. Surprisingly, countries like Dominican Republic and Nicaragua have implemented at least some of the suggestions, while India has not even made any attempts. On the contrary, the recently passed SEZ bill too had a clause in it which gave powers to the state governments to pass a bill bringing the Zones outside the purview of privileges like trade union rights, gratuity, bonus, maternity leave etc, which are conferred to workers as per the existing state laws. It was the stiff resistance of the Left parties that saw the removal of this clause.

A cost-benefit analysis is underway in most of the countries. These are some of the observations of the ILO in this regard: Investment has been narrowly concentrated in the electronic and clothing and footwear sector. Investors usually locate only simple processing tasks, thus limiting technology and skill transfer. Most of the jobs are low wage, low-skill jobs. Very little of the foreign exchange generated stays in the country. The foreign investment is not secure and could leave easily. The investors often import all their requirements procuring little from the local market.

An ICFTU study of six Asian countries including India reveals that almost two thirds of the foreign exchange earned through the SEZs is used up by these same Zones for import of raw materials and assembly parts. In a particular year the total foreign exchange earned by Srilanka through Special Zone export was 250 million dollars, while the imports they made accounted for 174 million dollars. The ICFTU states that it is very difficult to obtain import figurines from the governments while they trumpet the export earnings.

P N Venugopal is an independent journalist based in Kochi, working for The Quest Features & Footage.

* Corrections made on 1 Mar 2006. 110 acres corrected to 103. 1969 corrected to 1965.

Special Economic Zones (SEZ) of India and the “China Model”: What is going to Happen? By R. Ali

2007-06-21T11:57:00.000-07:00

Strong protests and resistances have developed all over the country against the drive of land-acquisitions in the name of Special Economic Zones (SEZs). These protests and resistances were dealt with massive state terror, sometimes together with the terror unleashed by the cadre forces of the so-called left CPI(M) as happened in Nandigram of West Bengal. The mayhem in Nandigram is so barbaric that the governor of West Bengal, a representative of the state of India, expressed the incident as “cold horror”. The struggle of the villagers and the peasants of Nandigram, Raigad, Paradip, etc. became so resolute that it halted the ruling classes of India in implementing their projects of SEZs. Barring 63 SEZs (“which have no problem of land acquisition”), all of the SEZs had been postponed. But the investors of domestic and foreign origin became restless about the temporary freeze on the SEZs. The chief ministers of several state governments and even the governments of several countries fervently urged (read: pressurised) the Government of India [henceforth GoI] to “clear the water”. In the midst of this fiasco, Nandigram witnessed ghastly killings of the protesters in 14th March. Interestingly, this carnage perpetrated on behalf the ruling classes and their cohorts could not deter the resistances of Nandigram. Hence the stalemate remains. There are assembly elections of Uttar Pradesh also. But unfazed by these circumstances, and under tremendous pressure of the national and international capitalists, the GoI has announced few cosmetic changes in the policies of SEZs, and promised a “human” package of rehabilitation on 5th April. More than 80 SEZs were cleared to be operated soon.

It is beyond doubt that the blueprints of the SEZs have been prepared to serve the interests of the big capitalists of India and that of the imperialist capital (on which the India’s big capital is overwhelmingly dependent). To serve their interests, the BJP-led NDA government incepted the SEZ policies in 2000. Soon after the inception of SEZ policies, several state governments (including the left-ruled West Bengal) jumped to the bandwagon and made state-level editions of the SEZs. In 2005 the Indian parliament adopted the SEZ Acts with the support of all the parliamentary parties including the lefts . In February 2006, the government started to implement it. From the very beginning these gained such tremendous momentum that almost 10 projects per week on an average had been granted. Within October of 2006, 403 SEZs projects had been approved. 63 SEZs were notified (“which have no problem of land acquisition”), 174 SEZs were formally approved (which have received green signal from the respective state governments to acquire land), and 166 received in-principle approval those have to acquire land within three years from the date of approval (this time-limit has been revised on 5th April as one year). 650 applications were submitted till October 2006 (more had been submitted later). The speed of approval of the SEZ projects suggests how aggressive the big capital & finance capital are for the SEZs.

Indian SEZs: A Historical Perspective

In 2000, when the blueprints of the SEZs had been drawn, it was proclaimed by the commerce ministry of GoI that India must emulate the path of “export-led economy” of China for the following reasons: to progress within the fierce competition in the era of globalization; to accelerate the rate of growth of economy; to create jobs, etc. At the same time, the big houses of business like CII, FICCI, ASSOCHAM, etc. endorsed this policy-statement with whole-hearted support. Even the imperialist countries/agencies supported these policies of the GoI. Some of them (World Bank, McKinsey, several international financial organizations and the USA), in fact, helped to charter the path of moving forward with the blueprints of SEZs (see footnote 1).

Why do the ruling classes of India so much interested in the ‘model’ of SEZs? Why are the ruling classes rushing with break-neck speed to ape the ‘export-led economy’ of China?

It has been shown by the analysts of the big capitalists of India (including the imperialist capital) and also by the parliamentary parties of all hues (including the so-called leftists) that ‘industrialisation’ and ‘development of infrastructure’ are the primary needs of the country at the present moment to accelerate the economic growth. But these said ventures require vast amount of capital. This massive demand of capital cannot be met by domestic capitalists. The GoI had also withdrawn itself from taking initiative to set up public sector industries and infrastructure since the inception of New Economic Policies (NEP) and/or ‘liberalisation’. Hence these require vast amount of foreign capital. Though the caps and regulations on foreign investments (both foreign direct investment & foreign institutional investment) had been lifted substantially during the last 16-17 years, the FDI in particular, remained at one-tenth of that of China. They are trying to show that China attracted huge amount of foreign capital by setting up SEZs which had accomplished the ‘industrialisation’, ‘development of infrastructure’ etc. Hence, India must develop ‘export-led economy’ like China to attract FDI. More measures must be taken to catch China with respect to attracting FDI. These measures must be SEZs, said these ideologues of the big capitalists and the imperialists.

Moreover, it was strongly proclaimed: Though an internal market has been developed within the country which lure many foreign companies (including the domestic companies), it is imperative to grow the export on a massive scale to grow the rate of profits. In these export markets there are strong competitors like China & other ‘tiger’ countries of east and south-east Asia which are enjoying the bigger pie. Hence to compete in this foreign market under steep competition, it is necessary to arrange certain measures which are nothing but SEZs.
Several measures have been proclaimed two of which are very important according to these ideologues:

1. Tax-rebate: It was shown that during the period of ‘liberalisation’ and/or ‘reforms’, regulations on investment of both private and foreign capital had been lifted considerably; several incentives/subsidies have been doled out to both the foreign and domestic capital; tax-structures have been changed drastically to favour the big business houses; the compulsions of WTO made the duties/taxes to be reduced to a considerable extent; etc. Hence, the ‘space’ to offer more sops & concessions are being limited. But these sops & concessions (in the form of tax-rebates) alone can attract foreign capital on a “massive” scale “as happened in China”. Hence the tax-waiving policies of SEZs are a dire necessity for India.

2. Labour Laws: The labour laws of the country cannot be changed in a drastic manner due to several factors. For this reason, the capitalist classes (including the TNCs operating in India) cannot achieve full freedom of hire-and-fire; taking only part-time workers in the permanent nature of jobs; buying labour-power at any conditions completely favourable to them; terminating the benefits of PF, pensions, etc. Hence, the big capitalists and particularly the foreign capital are looking for avenues of complete scrapping the existing labour laws which can be accomplished only in certain zones like SEZs. In this case also, the ruling classes of India are striving to emulate the “path of China”.

These two factors are very much crucial behind the recent frenzy of SEZs. More factors are there which will be discussed in later part of this article.

The SEZ policies of the ruling classes of India (including Latest Changes)

India developed ‘Economic Processing Zones’ (EPZs) to boost exports long ago. In 2000, during the tenure of NDA government, these EPZs were transformed into SEZs when the GoI had formulated the SEZ policies. These EPZs enjoyed several concessions/incentives from the very beginning which were increased further in the later years. These are also nearly duty-free enclaves. Some sort of labour laws were there but de-facto only in papers. Though these EPZs enjoyed fabulous discounts/incentives, the share of exports of these zones is a mere 5% of total exports of India. In the last five years the exports of India are growing at an average rate of 20%. In spite of this ‘spectacular’ growth, the share of exports of India in world exports is a mere 1% increasing from 0.8% in the last five years. [1] These figures amply testify that to occupy a ‘respectable’ position in the world export market (where China has a share of 8% just only second to USA; India being at the 31st position), India has to run with an extraordinary speed.

To take part in this marathon race, the ruling classes of India formulated the SEZ policies. Some important part of it is given below:

a) The SEZs of India are of three types: 1. Multi-product SEZs occupying minimum 1000 hectares of land (in 5th April the maximum limit of these zones is earmarked as 5000 hectares); may produce garments to automobiles; 2. Sector-specific SEZs occupying minimum 100 hectares of land, e.g., garment- , leather- , electronics-SEZs etc; 3. Gems & jewellery, IT-ITeS-BPO & biotech-SEZs occupying minimum 10 hectares of land (may be reduced to 4 hectares in special cases). Backward states have options of relaxation of minimum criteria of land. (Taking 1 hectare = nearly 2.5 acre, one can comprehend the real sizes of the SEZs.)

b) The country is divided into two territories; one of which is SEZ and another is ‘Domestic Tariff Areas (DTAs). The area outside of the SEZs is DTAs where the laws of the country will be applicable. On the other hand, in the SEZs the laws & courts of the country may be applicable only partially. In fact, The SEZs will enjoy special laws. The Act on SEZs clearly states: “An SEZ… is like a foreign territory within a country”.

c) Private developers can build the SEZs and fabulous incentives will be provided for them. Even the local contractors/promoters can also enjoy the same benefits. ‘Processing units’ set up in the SEZs will also enjoy several incentives/concessions. The state governments can build SEZs themselves according to their wish.

d) Minimum 35% of SEZs must be ‘processing area’ (i.e., industry/factory/projects including infrastructures). Rest of the 65% area will be provided for developing housing complexes, hotels, restaurants, hospitals, shopping malls, entertainment centres, multiplexes, playgrounds, and even golf courses, etc. It is clarified that each of the SEZs will be a ‘township’ which is developing in Maha Mumbai, Navi Mumbai or near Gurgaon of Haryana (the area of which are near to that of greater Delhi or greater Mumbai). To douse the flames of resistances and protests developing against the SEZs and land-acquisitions, and to silence some critiques, on 5th April, it is announced by the GoI that the minimum ‘processing area’ in the multi-product zones will be 50%. It is added that in “special cases” these restrictions may be relaxed. Interestingly, the term “special cases” is not explained till now.

e) It was decided earlier that the developers/promoters would be provided land of any sizes by the state governments. Land will be acquired by Land Acquisition Act (1894) of British colonial era. Under the protests developing all over the country, it is declared that the developers will have to buy land on their own.

f) The (fiscal) incentives given to the developers of the SEZs are as follows: The developers will get income-tax exemption for a block of 10 years in 15 years at the option of the developers; Imports/domestic procurement of goods for development, operation and maintenance will be duty-free; Exemption from service tax. The (fiscal) incentives given to the industries/enterprises operating within SEZs: 100% income tax exemption for a block of five years, 50% tax exemptions for two years; Exemption from excise duty on procurement of capital goods, raw materials, consumable spares, etc. from the domestic market; Exemption of import duties on the same if exported from abroad without any license or specific approval; Exemption from service tax, state sales tax, octroi, mandi tax, turnover tax, and other duties/cess or levies on the supply of goods from DTAs.

g) Other incentives: 100% FDI in manufacturing sector through automatic route; Exemptions from industrial licensing for manufacture of items reserved for small sector industries; Full freedom for subcontracting, including subcontracting from abroad and DTAs; The area incorporated in the proposed SEZs is free from environmental restrictions; Profits allowed to be repatriated freely without any dividend balancing requirement; Water, electricity and other services would be provided as required; Private generation, transmission and distribution of power in SEZs allowed; Developers are even permitted to build ports, airports, roads etc. at their requirement.

h) The goods sold by SEZs in DTAs will be regarded as imports in the DTAs. An example: Reliance Industries set up a new refinery in Jamnagar SEZ (Gujarat) and that could end up ‘exporting’ bulk of its output in DTAs (or India). Hence, the people of India (DTAs) have to cough up import duties to buy the Reliance petrochemical products.

i) In these SEZs all the units will be declared as ‘public utilities’ where existing labour laws will not act. Besides this, the state governments can enact new labour laws for the respective state-SEZs which were already done in Maharashtra, Gujarat, Tamilnadu and UP. Hire-and-fire, employing casual and/or contract labour under any conditions will be allowed. The workers/employees are stripped off the rights of strike.

j) A ‘development officer’ will govern the SEZs. This non-elected officer will govern each inside-affair of the SEZs including the municipal, labour etc. According to a bourgeois analyst, “democracy” or “bureaucracy” nothing will be applicable here. The law of the ‘mainland’ India may be applicable partially. In fact, there are no words about any criminal courts in the SEZ Acts though provisions of civil courts are present. A special security force will look into the internal security of the SEZs. It is not clarified whether the police forces of ‘mainland’ India can interfere here.

Besides these, the ruling classes of India have more plans which will have dangerous implications for the country if implemented. Few months ago the bureaucrats and big business houses of Gujarat held a meeting in which a proposal was passed to make whole of the province of Gujarat a single SEZ. This proposal was sent to GoI for discussion. In the mean time, Narendra Modi (the CM of Gujarat) and some big capitalists went to Japan and proposed to make the entire Gujarat as a “country-specific” SEZ with the patronage of Japan. [2] Is a neo-colony developing?

This outline of the SEZ Act amply clarifies what amounts of incentives/concessions are being offered to the domestic and foreign capital. This is also vivid how several ‘foreign enclaves’ are to be created within the ‘mainland’ India to make tax-havens for the big domestic and foreign capital. In the SEZs, the ‘sacred’ ‘Law’ and the ‘Constitution’ of the country are overlooked and this also have a political aspect also. But we are not discussing this aspect here. It is interesting that in the name of building ‘foreign enclaves’ within the country each state government and parliamentary parties raise the hue and cry about ‘industrialisation’ and ‘development’. They are promising the people of ‘better future’. It is being declared that billions of dollars will be invested; more than four million of jobs will be created, etc. Even the state governments are promising high. It is claimed that only Navi Mumbai will create three millions of jobs. Will these promises be fulfilled? Even the bourgeois pundits are not sure. Though the critical analysis made by them has a definite class-angle, their criticisms have some noteworthy points.

Salient points of these criticisms are: Though the export-led industries in the period of ‘reforms’ after 1990 had been given massive exemptions and incentives, exports had grown marginally. Even the EPZs could not deliver the desired results. On the other hand, the exports of China have been increasing by leaps and bound and reached 8% of the world-exports. Moreover, the share of Chinese SEZs are 23% of all China-exports (in Philippines it is 50% and in Indonesia or in Thailand it is more than that). Hence the question developed: Will the Indian SEZs deliver? The SEZ projects may have some sinister designs hidden under the carpet.

Secondly, China has 6 SEZs in total whereas India has approved 403 SEZs and 650 applications in total have been submitted till October 2006 (more are coming). Are these large amount of SEZs required? What are the real interests behind this mammoth approval of SEZs.

Thirdly, the government of China built their SEZs and the modern infrastructure investing huge amount of public capital whereas the GoI has withdrawn himself from this responsibility and handed over this to the private real estate developers giving unbelievable sops. But who will invest in the industries/units in the newly built-up SEZs? If to draw huge amount of foreign & domestic capital is the sole motive, why are 65% (now 50%) of the SEZs gifted to the developers for ‘non-processing’ activities? Is it not a real estate scam?

Fourthly, it is reported in the media that more or less 70 SEZs are slated to be operated within a short time (which has no ‘land-disputes’). These SEZs will have to get Rs. 1 lakh 75 thousand crores [100 crore = 1 billion] or Rs. 1.75 trillion [approximately $39 billion] of investments within 2009-10. But for these SEZs the GoI will have to lose more than Rs. 1 lakh 2 thousand crores or 1.2 trillion due to exemptions! [3] What will happen when all of the SEZs are functioning?

To give proper merit on these questions we have to go through the experiences of Chinese SEZs which are emulated and imitated by the ruling classes of India.

What really happened in China?

The ruling classes of India, with the support of the imperialist patrons are claiming loudly that China has ‘progressed’ so much because it started its programmes of ‘reforms’ in 1979 whereas India had started it only in the early nineties of the last century. If India takes more measures of ‘reforms’ and several ‘tough’ steps right now, it will also be ‘successful’ to develop an ‘export-led’ economy like China. Are these logic and/or statements of the ruling classes of India correct?
This is well known to all that in economic terms China was well behind India in 1947 when India gained its ‘independence’. Not only China, the countries like (present) South Korea, Taiwan were well behind India at that time. But after the World War II, under the direct intervention of US imperialism, drastic programmes of basic land reforms had been taken in South Korea and Taiwan (along the Junker path and from above). Due to these reforms, these countries not only caught up with India quickly but also overtook it rapidly (though in the Junker path or path from-the-above dictated by imperialism). Though the ‘export-led’ growth had a remarkable ‘success’ in these countries, it is to be remembered that these countries could surge ahead so rapidly due to the development of capitalism, accumulation of capital and internal markets (though heavily depending upon the US imperialism) mostly as a result of the basic land-reform measures taken in drastic way.

It is also ‘forgotten’ by the ruling classes of India that China also performed basic land reforms programmes though in a revolutionary way. For this reason (accomplishing land reforms in a new-democratic revolutionary path), China overtook India and surged far ahead than India. This could be accomplished by China in a rapid manner because it uprooted the feudalism and control of imperialism from the Chinese soil in a revolutionary way. So China was placed in 1979 on a solid foundation when it started its journey along capitalist road openly. This has not happened in India. India has taken a complete different path to that of China taking the half-hearted measures of land reforms in a bureaucratic way (from above) with an explicit understanding with feudalism and imperialism. Even the path taken in South Korea and Taiwan was not taken in India (imperialist-dictated reforms to counter & halt the march of communism and revolutionary movements) for several reasons. As a result, the development of capitalism in India is going on but very slowly; it is advancing, but in a limping and painful manner (with the bourgeoisie having an understanding with feudalism and dependence on imperialism). Hence, the desire of the ruling classes of India to accelerate its ‘economic growth’ to catch China must be fallen flat as China is running with full steam along the path of capitalist development completing its democratic revolutions. Many learned people and pundits have forgotten this bitter fact.

Moreover, another bitter fact must be mentioned here. The engine behind the ‘miracle growth’ of China is not its ‘export-led economy’. In fact, the exports have served only a partial booster to the China’s economy. A strong internal market developed within China is in fact the real motive force behind the ‘development’ of China as elaborated in the next discussions.

The line adopted in the 11th Congress of the Communist Party of China held in 1978 to move along ‘capitalist road’ is the forerunner of the SEZs in Chinese soil. Within 1980, 3 SEZs had been built in the province of Guangdong whose geographical locations are very much strategic — Shenzhen (near Hong Kong), Zhuhai (near Macao), & Shanton (a major home of overseas Chinese). Another was set up at Xiamen in Fujian province (across Taiwan). During the 1980s two more was installed one of which was the largest covering whole of the Hainan Island. It is notable that all of these SEZs are located along the coastline which have easy access to sea transports over centuries and are very near to Hong Kong & Taiwan. In 1984, enthused by the experiences the SEZs were extended by opening fourteen coastal cities to FDI. Moreover, several economic and technical zones were installed in different cities & provinces. In 1985, three coastal areas (Pearl River Delta, Fujian Delta, and Yangze Delta) were opened up making them as free Economic Zones offering special incentives to FDI. Further, whole of the Shanghai city and adjoining areas were also opened. Before the beginning of 1990s, these tasks had been almost completed. [footnote 2]

It must be noted that the Government of China did not set up these SEZs with the aim of developing ‘export-led economy’. Rather the real motivation behind these ventures was to attract foreign capital to ‘progress’ along capitalist lines. For this reason, the SEZs were installed near Hong Kong and Taiwan enabling them easy access to capital, information, technology, management know-hows, communications, transport, etc. Primarily, the non-resident Chinese of Hong Kong invested massive amount of FDI in these zones (almost 60%). The primary motivation of these FDI coming from Hong Kong and Taiwan firms was to sub-contract the products in the Chinese SEZs with a goal of re-export [4] and also to sell the products in fast developing Chinese markets. Hence, the geographic locations of the Chinese SEZs acted as a booster for their ‘development’.

Several incentives & concessions were offered gradually to attract FDI. Some of which are: a) At first FDI was attracted only in joint sectors; later opening of wholly-owned foreign private units were encouraged with full steam. b) The provincial governments were given vast autonomy to attract FDI. c) Exemptions from export & import duties and from after-tax profit remittance were allowed. d) Other tax-rates were 15% which was withdrawn totally in later phase. e) Foreign personnel had to pay no taxes. f) Wages were 75-80% lower than Hong Kong. g) Free movement of labour from other regions was fully opened. h) Strikes were prohibited in 1982 in mainland China which was extended to SEZs also; Labour Laws concerning minimum wages & 8-hour day are frequently violated; temporary contracts are made with individual labours for particular orders of exports. (The labour conditions are similar to the ages of ‘Charles Dickens’.) i) Flexible environmental clauses. k) Easy access to huge raw materials. l) Low costs of construction. m) Strong internal markets, etc. [5]

It is mentioned earlier that primarily FDIs came from non-resident Chinese of Hong Kong, Taiwan, & Macao. From the mid-1990s, large amount of FDI was being poured in from Japan, USA & European countries [footnote 3]. The nature of this trend of FDI will be explained by the following facts. During the period of 1960-70s — well before the installation of Chinese SEZs — the EPZs were set up in South Korea & Taiwan on a large scale. These EPZs were used as export-base of TNCs. The products were sold mainly in the US, Japan & European markets not barring the growing home-markets of those countries. As the wage-level in those EPZs became ‘uncompetitive’, foreign capital (including the capitals of S. Korean and Taiwanese origin) were flown to the low-wage EPZs of Indonesia, Thailand, Mexico, etc. Within two decades the labour of these zones became costly as these countries ‘developed’ further. Hence the next destination of FDI became the soil of China where labour was cheaper in compared to those countries [footnote 4]. As a result, from the mid-1990s, Chinese SEZs became advantageous for FDIs. Therefore, barring the geographic locations of the Chinese SEZs, cheap labour became the powerful magnets of FDI. [6]

In the meantime several measures of capitalist reforms were undertaken which propelled the ‘development’ of China. From the beginning of the decade of 1980s, the rural communes were being dismantled. Opening of sale of agricultural commodities in the market was allowed. By 1983, 98% of the all peasant households were operating according to the new system. [7] Due to these massive reforms undertaken in agricultural sector a huge unemployed labourforce was created in the countryside over 100 million of them have became part of the massive migration to the cities—seeking work in construction sector and in the dirtiest and most dangerous jobs outside and within the SEZs [8] (they are called as ‘mingong’ in Chinese). Many bourgeois analysts called these incidents as ‘long march’. At the demise of the communes, a new system of rural industries (‘Township & Village Enterprises’ or TVEs) had been developed by the initiative of Chinese government in which 25 million of workers were engaged in 1993. During the 1990s, these TVEs were either beginning to crumble at the altar of the ‘market-economy’ or being privatised. [9] Most of these were bought up by the managers and top officials of the said enterprises (most of these new entrepreneurs were either the members or close persons of the CPC). Thus, not only a large unemployed labour force had been created but also accumulated massive amount of capital in hands of these elite sections of the society. The state-run industries and enterprises were also undergone ‘reforms’. These mostly became bankrupt and eventually crumbled facing the competition of industries run by private and foreign capital. Soon started the process of privatisations and large numbers of workers were laid-off. Through these processes of ‘reforms’ of the whole economy along capitalist lines a new class of entrepreneurs had been emerged mostly comprising of the old managers-officials and leaders of the CPC. Therefore, one the hand, a new capitalist and/or entrepreneur class was developed; and on the other, large masses of cheap unemployed labour-force developed. A Government of US commentary said: “For the United States, China is now its 3rd largest trading partner (2005), its 4th largest export market and its 2nd largest source of imports. Many U.S. companies have extensive manufacturing operations in China in order to sell their products in the booming Chinese market and to take advantage of low cost labour for manufacturing products for exports . These operations have helped U.S. firms remain internationally competitive and have supplied U.S. consumers with a variety of low cost goods.” [10] In fact, a big market was created within China which is far larger than India. [footnote 5] These consumers were the real purchasers of the products of the industries set up in the mainland China and in the SEZs. Actually, the 50% of the products of the Chinese SEZs are exported and rest of the products are being sold in the domestic market. [11] Hence, the claim that China has ‘progressed’ so far solely depending upon its ‘export-led economy’ is absolutely wrong. China is able to leap ‘forward’ on the basis of its capitalist development triggered by the democratic revolution accomplished in the past. On the other hand, India, where vast remnants of feudalism still remain along with overwhelming dependence on imperialism, cannot run fast as China.

Export-led economy in India?

It is clear from the above discussions that the internal market of China is far bigger than India which is acknowledged by the above-mentioned US report (“fourth largest market of US commodities”). It is also clear from the same report that China is now a solid base of manufacturing exports of the US companies. The share of exports in China’s national economy has surpassed quickly not only that of India, but also of other countries. This spectacular ‘success’ of China is not solely dependent on its SEZs. It has been discussed earlier that the share of exports from SEZs is 23% of total exports. Rest of the exports owe to the mainland China.

Here are some facts: Firstly, exports of China were 34.3% of its GDP in 2005. Exports were far bigger in the export-led countries such as Thailand (61.8%), Malaysia etc. whereas in India it is a mere 13.1% and the growth of it is much slower than these countries. [footnote 6]
Secondly: The above-mentioned US report shows that the US manufacturing companies located in China have a large market within China. Moreover these US companies use China as a backyard of manufacturing exports. In fact, manufacturing is the main basis of China’s industry. If manufacturing becomes the basis of the economy of a country — it is widely acknowledged even by the bourgeois economists — the ‘development’, exports, generation of new employments, etc. will also grow on a large scale. But India has a poor record in this manufacturing sector also. In 1990, manufacturing had a share of 17.1% of GDP. In the fifteen-year period of ‘reforms’ this share came down to 15.9% in 2005. On the other hand, manufacturing in China had a share of 37% of GDP in 1990 which was grown to 41.8% in 2005. [footnote 7]

In 1979, primary products were the main composition in exports of China. By 1990 manufacturing became 80% of Chinese exports. [12] By 2005, it was grown further to 93%. [13] On the other hand, the share of manufacturing in the total merchandised exports of India is reduced from 74.7% in 1995-96 to 70% in 2005-06. [14]

In the mean time drastic changes occurred in the composition of manufacturing exports of China. In 1990, the manufacturing exports of China were composed of low-tech toys, shoes, garments, leather-products, etc. By the end of 1990s, these manufacturing exports became overwhelmingly high-tech (electronic goods & chips, computer parts, automobiles and spares, etc.) [15] On the other hand, the manufacturing exports of India are predominantly low-tech (gems & jewellery, apparels etc.). Therefore, China is not only far ahead than India in manufacturing, exports, & FDI, etc. but also they has transformed their industrial products immensely from low-tech to high-tech. [footnote 8]

It was observed earlier that huge amount of FDI are being invested in China each year. The foreign capital occupied 57% of the export-led industries in China [16] (including the mainland China & the SEZs). India is far lagging behind China either in total FDI and FDI in export-led industries. During the last few years there were sporadic spurts in FDI & FII flowing in India. SEZs policies can also boost this trend further. But these foreign capitals are unlikely to be invested considerably in manufacturing. The condition for this investment in manufacturing is nothing but development of the internal market or in other words, the development of capitalism in large scale (which is in fact going on slowly and in a limping manner). China had accomplished democratic revolution and basic land reforms long ago which was its basis of capitalist development.

SEZs in India: What is waiting to be happened?

In the above discussion regarding the SEZ policies of the ruling classes of India, two salient points are raised by us: 1) SEZs are designed to offer more concessions/subsidies for the big capitalist classes as well as for the imperialist capital; 2) SEZs are for the total de-regulation of any labour laws (including the ‘right’ of hire-and-fire, random application of contract and cheap labour).

It is also observed in the above discussion: Though trying to emulate China in this respect, except in flexible labour laws and concessions/subsidies given to the capitalists and/or TNCs, India is far behind than China in other aspects. India has a much smaller domestic market than China. Moreover the geographical locations of the SEZs of India will not enjoy the advantages that of China (located near to Taiwan, Hong Kong, etc.). Rather the GoI are going to set up 57 & 23 SEZs in landlocked Haryana & Punjab respectively which are far away from the nearest coastline of Gujarat. Another scandalous fact: The SEZ Rules of India nowhere mentioned that the SEZs have to export their bulk of the products in the overseas markets. When questioned, it is reported that the GoI “is toying with a proposal to introduce ‘export obligation’ for SEZs so that serious players remain in the field… and revenue loss due to tax concessions be stemmed”. [17] Will it be happened? If the units set up in the SEZs fail to compete in the overseas market there are a strong possibility of their closures/insolvency as the growth rate of the domestic market remained sluggish.

Interestingly, out of 237 SEZs, which are approved formally, 148 or 62% SEZs are IT, ITeS & BPOs, 28 (12%) are textile/apparels, and 17 (7%) are electronics SEZs. Moreover, out of the 160 SEZs, which are approved in-principle, half of them are IT, ITeS & BPO SEZs. Therefore, out of the approved SEZs (403) till October 2006, more-or-less 55% are going to be IT-related SEZs (besides this, a substantial amount is slated for low-tech textile/garment sector). We have discussed earlier only on the composition of merchandised exports of India. In fact, at present, a bulk of the exports of India (in value terms) is IT services (of $24 billion in 2005).[18] Therefore, the new SEZs will only consolidate the trends of IT exports in place of the exports of manufacturing. It is funny that these export-led IT services are enjoying no-tax benefits during the last ten years. They are mainly located in 47 ‘Software Technology Parks’ (STPs) where 6500 IT units had been set up. Out of these IT service providers (and exporters), there are five biggest IT houses which are enjoying tax-rebates of Rs. 1000 crore per annum.[19] By 2009, scope of tax-holidays for these STPs will be terminated. For this reason, the IT units are beginning to scramble to the SEZs. Moreover, after the declaration of minimal taxes (MAT) on the exports of these IT companies in the budget of 2007-08, these IT behemoths are making hue and cry to relocate to the SEZs. Interestingly, these IT companies have recruited just 1.8 millions of super-tech jobs.[20] Hence, it is crystal-clear that these IT SEZs cannot absorb the ocean of unemployment in the country.

Nevertheless, the sops and concessions offered to the SEZs may attract investments. But it is ironic that these concessions will attract the existing industries/units located in ‘mainland’ India. These existing units will have to show only expenditures on new machineries and/or new investments (which must be 20% of the Company’s fixed assets). Hence, in the near future the old units of ‘mainland’ India may relocate to these SEZs. Another trend is developing ominously. The POSCO of Korea applied to set up an iron & steel unit in Orissa in 2005. After the declaration of SEZs Rules in February 2006, they rushed an application for SEZ status and were approved by the GoI. The TATAs grabbed land in Gopalpur of Orissa in 1997 under the cover of state-terror perpetrated on the peasants and fishermen. After the acquisition of land the international prices of steel crashed and the land acquired was lying vacant. The peasants/villagers demanded their land back. But the TATAs also applied for SEZ status which was quickly granted by the government.

Ominous signs

But there are more factors behind the SEZ policies of the ruling classes of India (barring the rebates on taxes and absence of labour laws). One of these factors may lead to a massive scandal. This scandal is waiting to be happened in the ‘development’ of SEZs. Some bourgeois economists also have expressed their anxiety about the possibility of failure of the SEZs where enough investments may not come to set up units/enterprises for business. They apprehend that these ‘development’ projects of the SEZs are going to be a “real estate scam”. In the mean time some of the biggest real estate TNCs of Singapore, USA, UAE, etc jumped to the business of SEZs. Dubai-based real estate baron Emmer Group has secured the contract of developing 10 SEZs. George Soros, the world’s wealthiest speculator, is also landing India. Besides this, the real estate wings of the domestic big capitalist houses (Ambani, Tata, Baba Kalyani, DLF, Mahindra & Mahindra, Godrej, and even the IT-famed Infosys) jumped into this lucrative business to make quick bucks. These real estate barons are now busy to grab lands from the peasants/villagers with an unprecedented aggression. According to a source, initially 4 lakh acres of land will be acquired all over India which is four times the size of Mumbai and double the size of Hong Kong [21] . [footnote 9] In this process, random and aggressive speculation on land is going on. It is estimated that between Rs. 40 thousand crores to 2 lakh crores of cashes will be flowing in the whole transaction.[22] Thousands of hectares of land are now being acquired at far below the market-prices using the muscles of goons and even by applying massive state-terror. But the peasants/villagers are trying to resist this state-violence in most of the cases. If failed (as in Nandigram in West Bengal), the real estate barons (in collusion of the state) rush with cashes and sops to lure the oppositions what has happened in Gurgaon of Haryana. The Ambanis have purchased the ‘gram-pradhans’ (heads of the village) and employed a good number of agents distributed in several tiers to break the resistance with cashes in Haryana. In Raigad of Maharashtra, facing the strong resistance built up by the villagers and the fishermen, the Ambanis are now offering sops of lucrative compensation, rehabilitation, promises of jobs to break that resistance. Even the probable land losers are promised with offers of certain percentage of share in the SEZs. The governments also are reworking their resettlement & rehabilitation packages more attractive. Thus, big businesses and speculations are going on in name of developing SEZs.

The changes brought in the SEZ policies on 5th April will do nothing but strengthen the speculation on land purchases. According to the new policies, henceforth, the state governments will not acquire land for the purpose SEZs to save their skin from the growing unrest among the land-losers. In fact, the acquisition of land will be done now by the speculators/agents of different sizes with nefarious connections with the big real estate barons of both domestic and foreign origin.

These speculative activities are connected not only with the purchase of land but also with buy-and-sale of real estate properties which are to be developed in the SEZs. The SEZs rules approved that the SEZs must be ‘separate townships’ in which roads, ports, airports, housing complexes, power generating stations (including shopping malls, hospitals with modern facilities, hotels, entertainment centres) may be built by the developers and run on commercial basis. A SEZ-corridor is being built up between Delhi & Mumbai with funds from Japan. Who will control this corridor? Is it Japan or GoI? In fact, the SEZs are giving a massive booster to the real estate businesses. A recent survey of ASSOCHAM projects that “the real estate market will grow to US$60 billion by 2010 from the present $16 billion” in which “FDI’s share” will be considerable “because of global real-estate players [are] hugely interested in the Indian market”.[23] The GoI opened the construction sector for 100% FDI in 2005. Since then there are huge spurt of FDI in this sector. In 2003-04, FDI in Indian real-estate was a mere 4.3% of the total FDI. By 2006-07, it has been grown to 26.5% of total FDI.[24] Another report said that the most of the foreign investment in the Indian real-estate market will come in the form of portfolio investment (FII). It is expected that these investment will extract a minimum 20% return (which is decreased to 4.5% in the markets of Japan & Europe). Nearly 50 FII funds are going to invest nearly $15 billion.[25] Moreover, the public sector banks are beginning to expose more and more in the property markets. Between 2004-05 & 2005-06 the debt given out by these public sector banks in real estate markets was grown by 77% making the total debt in this sector to 11% which was very much ‘sensitive’ declared the Reserve Bank of India (RBI).[26] Alarming at this level of risk in the real estate sector, the RBI has declared recently that ‘development’ of SEZs will be treated as real estate business and the banks will take extra caution in lending the developers of the SEZs.

It is well known that one of the factors behind the ‘sudden’ downfall of the economies, mass bankruptcies of many renowned companies, crashes in the stock markets, sky-rocketing inflations, etc. occurred in 1997 in the south-east and east Asian countries were due to the ‘crony’ capitalism developed around ‘real-estate’ boom. Billions of dollars were being invested by the speculators taking ‘bad loans’ from the banks to set up office-buildings, townships, housing complexes, etc. which were lying vacant due to fall in demands. Within few days the foreign portfolio investments had been vanished. The banks were collapsed. The people of these countries paid the price of this disaster in real life. Even in China, early signs of stagnation are observed recently in the property markets where real-estate boom had reached astonishing height during the last ten years. A hardcore ‘reformist’ editor of the Economic Times commented on the Indian SEZs: “The SEZ bubble will burst, and it will be a large explosion”. [27]

Hence, the SEZs of India are big bonanzas in the form of speculation and profiteering for the big capitalists and foreign investors (both FDI & FII). Their real interests lie in the speculation of lands and real-estate businesses developing in the name of SEZs. In fact the current destinations of the imperialist finance capital are the ‘booming’ real estate market of the world. This recent feature of finance capital is being elaborately discussed and analysed within the Marxist as well as bourgeois circles. So, we are not going into the details about this recent trend of finance capital. In short, real estate market in Japan & Europe is squeezing fast and also the rate of return is decreasing. Moreover, the real estate market of Indonesia, Malaysia, Taiwan, Singapore, South Korea, etc. is either in a glut or in a gloomy situation. Thus, the next lucrative destinations of the finance capital are the ‘emerging’ countries of Asia of which China is the most attractive and is swallowing massive amount of capital in its real estate market for the last ten years. According to these investors, India has also a big ‘potential’ in this respect, particularly in the ‘development’ of the SEZs. Hence, the global real estate majors along with the domestic realty barons jumped into the bandwagon.

Thus the Indian economy is going to be dependent more and more on the international speculative capital and/or imperialist finance capital. What happened in east and southeast Asia in 1997 or the course of ‘development’ taken at that time in those countries were named as “crony capitalism” by the bourgeois experts. Interestingly, the PM of India hinted the chance of developing ‘crony capitalism’ on and around the SEZs in a discussion organized by CII. [28]

SEZs and the working people

It is clear in the earlier discussion that the majority of the SEZs will be IT, ITeS and BPOs. After the reductions of quotas on certain commodities (e.g. garments & textile) under the dictum of WTO, it may be possible for some export-led textile/garment companies to flourish in these SEZs. But these low-tech textile-related manufacturing SEZs cannot be growth-engines of the industrialisation in India. The Indian big bourgeoisie are also optimistic about the development and exports of automobiles and auto-parts. But this market is already dominated by high-tech products of China. In the above discussions it is observed that the high-tech components in the manufacturing facilities in India are abysmal. Hence these types of SEZs may create some semi- and low-skilled jobs only.

Moreover, the SEZs developed emulating the ‘Chinese Model’ will aggravate the miseries and exploitations of the toiling people of India. The march of SEZs policies of the ruling classes of India already initiated bloodsheds in the countryside through forced land-acquisition. Millions of peasants, labourers, bargadars, ryots, tribals and other people – dependent on agricultural activities in any form – are being uprooted with violence. The ruling elites of China are pioneers in this respect. During the last 14/15 years – particularly along coastline of China – where SEZs and other zones had been established – and where cities of ultra-modern facilities are developing on a rapid scale – the peasants were uprooted ruthlessly. Thousands of protests of the peasants of China were dealt with state terror perpetrated by the armies, police-forces and thugs hired by the neo-capitalists of China. In 2005 alone, 87,000 peasant unrest shook China and most of these unrests were linked with the incidents of land-grab for the so-called development. [29] According to the deputy minister of finance department of China government, the half of the mass-incidents occurring in Chinese countryside were related with land acquisitions.[30] In the last 20 years, 16 million acres of land had been grabbed for SEZs, ‘urbanisation’ and ‘development’.[31] In these twenty years period developed the SEZs along the coastline of the province of Guangdong, established the high-tech cities of Pudong and Yangee which were the former land of thousands of fishermen and peasants. These lands had been grabbed before the bayonets of the armies. This is the ‘China Model’ followed by the ruling classes and parties including the CPI(M)s, etc.

On several occasions beforehand and particularly after the genocide in Nandigram, the leaders of CPI(M) lectured the ruling classes of India to emulate the ‘Chinese Model’ strongly. The Chinese SEZs are loudly projected as ‘Model’ to be followed by these leaders. What are the conditions of the working masses in the SEZs of Chinese brands? There is existence of labour laws in these SEZs – but only in papers. In most of the cases, these laws are being violated. The labour condition existing in these SEZs remind the Dickensian age or the ‘Conditions of the working class of England’ written by F. Engels. Some of these are as follows: [32]

a) 12 hours work in place of 8 hours; in most of factories/units overtime of 4 hours are mandatory. 7 days of work in place of 6 days. Contracts of jobs depend upon the orders received by the management. In the peak season there are instances of 24-hours of work. Many workers become senseless on the floor of the workshop due to overwork; and even die.

b) Employments are available according to orders. After the expiry of the orders, the workers are retrenched.

c) Workers are collected from pool of (100 million) labour coming from countryside since their labour power are remarkably cheap. 60% of the workers engaged in the SEZs are female aged between 15-25 years who are cheaper than the male workers. Most of the female workers have not right to be pregnant. If so, they are retrenched.

d) Each worker has to sign a contract form at the time of joining. But most of the workers do not know what are written in these contract forms giving more leeway of exploitation and deprivation. A certain amount of money must be deposited in hands of the managers/owners of the units at the time of joining lest they should run away. Many of the workers want to flee due to unbearable workload and torture meted by the supervisors and security forces. There is no scope of taking extra holiday. If taken they are retrenched.

e) The wages are very much low (discussed earlier). The wages are one-seventh of the US level.
f) Workers have to sleep in dormitories with little space to move. Most of these dormitories are abysmally unhygienic. The meal allotted (for which a part of wages is deducted in most of the cases) to them cannot feed them properly. Health of most of the workers breaks due to overwork. Female workers, when they reach 25 years, are retrenched generally citing the cause of ill health. The male workers are exhausted before 30-35 years of age. These workers return back to the villages where uncertainty and poverty loom over them. They have ‘rights’ of getting pension after retirement – but only in papers in most of the cases.

g) There are no environmental standard in these SEZs. Workers are forced to work in unhealthy & unhygienic conditions. Industrial accidents are regular features. In most of the cases the owners of the units do not take any responsibility of the treatment of these workers. Even the government sheds its responsibility in many occasions.

h) In spite of these hazards, the workers are forced to toil according to the orders and/or contract because same conditions prevail in other units/SEZs. Moreover, a huge unemployed labour force is waiting to take his place.

These are the standards of the SEZs of ‘China Model’. This ‘model’ clearly narrates the impending future of the waiting for the working masses engaged in the Indian SEZs.

In sum: The SEZ policies advocated by the Indian ruling classes in name of ‘industrialisation’, ‘development’, etc. are nothing but means of plunder and exploitation. The dependence on imperialist finance capital will accelerate through these SEZ programmes. The capitalist development of India that is ‘progressing’ in a limping manner (in Junker path from above) will go on as before. Moreover, the lives of millions of working people and people of countryside will be jeopardized more vigorously as happened in China.

Footnotes:

1. In March 2006, a document prepared in the apex summit of the US-India business forum, “sees new possibilities in building Special Economic Zones (SEZs) to cater to overseas as well as domestic markets”. It also stressed on US investments in these zones and Indian markets. Moreover, this meeting visualized India as a frontrunner in the near future as a strong economic force. For these ends, some recommendations/directions were given to the Indian counterparts.
2. In 2003, these open zones had an area of 20% of China and were residents of 450 million people (almost equals to the residents of 25-member EU). The GDP of these zones were $630 billion (40% of total GDP of China). [Source: Asia Times Online, 25.01.05]

3. Between 1979 and 2005, FDI of $633 billion came to China in total. The leading investors were Japan, USA, Taiwan & South Korea investing $53.3 bn, $51.1 bn, $41.8 bn, and 31.8 bn respectively. [Source: China’s Economic Conditions, 12 July 2006, W.M. Morrison; Foreign Affairs, Defense And Trade Division, USA]

4. Per hour compensation in manufacturing (in $) – USA: 21.3, Canada: 18, Mexico: 2.1, Philippines: 0.7, China: 0.7, India: 0.4. [Source: Beyond Cheap Labour: Lessons For Developing Countries, McKinsey Quaterly, 2005, No. 1]

5. Market of China is estimated at $550 billion whereas that in India is $150 billion. [Source: Dancing With Giants: China, India And Global Economy, World Bank]

6. Exports as percentage of GDP:

Country ————1990 ———–2001 ————-2004China ————–13.3 ————22.6 ————-35.9Indonesia ———-23.4 ————34.9 ————-27.8Malaysia ———–65.0 ————100.0 ————107.0Thailand ———–26.8 ————54.6 ————-58.7Philippines ———18.5 ————44.0 ————-45.0India ————–5.7 ————-9.3 ————–11.3
[Source: Development Indicators 2006, Asian Development Bank; www.adb.org ]

7. Exports as percentage of Manufacturing GDP:

Country ——————–1990 ——————– 2000 ————————— 2005
China ———————-37.0 ———————43.6 —————————-41.8
Indonesia ——————20.7 ———————27.7 —————————-28.1
Malaysia ——————-23.8 ———————31.1 —————————-29.4
Thailand ——————-27.2 ——————–35.6 —————————–34.7
Philippines —————–24.8 ——————–22.2 —————————–23.4
India ———————-17.1 ——————–15.6 —————————–15.9
[Source: Development Indicators 2006, Asian Development Bank; www.adb.org ]

8. High-tech components in manufacturing exports (%)
Country ——————————— 1990 ——————————– 2005
China ———————————– **** ——————————– 27
Indonesia ——————————- 1 ———————————— 14
Malaysia ——————————– 38 ———————————– 58
Thailand ——————————– 21 ———————————– 30
Philippines —————————— **** ——————————– 74
Mexico ——————————— 8 ———————————— 21
India ———————————– 2 ———————————— 5
[Source: Human Development Report 2005, UN]

9. According an estimate of the GoI (up to October 2006), approved 403 SEZs require nearly 1 lakh 75 thousand hectares (or nearly 4 lakh 37 thousand acres) of land. [Source: Update 13]

Source:

1. Business Standard, 04.03.20072. Economic Times, 26.03.073. http://www,businessworld.in/issue/news02.asp4. The Business Line, 07.05.20015. The Role of Special Economic Zones in As Compared with Asian Export Processing Zones; 1979-1995, T. Otai, Tokio University; www.iae.univ-poitiers.fr ; “China And Socialism”, Monthly Review, July-August 2004; Source 4.6. China And Socialism: Market Reforms and Class Struggle, Martin Hart-Landsberg & Paul Burkett, Monthly Review, July-August 20047. Do8. Conditions of the Working Classes in China, Robert Weil, Monthly Review, June 20069. source 510. China’s Economic Conditions, 12 July 2006, W.M. Morrison, Foreign Affairs, Defense And Trade Division, USA11. source 512. source 413.source 1014. Economic Times, 16.10.0615. source 3 16. Business Week Online, 22.08.0517. Business Line, 23.01.0718. Economic Times, 09.05.0619. www.indiataxsolutions.com20. Economic Times, 08.03.0721. www.businesworld.com22. Do23. Asia Times Online, 09.01.0724. Do25. Outlook Business, 20.01.0726. Economic Times, 19.02.0727. Economic Times, 05.08.0628. Economic Times Online, 26.03.0729. http://mews.bbc.co.uk/ ; 19.01.0630. http://www.asianews.it/ ; 31.01.0731. http://mews.bbc.co.uk/ ; 07.03.0632. These data are collected from different websites. See also the sources 6 & 8.

Land-Grab by Rich: The Politics of SEZs in India By Sanjay Sangvai

2007-06-21T11:04:00.000-07:00

The farmers in the obscure Pen tehsil in Raigaddistrict Maharashtra are preparing for the long battleagainst the gigantic and powerful company theReliance. On June 22, a few Mumbai-based Marathinewspapers carried the news of the demonstrations ofhundreds of farmers against the land acquisition bythe state government for the Reliance company for a10,120 hectare Special Economic Zone (SEZ). There waspolice firing on the rally as some miscreants indulgedin stone throwing and damaging the property, which itwas later found that, was not done by the protestingfarmers.The Reliance company managed to create disturbance inthe peaceful meeting of hundreds of farmers and ourprocess of presenting objections to the LandAcquisition notices to the officials. The company isnervous about the growing resistance by the farmersfor usurping their productive land and thereforetrying to use the police to crush the movement toldArun Shivkar, of Pen Panchkroshi Sheti Bachao Samiti(Pen area Committee for Save the farmland).And as we know the reality of this company and theSEZ, the farmers will drive the company out and takeon the state government also for siding with thecapitalists instead of caring for the farmers fumedGanesh Thakur from the Samiti. Out of 10,120 hectaresland is earmarked for acquisition, 5720 ha. isirrigated from Hetavane dam, and large tracts belongto the salt pans or wetlands, mangrove very essentialsfor carrying capacity and sustainability of this area.The villagers now know fully well they are pittedagainst the formidable adversary the giant Reliance,which has just obtained 25,000 hectares land for itsown SEZ in Haryana, already took the governments inUttar Pradesh, Gujarat and Maharashtra and even the socalled the Left wing government of W. Bengal. It isspreading its wings in textiles, power, contractfarming, medicinal herbs, sugar industries and retailstores. They realize that the Company has enormoussway over the political, bureaucratic establishmentand the media. This company has been given the largestSEZ in the 42 villages in Pen-Panvel-Uran area, in thename of the activities like manufacturing, trading,services, processing, logistics, repackaging,warehousing etc.This is one of the 24 approved SEZs in the state, bothby the private parties (13) and the MaharashtraIndustrial Development Corporation (MIDC, 11). Thereare other 17 SEZs that are to be given approval (11private and 7 MIDC). These SEZs are part of the morethan 140 SEZs that are earmarked in almost all theparts of the country. According to the Uniongovernments handout, the SEZ is a specificallydelineated duty free enclave and shall be deemed to beforeign territory for the purpose of trade operations,duties and tariffs. In 2000 the Government of Indiaformulated the SEZ policy and in 2005 the SEZ Act wasmade. It came into force from February 10, 2006. Withthis one stroke, the corporate powers have corneredexemptions from almost every tax, while getting theservices of water supply, electricity, usurping thenatural resources, distorting the constitutionalsovereignty of the people.Waiving TaxesThe Maharashtra government formulated the SEZ policyin October 2001, to promote the establishment oflarge, self contained areas supported by the worldclass infrastructure oriented towards exportpromotion. Any private, public or joint company andeven the foreign company can set up the SEZ, whichwould consist of the industrial operations, serviceand trade. Both the policies emphatically declare tocreate the hassle-free environment for suchoperations, that is, exemption from all sorts of taxesviz: stamp duty and registration fees, cess or leviesincluding import-export duties, customs duties, salestax, excise, octroi, service tax, mandi and turnovertaxes. They can import of procure from domesticsources duty free all their requirements from capitalgood to raw materials, spares, packing materials,office equipments, without any license or specificapproval. They can procure/ import goods duty free toset up the units.Most important concession is the income tax benefitunder 80 1A to developers for any block of 10 years in15 years, exemption for income on investment ininfrastructure capital fund and the from electricityduty for 15 years in C, D, D+ areas and no-industrydistricts in Maharashtra and for 10 years in otherareas. They are allowed re-investment of ploughed backprofits and carry forward of losses. The units areallowed establish Independent Power Plants (IPPs), toproduce, transfer and distribute the power, fixtariffs in their own zones without any license. TheSEZ authority, the state government appointee is toensure continuous and good quality power supply andadequate water supply to the SEZs.These units can have 100% foreign direct investment(FDI) in the manufacturing. Off shore banking unitsare allowed in these areas and they are allowed 100%Income Tax exemption on profit for 3 years and 50% fornext two years. Individual investment in SEZ too isexempt from the Income tax. External commercialborrowing up to $ 500 m. per year is allowed withoutany maturity restrictions. The SEZ units enjoy freedomto bring in export proceeds without any time limit andhave freedom to keep 100% of export proceeds in theEEFC account and to make overseas investment from it.According to an internal assessment of the UnionFinance Ministry in 2005, the government had to forgoabout Rs. 90,000 crores in direct and indirect taxesover the next four years on account of the SEZs.Autonomy for Whom?The units in SEZ can sub-contract part of theirproduction process abroad or even to the domestictariff area. The developed is permitted to transferinfrastructure facilities for operation andmaintenance.The SEZs, except those product specific andport/airport based units, must have at least 1000hectares of area to set up SEZ. They have to set uptheir processing units in the 35 % of the earmarkedarea and they have full freedom in allocation of spaceand built up area to approved SEZs on commercialbasis. They are authorized to provide and maintainservices like water, electricity, security,restaurants and recreation centers on commerciallines.The SEZs are made free from the environmental andlabour laws and they are exempted from public hearingunder Environment Impact Assessment notification. Onthe contrary, SEZs are permitted to havenon-polluting industries like golf courses,desalinization plants, hotels and non-pollutingservices in the coastal regulation zone (CRZ). All theenvironmental clearance powers, particularly theclearances required by the Maharashtra PollutionControl Board, are vested in the hands of theDevelopment Commissioner, appointed for theadministrative supervision and solve the problem forthe SEZs.The SEZs have no responsibility to provide employmentto the people in and around the area. Reliance hadclarified that there would be no scope for theemployment for the local people, as most of the jobswill be skilled ones. However, any of the labour lawsand regulations will not be applicable to SEZs. Allthe powers of the Labour Commissioner shall bedelegated to the Development Commissioner of theparticular SEZ and a single point mechanism in SEZswill be provided to give all clearances andpermissions pertaining to industrial safety and otherregulations. The practice of hire and fire will bemade easier and nobody will be allowed to conductinspections without the prior permission of theDevelopment Commissioner of that SEZ. The Maharashtrapolicy aims to further exclude many services from theambit of the Contract Labour (regulation andAbolition) Act. And All industrial units and otherestablishments will be declared as Public UtilityServices under the provisions of Industrial DisputesAct!!The Maharashtra policy declares the SEZs as IndustrialTownships to enable the SEZs to function asself-governing, autonomous municipal bodies. Uniongovernment policy bluntly tells that, Governmentcontrols the operation and maintenance function of theGovernment controlled SEZs. In the rest, operation andmaintenance is privatized.Serious IssuesEven in the neo-liberal and government corridors, thesetting up of SEZs make no sense, as there are alreadymany schemes for promotion of exports like the ExportProcessing Zones, Export Oriented Units Scheme, ExportArea Intensive Area Sub-Plan, InfrastructureDevelopment Scheme for 93 no-industry districts. Theywill loose their attraction altogether once new SEZscome into being. The 47 Software Technology Parkswould suffer a setback; they would become unviable asmany companies would like to shift to the new SEZs.More important is the issue of the large tracts ofland at least 1000 hectares or even 80 hectares tobe given to the companies. According to senior tradeunionist Gajanan Khatu, These SEZs would beprivatized and autonomous townships. Instead of mereSEZs, they are Special Real Estate Zones. These SEZscan be used for anything from trading, entertainment,hotels, and housing projects. All the large builderslike City Parks, K. Rahejas, Hiranandani Builders,DLF, Marathon realty, Pan-India Paryatan, DewanInvestments are given hundreds of hectares.The SEZs will have their own security, operation andmaintenance rules and all environmental and labourclearances vested with the Development Commissioner ofthat SEZ. It is nothing but creating autonomousprivate regions; the local self governments will haveno authority over them, pointed Rifat Khan ofNational Center of Advocacy Studies (NCAS).According to Dr. Mukund Ghare, Director of AFARM,Pune, an organization for sustainable land and watermanagement, when there is a crying need to distributethe scarce water equitably between urban and ruralsectors and between the rich and poor, there is anapprehension as to how much water the SEZs will use?Who will own the water? How it will be used, whenthere is no environmental law applicable to the SEZ?This is nothing but an attempt to privatize water.It is appalling and illegal to permit the tourism,beautification, hotel, ports up to 12 nautical miles(22 kms) in the sea. There is a conspiracy to dilutethe CRZ, regularize the past violations and invite thelarge megatrawlers of the transnational companies. explained N.D. Koli, the Maharashtra leader of theNational Fisherpeople Federation (NFF).It is a government sponsored land grab by the richand powerful. Already serious land related issues ofLand Reforms or restoring the land rights of dali,oreksali lands in Konkan or on Adivasi lands in otherforest-land area. And here the government has beenallotting large tracts of lands, mostly by acquiringthrough Land Acquisition Act and passing it on to theprivate parties, charged Surekha Dalvi, a seniorlawyer and land-rights activist.When the government has been cutting the subsidiesfor the farmers, workers and middle classes, when itcannot assign a fraction of funds for rural employmentguarantee scheme, the public distribution system andgovernment procurement of food grains are beingdismantled, it is becoming clear who the belovedclass of the power holders is, remarked Ulka Mahajan,the national convener of the National AlliancePeoples Movements (NAPM). The people will not takeit lying down. They would unite wage a relentlessstruggle to defeat the forces that are out to snatchtheir livelihood and resources, she warned.Building ResistanceThere is no question of increased compensation forthe land we just do not want to give our land to theReliance, that was the spirit of the meeting held onJune 24-25, hosted by the Samiti and the NCAS, atBardawadi near Pen. The meeting, attended by variousorganizations in Konkan region along with therepresentatives of NAPM, Peoples Political Front(PPF), and Shoshit Jan Andolan resolved to intensifyand widen the struggle against the SEZ, by involvingthe affected people in other parts of Maharashtra andIndia.. A detailed campaign against the Reliancesmoney power and the SEZs as a whole was planned.The peoples movements from various parts of thecountry under the aegis of the NAPM, in the recentlyheld Bangalore convention, have decided to take up theissue of the SEZ and mobilize the nationwideresistance to the creation of the SEZ. Theorganizations made it clear that the issue at thestake was not only the lands and rights of theaffected farmers and other villagers, but the largercanvas of the way the political economy of the nationis being usurped by the corporate interests with theconnivance of the political and bureaucratic elite.They resolved to protect the natural resources of thecommunities land, water, forest, sea-coast; opposethe violation of the laws and regulations and thesovereignty of the people.If the struggle in Raigad gains momentum, it would bea next sign-post, like Plachimada, of the fierceresistance by the people to any encroachment on theirrights, resources and sovereignty and any threat tothe Constitutional democracy in the country. Thestruggle in Raigad will decide to a large extent thefuture trajectory of the larger struggle.

Development Or Developmental Terrorism? By Prof. Amit Bhaduri.

2007-06-21T10:58:00.000-07:00

It has become a cliché, even a politically correct cliché these days, to say that there are two Indias: the India that shines with its fancy apartments and houses in rich neighbourhoods, corporate houses of breath taking size, glittering shopping malls, and high-tech flyovers over which flows a procession of new model cars. These are the images from a globalized India on the verge of entering the first world. And then there is the other India. India of helpless peasants committing suicides, dalits lynched regularly in not- so- distant villages, tribals dispossessed of their forest land and livelihood, and children too small to walk properly, yet begging on the streets of shining cities. Something stalks the air.The rage of the poor from this other India is palpable; it has engulfed some 120-160 out of 607 districts of this country in the so called extremist Naxalite movements. The India of glitter and privilege, it seems is bent on turning its back, and seceding fast from the other India of despair, rage and inhuman poverty. This is not just a matter of growing relative inequality between the two Indias. A more brutal process is at work, with the connivance of governments at the Central and at the state level which is not only widening this divide between the two Indias, it is deepening consciously the absolute poverty and misery of poor India.

The unprecedented high economic growth on which privileged India prides itself is a measure of the high speed at which India of privilege is distancing itself from the India of crushing poverty. The higher the rate of economic growth along this pattern becomes, the greater would be the underdevelopment of India. We first need to understand this paradox which counter-poses growth against development, and challenge this dangerous obsession with growth.
Globalisation is the context in which growth is taking place.the accompanying processes of economic liberalization and privatization are tilting the balance in favour of the market against the nation state. However, the game is no longer what it used to be. Nineteenth century capitalism developed through a complex process of conflict and cooperation between the state and the market. The state furthered the interest of the market, but at times also regulated it. For instance, it regulated the hours of work, abolished child labour or legalised trade unionism at different points in time. Karl Polyani, the perceptive commentator on the nineteenth century capitalism described this as a process of “great transformation” driven by the “double movement” of the market and the state, a process in which the rules for the market were set mostly by the state. When the state fails to play this role, the result is not a freer market and more freedom, but growing desperate rage of the poor,which must engulf all sooner or later.
It is a badly kept secret of economic theory that it cannot explain how the market gets organized and rules get set. The reason is the free market metaphor which avoids assigning the state an explicit economic role. For instance economists talk of prices rising or falling in response to excess of demand or supply in the market, but are at a loss to explain who sets the price in a market of many players, if no one has the power to dictate price? Like Voltaire’s god they then invent ‘the auctioneer’, the metaphor of the invisible hand of the price mechanism and other tales, trying to pretend that the market operates in isolation like a self- regulating system. High theory verges on idiocy by rejecting history. What is left unsaid is that, the situation is far worse when the rules of the market are set by the state on behalf of the large corporations. This indeed is what is being carried out under globalization, also in India . The conventional Left is willingly or unwillingly as much a party to it as the neo-liberal Right. Increasingly rhetoric and not substance divides them. We are living in barren times The Left is left without any sense of economic direction, any ideas, and ends up following the Right which is not right. As a result a many pronged merciless onslaught has been let loose on the poor of India in the name of faster economic growth.

A massive land grab by large corporations is going on in various guises, aided and abated by the land acquisition policies of both the federal and state governments. Destruction of livelihoods and displacement of the poor in the name of industrialization, big dams for power generation and irrigation, corporatization of agriculture despite farmers’ suicides, modernization and beautification of our cities by demolishing slums are showing everyday how development can turn perverse. Until September, 2006, the Board of Approvals committee of the Ministry of Commerce had approved 267 Special Economic Zones(SEZ) projects all over India. Land area for each of these projects ‘deemed foreign territories’ ranges from 1000 to 14,000 hectares. So far for only 67 multipruduct Sez 1,34,000 hectares have been acquired mostly by State Industrial Development Corporations. Similarly, mining rights are being granted to the corporations mostly over tribal lands. State governments, aided and emboldened by federal government policies, are acquiring land to give away to corporations.

Recall that the year 2006 had begun with the shooting down in cold blood by the police of twelve tribals in Kalinga Nagar, Orissa, when they resisted their land being handed over to the Tatas for mining. The year is about to end as the Marxist chief minister in neighbouring west Bengal is prepared to unleash state terror on behalf of the Tatas. The Panchayat Extension to Scheduled Areas or PESA Act of 1996 requires Gram Sabhas to be consulted for land acquisition. And yet, in Jharkhand, in Orissa this has either been been ignored systematically or, as a recent field report documents, the police surrounds threateningly the ordinary members in the Gram Sabha meetings , forcing them to agree to the proposals of giving up their lands at throw away prices( Down to Earth, 31 October, 2006). Land acquisition in Singur in west Bengal for the Tatas, or for Anil Ambani in Dadri in UP repeat a pattern that is becoming menacingly familiar. We are told ‘trade secrets’ about land use can not be revealed to the public under the right to information act. Yet a local TV channel reported, uncontested so far by the government, that west Bengal government gave Rs.140 crores in compensation, while the the Tatass will give only 20 crores after five years for the land according to the deal, without stamp duty and with provision of free water. The fact that public money worth 120 crore or more is handed over to a corporation must indeed remain a trade secret. Another report claims on May 31, 2006 the west Bengal state cabinet gave the nod for acquisition of 36,325 acre of land for various similar national and multinational corporate led projects. With more proposals coming in, the figure might have crossed 70,000 acres with Howrah marked for the Salem group, and Barasat also to be handed over to the same group for Barasat Raichowk Express Way.

What we are witnessing is deliberate connivance on the part of the conventional Left in West Bengal with the interests of large corporations against the poor, perhaps in the hope that the corporations will bring about a miraculous transformation of the State, which they are incapable of doing with sate power. It is an abject surrender to the conventional wisdom of our time that There Is No Alternative to corporate led capitalism, and the type of globalization it signifies, in short the TINA syndrome in the development discourse.

This TINA syndrome maintains that the corporations will deliver us from poverty by raising the rate of economic growth. The IMF, the World Bank, and the Asian Development Bank propagate tirelessly this ideology in various guises. Now we have a group of Marxist politicians propagating the same.And yet, this model of development that is so widely agreed upon, is fatally flawed. The model has already been rejected in the last general election in 2004, especially in Andhra. Even earlier economic reforms won neither the Congress Party nor its chief architect Dr. Monmohan Singh personally a favourable verdict in the election in 1996. There is no reason to believe that this corporate-led growth ideology will not be rejected again by our democratic polity either in west Bengal or elsewhere.

There are two variants of this ideology relevant for India. In the first variant massive commercial borrowing from international banks is done by our willing national government for development, encouraged and coordinated by the IMF and the World Bank by engaging multinational corporations leading to various expensive, ambitious giant projects especially in the area of infrastructure. Typically rules of consultancy and contract are fixed by the World Bank. Almost inevitably the country subsequently gets caught in a debt trap. Most countries of Central and Latin America were examples of this variant of the development model until recently. Now country after country in a rising wave, Argentina, Brazil, Bolivia, Equador, Venezuela,have rejected this path of debt-dependent (non-) development. Our Left has nothing to learn from them?

The other variant is characterized by a strong presence of the state. State-led or state- sponsored corporations are created and nurtured to compete with multinationals under active government support especially in the world market, while the government tries also to attract direct foreign investment especially in areas where, for some reason the government corporations are not the preferred option. Nevertheless, the government becomes a ruthless promoter of the corporate entities in search of higher growth, irrespective of how it affects the interests of the ordinary people. This is a case of state-led corporatism, and today’s China seems to fit reasonably well this description, while South Korea, despite the obvious differences in the political and geo-political situations and debt dependence at an earlier stage might have traversed a similar path. Not only our one time China hater Rightists, but our Marxists, who not so long ago ridiculed the slogan” China’s path is our path’, seem to have turned the full circle in admiration of the Chinese way of corporate- led development. The case of China is particularly misleading in this respect in two ways. First, because the nature and extent of support the Chinese government can give to its state-sponsored corporations or to particular foreign investors, and differentiate among them, if necessary even in terms of a malleable legal system, is not possible for a government, particularly when it intends following the path of borrowing heavily under IMF World Bank supervision. They have to comply largely with the interests of those agencies. Second, the single minded ruthlessness with which the Chinese system can follow its objective of corporate led growth, at times by changing laws or suppressing the rights of the ordinary people, is fortunately not yet possible in our system.

However, what China or any other country does is no justification. The reliance on developmental terrorism by the state on behalf of the corporations against the poor is unacceptable anywhere, no matter what political label is attached. The Indian case could have been restrained by the political compulsions of coalition governments in the centre as well as in several states. However, this has not happened because of a remarkable degree of political convergence on the model of development between the Right and the Left.The challenge facing us is twofold. We must oppose high growth that justifies developmental terrorism by the state on behalf of the corporations. This is the significance of Narmada Bachao Andolan led by Medha Patkar. At the same time we must chart out an alternative path of development. Although limited, possibilities exist even in the present situation , and we must exploit them fully. The potentials of the National Employment Gurantee Act, strengthening of Panchayats through their financial autonomy for implementing it, and full control by Gram Sabhas of the use of their land, and transparency and accountability in governance at all level through the Right to Information need to be pushed as far as possible. Pro- people growth in India has to be employment driven, and energized by a genuinely decentralized structure of governance. With that vision of development, it is time we judge the actions of political parties and governments in power by this criterion, and not by their fiery rhetoric.

Democratic Colonialism by P.K. Chatterjee

2007-06-21T10:50:00.000-07:00

If any political analyst looks askance as to what kind of a government can democratic colonialism be, he has only to study the Indian Constitution and its working. Its Preamble recites some basic slogans of republican democracy, its Part-III confers all kinds of fundamental rights to the citizens, its Part-IV gives highly laudable but unenforceable directives for state policies, and there the democracy part ends. The rest of the Constitution, in all essential particulars, is a reproduction of the Government of India Act 1935, which was carefully designed by the British Parliament to retain its absolute control over the Indian administration with a mere show of autonomy to the provinces. Incorporating the Act of 1935 in the Indian Constitution only meant that the highest political leadership of India deliberately avoided vesting the sovereignty in the people and considering themselves their creatures and servants accountable to them. These leaders were well aware that conferring a mere right to vote every five years or so on the poor, uneducated people was meaningless so far as effective democracy is concerned, the real power would always remain with them. This is the reality even today. Let us examine it in a little more detail.

Our political leadership under Jawaharlal Nehru and his successors adopted the socialist ideology for developing the economy of the country. But economic progress floundered. Other countries like Japan and Australia, which were economically at par or even worse off than ours at the termination of the Second World War, went far ahead of us. We had more natural resources than these countries, we had enough manpower. Our Institutes of Technology, our medical and engineering colleges produced qualified men, but the best of them made a beeline for the American embassy for visa to the USA. We had no means to check the brain drain. Our resources were wasted by a corrupt bureaucratic administration which vitiated not only every sphere of state governance, but also the industrial management. Corruption had vitiated even our topmost political leadership right from the dawn of independence culminating in “suitcase diplomacy”. There was nothing wrong in the theory or practice of socialist economy and planned development. It failed in India for lack of implementation mainly because we had a corrupt and selfish leadership, a relic of the old colonialism, and complete absence of a militant public opinion so essentially required to combat the malady. As a consequence our planned economy ended in a corrupt licence and control raj. Our country, according to a UN survey, acquired the dubious distinction of being the third most corrupt country in the world.

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AFTER over half-a-century our political leadership, including the Leftists, have now turned to globalisation and free market economy and privatisation of state enterprises. Our leadership apparently has the erroneous conviction that prosperity of the country can be brought about by economics alone, without adhering to social development and social justice, as if these would automatically follow. So now that the era of nationalisation, state enterprises, and social control is over, our leadership has embarked upon the policy of divestment, privatisation and free trade. It is said that the public sector company, Jessop, was sold for Rs 18 crores only when it had Rs 14 crores in its bank account and its assets were worth over Rs 2000 crores. There were other similar deals which put the credibility of the policy being followed in doubt. The answer to the question—why did we fail to advance when other countries succeeded?—emphatically lies in the colonial outlook of the political leadership of India which not only retarded economic progress but also enhanced corruption in the political leadership and in the huge bloated bureaucracy which was already corrupted by the British. It caused unbearable financial burden on the government preventing rural development, poverty eradication, education or any measure for social upliftment of the poor masses.

Gandhiji had suggested that after independence the Vicregal Lodge should be converted into a hospital. Instead, with the independence Babu Rajendra Prasad entered the Viceregal Lodge with the same regalia and paraphernalia of bodyguards etc. and Pandit Jawaharlal Nehru entered the palace of the British Commander-in-Chief and started living there with similar costly appendages. Each one of our democratic leaders of the poor masses occupied sprawling Lutyen bungalows and started living in Maharaja style—all at the cost of the poor taxpayers of India. The bureaucrats also did not lag behind. They lived in the same lavish colonial style with private secretaries and orderlies and official cars at the cost of the taxpayers. The number of Ministries and departments were increased to accommodate the aspiring Congress netas. British civilians by and large had retired and went back to England and our Indian civilians filled the vacancies en masse. New Ministries created new posts and the bureaucracy became bloated. Huge residential colonies and comfortable apartments, houses and bungalows were constructed. Up came Ramakrishna Puram, Shan Nagar, Man Nagar, Kaka Nagar and numerous other sprawling residential colonies at the taxpayer’s cost. Villages, towns, small districts, many States and tribal areas of the North-East, south, and west of India remained in primitive darkness, without schools, hospital, roads, pure drinking water, electricity.

It was unbelievable that our leaders, many of them educated in England and other foreign countries, were unaware that the politicians, bureaucrats, judges etc. have not been so pampered in any other country in the world. In England itself the civil servants, Ministers, members of British Parliament, the judges of the High Court and the Judicial Committee of the Privy Council are neither provided with official residence nor official cars and, barring a few, not even with private secretaries. There are no bungalows, peons or orderlies for any public servant in England. Nor did the British make such lavish provision for politicians, civil services, police, judiciary etc. in other colonies like Australia, Canada or America. The reason they did it in India was apparent and surely not unknown to our political leadership. The Indian civil servants, police, Army were the strongest support for the British Raj in India. The British created in them a social class different from the common people of India. The common people called these classes of government servants “Kala Angrej”. The people of this class also arrogantly thought themselves to be superior to the common people of India and identified themselves with the ruling class. A few exceptions did not alter the picture. They were used by imperialist Britain to suppress the freedom movement of the Indians, and this class actually carried out all the repressive measures on the people under orders of the British masters.

Successive Pay Commissions and their recommendations have been implemented resulting in increase in pay packets and perquisites of the babus both at the Centre and the States in disproportionate percentage of the national income. Strangely no attempt has ever been made to relate these increases to their work output or quality. Bribery and corruption have increased with increase in salary and perquisites. If the quality of the output from the bureaucracy compared to the world standards is low, if not the lowest, how can the houses and perquisites not prevalent in any other country in the world be justified?

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WHY was this obnoxious and apparent colonialism continued after independence? Apart from propriety, the huge expenditure in building and maintaining the luxurious bungalows etc. cannot be politically or legally justified. The government now is only a trustee of the revenues it collects and is bound to spend it only for public purpose. It is not its owner, as the British were. As trustees, the government is legally answerable to the people to justify questionable expenditure. Strangely our government is even using these public properties as largesse. Journalists, retired or defeated politicians, artists, musicians, even the political parties are being accommodated in these bunglows and houses belonging to the state, and maintained at public expense. “India must be ruled from palaces,” said Lord Cornowallis, a Governor General of the early British days. Our political rulers also believe in that principle.

Another vestige of British colonialism in India is the policy of reservation, which diverse sections of our politicians are making use of to strengthen their vote-bank. National integration, which was a crying need in the period of struggle for freedom, remains even today a crying need. The best weapon used by the British to keep the people of India divided, was their creation of the ‘Scheduled Caste’, a caste unheard of in Hindu texts, and ‘communal award’ which divided the Hindus and Muslims. They introduced an education system which was kept out of the reach for the poor, and it only produced babus, fit for clerkship in government offices only. They brought in parochialism among the people by preferring one province to another in distributing largesse. The picture remains almost unchanged even today.

India has had diversity and pluralism throughout its history but that is its asset and not a liability. Shivaji’s Army had Muslim Generals and soldiers who fought the Moghuls and other Muslim Princes. The Moghul Army had many Hindu Generals and soldiers who fought the Hindu Kings. Diversity does not mean division, nor does unity mean uniformity. But our trouble is that we do not have a political leadership of the quality and calibre capable of attaining leadership of this plural community. They are all lesser gods of political minority or majority, out to create vote-banks by dividing the people as their only stepping stone to power. They do not care a paisa for the stability and strengthening of democracy in the country. Their only concern is stability of their own stay in power, stability of their own government. There are no BJP-ites, Congress-ites, Communists or Socialists in this respect. All are sailing in the same boat.

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THERE is no law corresponding to our Land Acquisition Act in any democratic country of the world. The government has been empowered in other countries within strict restriction to acquire private land, only for the purpose of the state, on payment of full compensation alone. No government in any country, not to speak of England, would dare to acquire the agricultural land of a farmer to hand it over to a private industrialist to establish his automobile factory or set up an SEZ. Our Land Acquisition Act is another relic of the British colonial days. But even under our Act the land of a cultivator cannot be acquired except for public purpose, and agriculture is as much a public purpose as manufacture of automobile. It is really strange to hear the talk of industrialisation and SEZ from the lips of the CPM stalwarts. The Bengalis of West Bengal will remember that in the fiftees and sixties West Bengal was one of the formost industrialised States of India. After the Left Front came to power, West Bengal experienced the worst electricity shortage, and labour unrest, resulting in the flight of many established industries from West Bengal. Gradually it became industrially backward. If there is to be a turnabout now, why should it be done destroying agriculture? More than automobile West Bengal needs agrobased industries. There is a crying need for cold storages, which are very short in number and in years of bumper crops these get destroyed for want of storage. Let there be factories manufacturing tractors instead of motor cars. Let there be scientific storage space for rice and wheat so that the farmer can gain. Let there be electricity in the villages so that agriculture can be machanised. Let the roads in villages improve so that accidents do not take place every day. Let the villagers in West Bengal get pure water to drink. After all, the ultimate objective must be the prosperity of the people and not merely the prosperity of the opulent. Noam Chomsky in Profit over People writes about the US economy, that over 80 per cent people believe that the economic system is inhumanly unfair. More than 95 per cent feel that “Corporations should sometimes sacrifice some profits for the sake of making things better for their workers and communities”. Inequality has reached levels unknown for seventy years and the US has the highest level of child poverty amongst the indusrial nations, closely followed by the UK. “Of course, this in the midst of stupendous and dazzling profits overflowing in the coffers of corporate America.” Colonial power has affected the discretion of our political rulers. Let us not allow dictatorial capitalism to destroy us altogether. What the Government of West Bengal did in Nandigram was nothing short of crime. An eminent American Judge Brandis wrote: If the government becomes a law breaker, it breeds contempt for law, it invites every man to become a law unto himself, it invites anarchy. (Olmstead vs USA)
An agonised author asked: “Who has betrayed India?” He himself answered: The political class, the non-functioning judicial system, corrupt administration, the imbecile or irresponsible media and the selfish and devious intelligentsia have together been responsible. (Maximum City Bombay by Suketu Mehta) If our media, academics, and the intelligentsia do not awaken the public, democracy will become a complete illusion, the country will be perpetually saddled with a bloated bureaucracy, corrupt to the core, an arrogant, criminalised political leadership, squandering public revenue, a dysfunctional judiciary and corrupt, criminalised law-enforcers.

The author is a Senior Advocate of the Supreme Court of India.

INDUSTRIALISATION: Which way now? - Medha Patkar and Amit Bhaduri

2007-06-21T07:52:00.000-07:00

If multi-party parliamentary democracy means giving people a wide range of political choices, we have it in plenty in India, parties big or small with a variety of labels. However, if we have to choose also the content in critical areas of economic policy there is hardly any choice anymore. A marked convergence among political parties is taking place, less apparent in their rhetoric, but unmistakably clear in their actions. One could have believed that this is the result of compromise of coalition politics at the centre. But when the same thing happens at the level of states, and political parties of different labels follow with equal vengeance the same economic course, no room is left even for illusions. Grand terms like ‘growth, ‘industrialisation’ , and ‘development are used by politicians with abandon these days to hide the poverty of their economics and politics. And, the central question remains unanswered. If a high rate of growth necessarily entails a certain type of industrialisation, is this industrialisation synonymous with development?

The type of industrialisation India is experiencing with recent high growth has three characteristics that are unmistakably neo-liberal. First, it is led by corporations. Second, they are mostly private corporations. Third, the role that the government plays at the central and at the state level is that of a promoter, an agent of private corporations, not one of a regulator. All parliamentary political parties seem to agree. We are repeatedly told that sacrifice is needed for this industrialization, but it is conveniently left untold that the sacrifice must be borne by those who are least capable of bearing it, the poor and the most marginalized sections. The rich corporations need not sacrifice, instead they are subsidized by the governments. The estimated subsidy for the TATAS in Singur, West Bengal is over Rs. 850 crores for an investment of Rs. 1000 crores, and also similar deals are said to have been cut by the two Ambani brothers in Dadri, Uttar Pradesh and, for the Mumbai Special Economic Zone in Raigad, Maharastra.
The traditional political differences have melted away in many respects in a homogeneous neo-liberal mass। In so far as the traditional Left is concerned, first Singur and then Nandigram drove home the point that, many of the left politicians are not that different from the ‘dream team’ of economic policy makers at the centre, who favour the World Bank, the IMF and the Asian Development Bank. The cultural nationalists of Hindutwa variety uphold violently their culture when it comes to Ram Mandir and ‘Vande Mataram’, but surrender willingly to foreign multinationals. The political double talk everywhere is amazing. Congress has a remarkably short memory about the Sikh massacre of 1984. The left parties rightly breathe fire about the Gujarat massacre of 2002, while BJP covers it up with false propaganda and manipulation of the State machinery. Then Nandigram massacre happens in 2007, and Advani compares it with Jallianwala bagh conveniently forgetting Gujarat, while CPM leaders and some of the supportive intellectuals call it an unfortunate incident that happened accidentally. The unwarranted shooting and land mining of 13 tribals in Kalinganagar in 2006 by the police bears an uncanny parallel. The tribals were refusing to hand over their land to the same TATAs in Kalinganagar, just as in Singur the peasants are resisting, and in Nandigram they have resisted. Should we be erecting a defence of empty words to say how different Navin Patnaik is from Buddhadeb Bhattacharya, only because they go by different political labels? It is evident from a chronological survey of field reports from Kalinganagar and Nandigram that these were premeditated actions by the State authorities to test the waters and see, how far they can go in the service of large corporations.

In this world of neo-liberal harmony parties of different shades insist that corporate style industrialisation with the State as its agent is our only option। And, Indian polity with an increasingly inequitable economy thrives in the name of high growth, industrialisation and development, working ruthlessly against the poor majority. A spectre of despair and popular anger is stalking in all corners of the country. Farmers are committing suicide in hundreds especially in Maharastra, Andhra Pardesh, Punjab because the government wants to usher in a new type of commercial agriculture under WTO with expensive inputs supplied by multinationals but no subsidy, no appropriate price for their produce. In Chattisgarh in the name of fighting extremism, tribals are being evacuated forcibly in thousands from their villages under Salva Judum to be huddled in Vietnam-style concentration camps, while the corporations eye greedily their mineral resource rich land. The poorest are the richest in natural resources in this country, but are kept poorest by denying them what belongs to them.

Since land is a state subject according to the Constitution of India whether to acquire or not acquire, and with what degree of coercion, is largely the prerogative of the state government. This is where the political hypocrisy is particularly evident, and rhetoric about centre state division of power, cannot hide it. Land is being acquired by various state governments in a competitive race to the bottom in servitude to win the favour of the corporations. The argument goes, “if we in West Bengal do not do it, Uttaranchal will do it” or, “we can be more ferocious than Orissa” in pleasing the TATAs or the Jindals or whoever else. This has full legal and moral support of the central government, but the state has full constitutional power not to oblige.
Land is being acquired in different guises, for mining, for the location of industries, for large estates and IT parks and finally for Special Economic Zones (SEZ) under the ‘eminent domain’ clause which allows the state to override private property right in land in ‘public interest’। Land, the primary source of livelihood in the agrarian economy, includes as per the Act ‘everything’ attached to land - water, minerals. Therefore, it becomes the most obvious case of forcible transfer of resources from common people for whom land and resource base is not property but livelihood to private corporations. Using the same old Act since the British days, amended in 1984, land acquisition is carried out to serve corporate interest, destroying livelihoods, and displacing people. It is often said there are invariably gainers and losers in such economic processes, which the economist Schumpeter had captured with the phrase ‘ creative destruction’ . However, in the present context this is a misleading half-truth. If such creative destruction were just a part of the normal process of capitalistic development, it would have been unnecessary for the state to intervene in the guise of ‘public interest’ on behalf of the private corporations. It involves a transaction between two private parties, namely the corporation and the land owning peasants without level playing field, and the function of the State should be at least to ensure this transaction is voluntary, particularly because one party in the transaction namely the peasant is economically far weaker. This would mean that the corporations can acquire land at a price at which the peasants are willing to part voluntarily with their land, either individually or through collective decisions, the latter being especially relevant in the case of tribal land. Instead what has been happening is that the state using force and violence under a cloak of secrecy despite the Right to Information Act. Although the SEZ scheme has the most pronounced pro-corporate bias, the difference between acquiring SEZ land in Nandigram, and the land for the Tata-FIAT jointventure in Singur is one of legal nicety, not of relevance in so far as those who derive livelihood from that land are concerned. And, even after Nandigram, what most parties, including the CPM has to recommend is not the scrapping of SEZ altogether, but restricting its maximum size and similar marginal changes!

Although land is the most visible symbol of transfer of resources to the corporations, the problem goes deeper. The bias against the poor in policy making is both direct and indirect. The direct bias is visible in plan allocation. Despite 60% or more of our working population living in agriculture, all the recent five year plans under different governments have allocated less than 5 per cent of planned investment to agriculture. The indirect biasoperates pervasively through a pattern of consumption and production promoted by the state. Mammoth projects create the impression of urban glossiness with fancy malls, underground metros, flyovers etc at public cost. We take it for granted that many of these public utilities are essential for efficiency, saving time in travelling, improving the quality of life, even for attracting investment. These arguments are not false, but one sided. We need, even more desperately, higher efficiency and better quality of life in rural India where the majority lives. In the metropolitan area, we need infrastructure to ensure basic amenities to the most needy. Manhattan like world-class cities are set as our goals, when 25% to 60% of the city population live a subhuman existence in slums. So why this bias, and whom does it benefit? It certainly benefits the urban elite population, and leads to uncontrolled urbanisation and mega cities with growing hunger for energy, water and urban housing space. So slums have to be cleared without providing resettlement with poverty banished only from sight. This large-scale destruction of livelihoods of both urban and rural communities is only the surface phenomenon. The modes of transports we are creating with more flyovers for cars (including TATA’s people’s car), the type ofshopping or housing complex we are promoting are not merely iniquitous. They are far more energy intensive, and the majority of our ordinary citizens who do not consume them also have to pay directly or indirectly for this pattern of consumption. This is why farmers get less water, are staved of electricity in critical periods, clean drinking water or proper sanitation is a luxury in villages.
The idea that industry is more efficient than agriculture is largely because of this pronounced bias against agriculture and the poor। With almost two thirds of our work force in agriculture producing hardly over one fourth of national output, output per worker in agriculture is about 40 per cent of national average. In contrast, industry and services have a labour productivity double the national average. This is also a game of attributing ‘values’ to selected products and services, so that higher growth is achieved by transferring more and more resources to the high productivity sector, and by favouring large corporations which organize this pattern of production for the privileged India. The other India watches in despair and anger, while many have no choice but to commit suicide. Must we not strive for an economic alternative on the basis of new politics?

An economic alternative creating another kind of development is feasible, and elements of it exist even in the present political-economic system। Very briefly, it has to be based on three basic premises. First, we must learn to rely far more on the internal rather than the external market. The biggest driving force of the internal market is the purchasing power of the ordinary people derived from employment growth. India’s record on this score has been dismal in recent years. An eight per cent growth in output has been accompanied by hardly 1 per cent growth in regular employment, and increase in irregular or ancillary employment is marked by flexible contracts loaded against the worker with insecurity and over-crowding of infrastructure. It is foolish to expect that corporate-led growth can do better on the employment front, because corporations are in the game of making profit by cutting costs, including labour costs. And the more we accept globalisation unconditionally, the stronger would be the relative importance of the external over the internal market. This means cutting labour cost to increase export will become even more pressing. Primacy to export also means priorities in production going against the needs of the population here. Growth of the internal market through rapid employment growth, therefore, requires a far more selective approach to globalization.

Second, economic growth must be the outcome of employment growth, not the other way round and the former should never be at the cost of the latter। Our benchmark should be a time bound programme for full employment. How much does the growth in employment contribute to growth in output depends naturally on how productively labour can be employed. India performed poorly in this respect. The main reason is a bureaucratized system of central control which kills local initiative. We have to start at the opposite end of socialist orthodoxy, not by accepting neo- liberalism, but by forging a new combination. On the one hand, we have to get out of the grip of corporate led industrialisation by making agriculture and the rural economy the centre of economic dynamism; on the other, we have to break the grip of current centralised bureaucratic decision making. This can be done by extending the present national employment guarantee scheme to anambitious time bound full employment programme, and delegating much of the decision making power to the panchayats and local bodies to identify, formulate and execute local employment generating productive projects. A pre-condition for this is local control over local resources related to land, and maximum fiscal autonomy for the panchayats. Even the Constitution, through Article 243 provided for a finance commission to support and ensure that village/ward level local bodies become financially viable, which was to be appointed in 1993. No government, central or state followed this up seriously. The record of the Kerala has been the best while that of West Bengal Government has been among the worst. Acknowledging that the Left Front played a role in getting NREGA enacted, it is shocking that only 14 per cent of the money allotted in the poorest district of Purulia for employment guarantee was spent until December, 2006, more than half the money of employment guarantee provided by the centre remaining unspent in the state, and not more than 16 days of employment provided while the legal and financial provision allows for 100 days. (Reports from other states too show similar situation with an exception of certain areas). If the governments had shown the same zeal in making a success of employment guarantee as they have shown in acquisitioning land from the unwilling peasants, we would have taken at least the first step towards a genuine process of development.

Finally, there is the question of finance। Where would the money come from for such an ambitious employment programme, and how to make sure it is spent effectively? The Fiscal Responsibility and Budget Management Act (2003) which ties the hands of the Government in spending money for most pressing needs like employment guarantee must be scrapped. With this Act the Centre pushes privatization to raise money, denies basic health and educational expenditure, and restricts the role of public policy in the name of financial discipline. This suits well the IMF, the World Bank, and the corporations who want the state to promote but not to regulate them. This is where the Left should have its biggest battle, and insist that money that is needed for employment, basic education, health and social security of the unorganised workers must be found within our means, if necessary by revising this law. It went along instead with the neo-liberal economic ideology with only a whimper of protest, and concentrating energy on corporate-led industrialisation.

To ensure fiscal autonomy for local bodies, their budget can be kept in a separate account in nationalized banks with credit line extended to panchayats। This would avoid duplication of institutions, while a system of mutual check and balance between the panchayats and the local branch of nationalised banks can be devised based on their performance as borrowers and lenders. Banks would lend the next round only if the previous project succeeds, and panchayats can borrow the next round only if the money is well spent. It is this mutuality of interest, which has to be strengthened over time in creating the new form of sustained financing for development.

Not withstanding whether the growth is 8 or 10 per cent, these measures would initiate a process that empowers the poor, imparting a genuine democratic content to India’s development. We stand by the belief that development with non-corporate led rural industrialisation at the focal point is the way forward.

India Is Colonising Itself - Interview with Arundhati Roy on March 26, २००७

2007-06-21T07:35:00.000-07:00

Q) There is an atmosphere of growing violence across the country। How do you read the signs? Do you think it will grow more in the days to come? What are its causes? In what context should all this be read?

A) You don’t have to be a genius to read the signs। We have a growing middle class, being reared on a diet of radical consumerism and aggressive greed. Unlike industrializing western countries which had colonies from which to plunder resources and generate slave labour to feed this process, we have to colonize ourselves, our own nether parts. We’ve begun to eat our own limbs. The greed that is being generated (and marketed as a value interchangeable with nationalism) can only be sated by grabbing land, water and resources from the vulnerable. What we’re witnessing is the most successful secessionist struggle ever waged in Independent India. The secession of the middle and upper classes from the rest of the country. It’s a vertical secession, not a lateral one. They’re fighting for the right to merge with the world’s elite somewhere up there in the stratosphere. They’ve managed to commandeer the resources , the coal, the minerals, the bauxite, the water and electricity. Now they want the land to make more cars, more bombs, more mines – super toys for the new super citizens of the new superpower. So it’s outright war, and people on both sides are choosing their weapons. The government and the corporations reach for Structural Adjustment, the World Bank, the ADB, FDI, friendly court orders, friendly policy makers, help from the ‘friendly’ corporate media and a police force that will ram all this down peoples’ throats. Those who want to resist this process have, until now, reached for dharnas, hunger-strikes, satyagraha, the courts, and what they thought was friendly media. But now, more and more are reaching for guns. Will the violence grow? If the ‘growth rate’ and the sensex are going to be the only barometres the government uses to measure progress and the well-being of people, then of course it will. How do I read the signs? It isn’t hard to read sky-writing. What it says up there, in big letters is this: The shit has hit the fan, folks.

Q) You once remarked that though you may not resort to violence yourself, you think it has become immoral to condemn it, given the circumstances in the country। Can you elaborate on this view?

A) I’d be a liability as a guerilla! I doubt I used the word ‘immoral’-morality is an elusive business, as changeable as the weather. What I feel is this: Non-violent movements have, for decades knocked on the door of every democratic institution in this country and have been spurned and humiliated. Look at the Bhopal Gas victims, the Narmada Bachao Andolan. The NBA for example, had a lot going for it, high profile leadership, media coverage, more resources than any other mass movement. What went wrong? People are bound to want to re-think strategy. When Sonia Gandhi begins to promote Satyagraha at the World Economic Forum in Davos it’s time for us to sit up and think. For example, is mass civil disobedience possible within the structure of a democratic nation-state? Is it possible in the age of disinformation and corporate-controlled mass media? Are hunger-strikes umblically linked to celebrity politics? Would anybody care if the people of Nangla Machhi or Bhatti mines went on a hunger-strike? Sharmila Irom has been on a hunger strike for six years. That should be a salutary lesson to many of us. I’ve always felt that it’s ironic that hunger-strikes are used as a political weapon in a land where most people go hungry anyway. We are in a different time and place now. Up against a different, more complex adversary. We’ve entered the era of NGOs – or should I say the era of palthu shers - in which mass action can be a treacherous business. We have demonstrations which are funded, we have sponsored dharnas and social forums which posture militantly but never follow up on what they preach. We have all kinds of ‘virtual’ resistance. Meetings against SEZs sponsored by the biggest promoters of SEZs. Awards and grants for environmental activism and community action given by corporations responsible for devastating whole ecosystems. Vedanta, a company mining bauxite in the forests of Orissa wants to start a university. The Tatas have two charitable trusts that directly and indirectly, fund activists and mass movements across the country. Could that be why Singur has drawn so much less flak than Nandigram, and why they have not targeted, boycotted, gheraoed? Of course the Tatas and Birlas funded Gandhi too – maybe he was our first NGO. But now we have NGOs who make a lot of noise, write a lot of reports,but who the sarkar is more than comfortable with. How do we make sense of all this? The place is crawling with professional diffusers of real political action. ‘Virtual resistance’ has become something of a liability.
There was a time when mass movements looked to the courts for justice. The courts have rained down a series of judgments that are so unjust, so insulting to the poor in the language they use, they take your breath away. A recent Supreme Court judgment allowing the Vasant Kunj Mall to resume construction though it didn’t have the requisite clearances said in so many words, that the question of Corporations indulging in malpractice does not arise! In the era of corporate globalization, corporate land-grab, in the era of Enron and Monsanto, Halliburton and Bechtel, that’s a loaded thing to say. It exposes the ideological heart of the most powerful institution in this country. The judiciary along with the corporate press, is now seen as the lynchpin of the neo-liberal project.
In a climate like this when people feel that they are being worn down, exhausted by these interminable ‘democratic’ processes, only to be humiliated eventually, what are they supposed to do? Of course it isn’t as though the only options are binary – violence versus non-violence। There are political parties that believe in armed struggle, but only as one part of their overall political strategy. Political workers in these struggles have been dealt with brutally, killed, beaten, imprisoned under false charges. People are fully aware that to take to arms is to call down upon yourself the myriad forms of violence of the Indian State. The minute armed struggle becomes a strategy, your whole world shrinks and the colors fade to black and white. But when people decide to take that step because every other option has ended in despair–should we condemn them? Does anyone believe that if the people of Nandigram had held a Dharna and sung songs the West Bengal Government would have backed down? We are living in times, when to be ineffective is to support the status quo (which no doubt suits some of us). And being effective comes at a terrible price. I find it hard to condemn people who are prepared to pay that price.

Q) You have been traveling a lot on the ground — can you give us a sense of the fissures you are seeing on the ground। What are the trouble spots you have been to? Can you outline a few of the combat lines in these places?

A) Huge question – what can I say? The military occupation of Kashmir, neo-facism in Gujarat, civil war in Chhattisgarh, MNCs raping Orissa, the submergence of hundreds of villages in the Narmada Valley, people living on the edge of absolute starvation, the devastation of forest land, the Bhopal victims living to see the West Bengal government re-wooing Union Carbide – now calling itself Dow Chemicals - in Nandigram। I haven’t been recently to Andhra Pradesh, Karnataka, Maharshtra, but we know about the almost hundred thousand farmers who have killed themselves. We know about the fake encounters and the terrible repression in Andhra Pradesh. Each of these places is has its own particular history, economy, ecology. None is amenable to easy analysis. And yet there is connecting tissue, there are huge international cultural and economic pressures being brought to bear on them. How can I not mention the Hindutva project, spreading its poison sub-cutaneously, waiting to errupt once again. I’d say the biggest indictment of all is that we are still a country, a culture a society which continues to nurture and practice the notion of untouchability. While our economists number-crunch and boast about the growth rate, a million people, human scavengers - earn their living carrying several kilos of other peoples’ shit on their heads every day. And if they didn’t carry shit on their heads they would starve to death. Some fucking superpower this.

Q) How does one view the recent State and police violence in Bengal?

A) No different from police and State violence anywhere else – including the issue of hypocrisy and doublespeak so perfected by all political parties including the mainstream Left। Are communist bullets different from capitalist ones? Odd things are happening. It snowed in Saudi Arabia. Owls are out in broad daylight The Chinese Government tabled a bill sanctioning the right to private property. I don’t know if all of this has to do with climate change. The Chinese Communists are turning out to be the biggest capitalists of the 21st century. Why should we expect our own Parliamentary Left to be any different? Nandigram and Singur are clear signals. It makes you wonder – is the last stop of every revolution advanced capitalism? Think about it - the French Revolution, the Russian Revolution, the Chinese Revolution, the Vietnam War, the Anti- Apartheid struggle, the supposedly Gandhian Freedom struggle in India…what’s the last station they all pull in at? Is this the end of imagination?

Q) The Maoist attack in Bijapur — the death of 55 policemen. Are the rebels only a flip face of the State?

A) How can the rebels be the flip side of the state? Would anybody say that those who fought against Apartheid – however brutal their methods - were the flip side of the state? What about those who fought the French in Algeria? Or those who fought the Nazis? Or those who fought Colonial Regimes? Or those who are fighting the US occupation of Iraq? Are they the flip side of the State? This facile new report-driven ‘human rights’ discourse, this meaningless condemnation game that we all are forced to play, makes politicians of us all and leaches the real politics out of everything. However pristine we would like to be, however hard we polish our halos, the tragedy is that we have run out of pristine choices. There is a civil war in Chattisgarh sponsored, created by the Chattisgarh Government which is publicly pursing the Bush doctrine – if you’re not with us, you are with the terrorists. The lynch pin of this war, apart from the formal security forces, is the Salwa Judum – a government backed militia of ordinary people forced to take up arms, forced to become SPOs (Special Police Officers). The Indian State has tried this in Kashmir, in Manipur, in Nagaland. Tens of thousands have been killed, hundreds of thousands tortured, thousands have disappeared. Any Banana Republic would be proud of this record.. Now the government wants to import these failed strategies into the heartland. Thousands of Adivasis have been forcibly moved off their mineral –rich lands into police camps. Hundreds of villages have been forcibly evacuated. Those lands, rich in iron-ore are being eyed by corporations like the Tatas and Essar. MOUs have been signed, but no one knows what they say. Land Acquisition has begun. This kind of thing happened in countries like Colombia – one of the most devastated countries in the world. While everybody’s eyes are fixed on the spiraling violence between government backed militias and guerilla squads, multinational corporations quietly make off with the mineral wealth. That’s the little piece of theatre being scripted for us in Chattisgarh.
Of course it’s horrible that 55 policemen were killed. But they’re as much the victims of Government policy as anybody else. For the Government and the Corporations they’re just cannon fodder – there’s plenty more where they came from. Crocodile tears will be shed, prim TV anchors will hector us for a while and then more supplies of fodder will be arranged. For the Maoist guerillas the police and SPOs they killed were the armed personnel of the Indian State, the main, perpetrators of repression, torture, custodial killings, false encounters. The ones whose professional duties involve burning villages and raping women. They’re not innocent civilians – if such a thing exists - by any stretch of imagination.
I have no doubt that the Maoists can be agents of terror and coercion too. I have no doubt they have committed unspeakable atrocities. I have no doubt they cannot lay claim to undisputed support from local people – but who can? Still, no guerrilla army can survive without local support. That’s a logistical impossibility. And the support for Maoists is growing, not diminishing. That says something. People have no choice but to align themselves on the side of whoever they think is less worse.
But to equate a resistance movement fighting against enormous injustice, with the Government which enforces that injustice is absurd। The government has slammed the door in the face of every attempt at non-violent resistance. When people take to arms, there is going to be all kinds of violence – revolutionary, lumpen and outright criminal. The government is responsible for the monstrous situations it creates.

Q) The term Naxals and Maoists and outsiders is being used very loosely these days. Can you declutter it.

A) ‘Outsiders’ is a generic accusation used in the early stages of repression by governments who have begun to believe their own publicity and can’t imagine that people have risen up against them. That’s the stage the CPI (M) is at now in Bengal, though some would say repression in Bengal is not new, it has only moved into higher gear.. In any case what’s an outsider? Who decides the borders? Are they village boundaries? Tehsil? Block? District? State? Is narrow regional and ethnic politics the new communist mantra? About Naxals and Maoists – well… India is about to become a police state in which everybody who disagrees with what’s going on risks being called a terrorist. Islamic terrorists have to be Islamic – so that’s not good enough to cover most of us. They need a bigger catchment area. So leaving the definition loose, undefined, is effective strategy, because the time is not far off when we’ll all be called Maoists or Naxalites, terrorists or terrorist sympathisers and shut down, by people who don’t really know – or care -who Maoists or Naxalites are. In villages of course that has begun – thousands of people are being held in jails across the country, loosely charged with being terrorists trying to overthrow the state. Who are the real Naxalites and Maoists? I’m not an authority on the subject, but here’s a very rudimentary potted history.
The Communist Party of India the CPI was formed in 1925। The CPI (M) Communist Party Marxist- split from the CPI in 1964 and formed a separate party. Both of course were parliamentary political parties. In 1967 the CPI (M) along with a splinter group of the Congress, came to power in West Bengal. At the time there was massive unrest among starving peasantry in the countryside. Local leaders of the CPI(M) – Kanu Sanyal and Charu Mazumdar led a peasant uprising in the district of Naxalbari which is where the term Naxalites comes from. In 1969 the government fell and the Congress came back to power under Siddharta Shankar Ray. The naxalite uprising was mercilessly crushed - Mahashweta Devi has written powerfully about this time. In 1969 the CPI (ML) – Marxist Leninist split from the CPI (M). A few years later around 1971, the CPI (ML) devolved into several parties: the CPI -ML (Liberation) largely centred in Bihar, CPI –ML (New Democracy) functioning for the most part out of Andhra Pradesh and Bihar, the CPI-ML (Class Struggle) mainly in Bengal. These parties have been generically baptized ‘Naxalites.’ They see themselves as Marxist Leninist, not strictly speaking Maoist. They believe in elections, mass action and, when, absolutely pushed to the wall or attacked- armed struggle. The MCC – the Maoist Communist Centre at the time mostly operating in Bihar was formed in 1968. The PW Peoples War, operational for the most part in Andhra Pradesh was formed in 1980. Recently, in 2004 the MCC and the PW merged to form the CPI (Maoist) They believe in outright armed struggle and the overthrowing of the state. They don’t participate in elections. This is the party that is fighting the guerilla war in Bihar, Andhra Pradesh, Chattisgarh and Jharkhand.

Q) The Indian state and media largely view the Maoists as “internal security” threat। Is this the way to look at them?

A) I’m sure the Maoists would be flattered to be viewed in this way।

Q) The Maoists want to bring down the State। Given the autocratic ideology they take their inspiration from, what alternative would they set up? Wouldn’t their regime be an exploitative autocratic violent one as well? Isn’t their action already exploitative of ordinary people? Do they really have the support of ordinary people?

A) I think it’s important for us to acknowledge that both Mao and Stalin are dubious heroes with murderous pasts। Tens of millions of people were killed under their regimes. Apart from what happened in China and the Soviet Union, Pol Pot, with the support of the Chinese communist party (while the West looked away discreetly) wiped out two million people in Cambodia and brought millions of people to the brink of extinction from disease and starvation. Can we pretend that China’s cultural revolution didn’t happen? Or that that millions of people in the Soviet Union and Eastern Europe were not victims of labour camps, torture chambers, the network of spies and informers, the secret police. The history of these regimes is just as dark as the history of Western Imperialism, except for the fact that they had a shorter life-span. We cannot condemn the occupation of Iraq, Palestine and Kashmir while we remain silent about Tibet and Chechnya. I would imagine that for the Maoists, the Naxalites as well as the mainstream Left, being honest about the past is important to strengthen peoples’ faith in the future. One hopes the past will not be repeated, but denying that it ever happened doesn’t help inspire confidence….Nevertheless, in this part of the world, the Maoists in Nepal have waged a brave and successful struggle against the monarchy in Nepal. Right now in India the Maoists and the various Marxist Leninist Groups are leading the fight against immense injustice in India. They are fighting not just the State, but feudal landlords and their armed militias. They are the only people who are making a dent. And I admire that. It may well be that when they come to power they will as you say, be brutal, unjust and autocratic, even worse than the present government. Maybe, but I’m not prepared to assume that in advance. If they are, we’ll have to fight them too. And most likely someone like myself will be the first person they’ll string up from the nearest tree – but right now, it is important to acknowledge that they are bearing the brunt of being at the forefront of resistance. Many of us are in a position where we have are beginning to align ourselves on the side of those who we know have no place for us in their religious or ideological imagination. It’s true that everybody changes radically when they come to power – look at Mandela’s ANC. Corrupt, capitalist, bowing to the IMF, driving the poor out of their homes – honouring Suharto the killer of hundreds of thousands of Indonesian communists with South Africa’s highest civilian award. Who would have thought it could happen? But does this mean South Africans should have backed away from the struggle against apartheid? Or that they should regret it now? Does it mean Algeria should have remained a French Colony, that Kashmiris, Iraqis and Palestinians should accept military occupation? That people whose dignity is being assaulted should give up the fight because they can’t find saints to lead them into battle?

Q) Is there a communication breakdown in our society?

A) Yes.