An Epitaph is being written for Neo-liberalism in the “advanced countries.” It has been recognised that neoliberal policies are a disaster. What are the ‘achievements’ of such policies? In 30 years, liberalisation produced just € 1.3 trillion, or barely twice the total U.S. and European bank bailouts. The financial sectors which form the backbone of the system are not putting the money to any productive use.
The proponents of neo-liberalism, starting in the Friedrich Von Hayek, founded elite think tanks, solely to wreck public funding which transformed and enriched U.S. and northern European societies and economies after the war. The plotters of neo-liberalism, who hated democracy, never tested their ideas in the public sphere. Hayek’s stated aim was to control the minds of the intellectuals and the politicians. The State was hijacked at the top as were social-democratic parties, in a planned takeover. However, various European economies faced 40% unemployment in the 1990s; even the adherents of the Washington consensus saw that their formulaic crusading produced messy and uneven results.
The above are the observations of Aravind Sivaramakrishnan in the Course of his Review of the Book, “The Rise and Fall of Neo-Liberalism”, edited by Kean Birch and Vland Mykhwenco, which contains a brilliant analysis of the dominant political economy of our age by 13 accomplished scholars from a range of disciplines. The most challenging paper in the collection, says Sivaramakrishnan, is splendidly titled, “Zombieconomics”, and examines why political leaders and many economists till chant neoliberal mantras while the world crashes around them. (The analogy to the political leaders and economists in our country is obvious).
I crave the pardon of the concerned citizens (who have kindly spared the time to glance through this ‘article’) for testing their patience with the long preface as above, which I thought most aptly describes what is going on in the country. Our “leaders” are sold, heart and soul, to the neoliberal clichés and are recklessly implementing the “policies” prescribed therein, with disastrous consequences for the country and the people (who, for these discussions, is the am admi and not the luxurious fringe in our present day society).
The consequences of the neoliberal “policies” are well known but they have not stirred the conscience, and a sense of disgust and outrage among the non-courtier intellectuals and the society as a whole, so as to start a mass movement against the reckless actions of the government. So, it will not be inappropriate to bring to the notice of the concerned citizens the depth of feelings expressed by some leading experts in their analysis of the miserable plight of the am admi and the injustices being heaped on him/her.
Writing under the caption, “He who hath shall be given, that is our policy,” Prof. B.M. Hegde says that India has millions starving; yet, food stocks are rotting in open storage places, if (as has happened in U.P. over a period of several years) they have not been stolen by greedy middlemen. One of the multinational consultants appointed by the (western aping) government recently, advised it that godowns (for storage) are not economically viable any more! India has the largest number of nutritional immunity deficiency syndromes (NIDS) among children who are more than 67 million in all — much higher than all the sub-Sahara countries put together, which is about 42 million. Hardly 50 km. away from India’s commercial capital city of Mumbai, children die of starvation, every day, in a small Adivasi village of Jamsav, says Prof. Hegde. Farmers in many states are committing suicide, thanks to our new economic policies formulated by some of the top “professors” from the London School and Harvard. The government’s policies could only be termed richonomics — economics of the rich, by the rich and for the rich. Funds are flowing like water for building SEZs, malls, highways, etc., they have no resources to build food storage warehouses. The rich have become richer; the gap between the haves and the have-nots has assumed monumental proportion. The new industrial tycoons get all kinds of incentives, while the poor farmer has to pay through his nose for his daily needs. We get advises from Oxbridge and Harvard but not from our Indian villages. We get Nobel Laureates to advise the government, but no one has heard of people like Mansukhbhai Prajapathi in a Gujarat village, who has innovated a refrigerator which works without electricity (‘mitticool’), pressure cooker, non-stick thava, water filter, etc., in his home laboratory. He is honoured in all countries abroad, but our haughty government functionaries (Ministers, bureaucrats, etc.) have no use for the likes of him.
The observations of another expert, coming straight from her heart, so to say, will heighten our sensitivity to the miserable plight to which our government has so recklessly reduced the poor. Utsa Patnaik starts with what is obvious to us, the citizens of this country, but not to the arrogant people ‘running’ the country. She says that the most valuable resource that a country has is its people. The poor are not a liability, but are an asset. They are the producers of the essential goods and services that we use; they hold up the sky for us for a pittance of a reward. The least that the country can do is to ensure that the people get enough to eat, that their already low nutritional standards are not compromised. The present government, she says, has achieved the dubious distinction of the per capita cereal supply and consumption falling below 174 kg. by 2007, against the 182 kg. recorded by the least developed countries — and below the figure 196 kg. for Africa. By 2008, the average annual consumption in India fell further to 156 kg., owing to large exports and addition to stock. Our “leading” economists and policy makers have contributed to increasing food insecurity by their wooden-headed refusal to remove the artificial barriers to distribution, created by artificially dividing the population into ‘below’ and ‘above’ the so-called poverty line. Like the proverbial Kalidasa hacking away at the very branch in which he was sitting, the policy makers would rather let foodgrains rot than distribute them – free, if it comes to that – to feed the starving poor. J.M. Keynes had remarked that the world is moved by little else but ideas. Once a wrong idea gets into the head of a policy maker, it is very difficult to get it out. This is exactly the syndrome our wonderfully ‘policy makers’ are suffering from. For them, the “growth rate” of only the manufacturing and services sectors, and export-import trade, matters, and the rest of the country comprising about 70% of the population is of no concern.
Analysing the provision rather, non-provision-of food security to the people, Sainath referred to the observation of Supreme Court : “In a country where admittedly the people are starving, it is a crime to waste even a single grain”; the Supreme Court suggested that the grain be released to those who deserve it. Sainath says that when you have twice the grain you are supposed to stock, you have a problem. The Government of India (GOI) could distribute that grain, or release it at low prices through the public distribution system. But, the GOI would hate to adopt either of the option : that would be anathema to it and run against the grain of its “ideology” and economies! Why would the government do that after slashing Rs.450 crore from food subsidy in the current budget (2010-11)? Two arguments are always advanced against universal system — in the PDS (Public Distribution System) or other section like health : one, there is no money; two, we do not have enough grain for a universal system. Says Srinath : ‘The nation spawned 49 dollar billionaires and about 1 lakh dollar millionaires in a decade! And, the government tosses Rs.5.00 lakh crores of tax exemptions to the wealthy under just three heads in the current budget.
As noted above, the Supreme Court only made a suggestion that the foodgrains which were stored in the open and were getting damaged and/or were being eaten by rodents, could be distributed among the starving population; the suggestion should have been welcomed and acted upon. The government was, in any case, not getting any revenue from these stored grains. But, how did the government react? The Prime Minister said, while “respectfully” ticking off the Supreme Court, that tackling food, rotting grain, etc., are all policy matters (into which Courts cannot stray)! It is for his government, not the court, to decide what to do with the millions of tons of foodgrains which were rotting and going to waste.
The reaction of the Prime Minister/Government that the rotting grain is none of the business of the Supreme Court is most shocking. Even more shocking is that neither the media, nor the organisations supposedly safeguarding the human rights violations, nor the general public, showed any signs of outrage or dismay at having such an uncivilised government lording over them, and showing such indifference to the sufferings of the poor.
When the “policies” followed by the votaries of neoliberal economies force hundreds of millions to cut back on their already meagre diets, and when these policies trample on people’s rights, where can the people go except to the courts, seeking redress, what can the courts do in such a scenario, and what can the people do when confronted with the disastrous consequences of the Prime Minister’s government, asks an anguished Sainath. Dear readers, we should think that he is asking such questions on behalf of all of us concerned citizens who should be aghast at the horrendous state of affairs.
The Supreme Court observed recently, while hearing a case of an alleged encounter death, that a Republic cannot kill its own children. The same principle, the writer humbly suggests, should be extended to saying that the Republic cannot keep its children under starvation / semi-starvation conditions, and the government should be held responsible if such a state of affairs prevails — and it very much prevails so, as we have seen above.
Certainly, the government cannot be faulted if there is a genuine shortage of revenue for the government to do better than what it is actually doing. But, the facts are otherwise. The distressing — and wholly reprehensible-state in regard to storage, and distribution of food-grains among the large section of the starving poor, has been reported again and over again in the electronic and print media. The government should be thankful that the Supreme Court did not order that a detailed report should be submitted to it regarding the “policy” followed in regard to the quantum of food-grains procured for the Public Distribution System, for stock purposes, for meeting emergency requirements — on what basis the quantum of stock is decided from time to time, at what (administrative) level it is decided, what are the arrangements for proper storage (in order to minimise the losses in storage), periodical verification of stock, audit of these transactions, and action taken in the audit reports, so as to fix responsibility for the chaotic state of affairs with regard to these precious commodities.
The greatest culprit for paucity of resources is the neoliberal policy of government in ‘throwing away’ (as Sainath put it) monstrous amounts of revenue by way of “tax cuts” in favour of mainly the manufacturing and service sectors — Rs.5 lakh crores in the budget for 2010-11, and similar colossal amounts during each of the last few years. The total amount of revenue which the Central and the State Governments should have got, during this period, comes to a mind-boggling figure of Rs.20 lakh crores or more. All this money could have been used for providing real food security to the aam admi, and massive investment in education, provision of potable water, public health, health care, communication, employment generation, infrastructure for the Railways, irrigation projects and so on. That would have constituted the real gross domestic happiness of the country, as against the bogus GDP which the government is talking about.
The tax cuts – which amount to Rs.5 lakhs crores in 2010-2011 — are totally illegal and unconstitutional — being ultra-vires of the provisions of Article 266 of the Constitution which lays down inter alia that all revenues received by the Government of India shall form part of the Consolidated Fund of India, and no moneys should be appropriated there from except in accordance with law and for the purposes and in the manner provided in the Constitution. The Executive has not been empowered to forego, at its discretion, any revenue due under the laws passed by Parliament (except in those cases where the dues have become irrecoverable and should be written off under proper sanction).
The tax-cuts in favour of the industrial and service sectors, (for sustaining their so called “growth rate”) are violative of the provisions of Articles 38 and 39 of the Constitution. The latter, e.g., provides inter alia that the State shall in particular direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; and that the operation of the economic system does not result in the concentration of wealth and means of production, to the common detriment. The results of the policy followed by the government constitute the very antithesis of what is envisaged by the Constitution. It is repugnant and revolting to the extreme that such a monumental sum of revenue as Rs.5 lakhs crores, which should form part of the Consolidated Fund of India, and should be used for providing food security to the millions of aam admi and for building up infrastructure for education, health care, etc., for the aam admi, are plundered by the government and permitted by it to be retained by the fat cats of industrial/corporate barons, to bloat up their own growth rate.
Let us see how the 5 lakhs crores per annum scam is bigger than the 2G spectrum scam both quantitatively and qualitatively. So far as the 2G scam is concerned, the honourable minister of the government, reading the loss of revenue estimated by the C & A.G., from right to left could see only zeros for as long as his eyes could averse, therefore, announced triumphantly that the loss is zero, and the CAG’s estimate (and methodology) are erroneous. It is a good fortune (!) that the various Notings in the Telecom Department’s file, the advices rendered by the Law Ministry, Finance Ministry, TRAI, caveat issued by the Prime Minister to then Minister, his peremptory reply to that, and so on, are available. The documents in the Ministry have been thoroughly examined by the C & A.G., and his report has been submitted to the Ministry and placed before Parliament, whose P.A.C. is now examining the Audit Report. One thing, however, which is not clear is this: what will the government which is scared out of its wits by a mere J.P.C., do when the country is faced with external threats from its inimical neighbours? Will these leaders just pack up and scoot? How can a government function without showing the least bit of guts to solve problems?
On the other hand, the Tax cut scam of Rs.5 lakhs crores during 2010-11 and figures of that magnitude in the earlier years are (happily for the government and the rich corporate beneficiaries) free of any control whatsoever. The government is raison detre for these monumental tax-cuts is that they are necessary for a “growth rate” of 9% and above in the GDP, which is a sine qua non for the economic growth of the country. But, the government has not come out with any study to show what the (wretched) growth rate would have been, and what catastrophe would have befallen the country (and its people) if these lakhs of crores of revenue due from the industrial, service, etc., sectors had not been forgone.
There are no data reports to show how the growth rate of 8% and above, is the direct result of this “fiscal stimulus”. According tot he government, the GDP had grown by 8.6% during the period April-June, 2010; the economy had grown by 7.4% in 2009-10 and merely 6.7% in 2008-09 due to the “financial crisis”. The services grew by 9.7% as against 7.9% last year, while the agriculture grew by 2.8%, as against 1.9% a year ago. Despite all this breast-beating, industrial growth nosedived to a dismal 2.7% in November, 2010 from a “robust” 11.2% expansion “notched up” during November, 2009. There is nothing to show that there is any correlation between the wonderful growth rate and the “fiscal stimulus” given to those sectors by short realisation of revenue running to lakhs and lakhs of crores of rupees. Frederick Von Hayek, the founder of “neo-liberalism” himself insisted that we could never know the aggregate outcomes of individual actions in macroeconomics; he admitted that our successes or failures are due to chance, not to our judgement and action, and added that we must conceal this lest the public lose their will to work.
So all this talk of government that the “fiscal stimulus” has enabled the manufacturing and service sectors to achieve a high growth rate, and propelled India to become one of the countries with the fastest economic growth, is all so much gobble de gook, to conceal the plunder that is going on. No details are given as to the Corporate houses which were the beneficiaries of this bonanza, the extent of their share, how they utilised them, and so on. We can be sure that a good part of this Rs.5 lakhs crores, has gone to speculation on the Stock Exchange, Commodities Exchange, “investment” in futures trading, real estate, and so on. The beneficiaries will, of course, have to fund the Election expenses of the ruling parties, so that their patrons, come back to power, and the game can go on. There is total lack of transparency as to the details of utilisation, benefit to the country and the people (by which we mean the aam admi) which should be set off against the infinite social costs which have ruined the aam admi and left the country bankrupt of funds for social services, infrastructure, etc. There is no check, no accountability, no audit — it is plunder of public money, pure and simple!
To state the obvious, “India Inc.” has gained the most. It has seen a strong growth in sales and profits so far during this “fiscal”. Companies in Sesex and Nifty – the top Indian Corporates, have seen their profits increase by 18 to 20% in the first six months of the fiscal 2010-11. For the quarter ended September, 2010, the BSE 500 companies — a group of medium and large firms, have seen net profit increase by 20% over the last year. The Industry bodies, like man-eating tigers which have tasted human blood however, say that the fiscal measures should be estimated for one more year, as they hope that by then the U.S. would have seen recovery and European consumer markets will have taken a U-turn; that is to say, our poor people should be ground further, till other economies pick up. We can be sure that the corporate will have their way. Why? Abraham Lincoln is believed to have said (as Nirmala Sitharaman has mentioned in one of her articles): “I see in the near future a crisis approaching; that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed.” What wonderful prescience Abraham Lincoln has shown. What he has said fits to the present state of our country. How is it that, in this country of the one billion (or more) people, there is not a single person who can see the plunder of the revenues of the country by the people at the helm, by the simple use of the shibboleth of “fiscal stimulus” for the so-called growth rate of 8% and above (in the manufacturing and service sectors).
There is no need to labour on the unprecedented level of “prosperity” attained by a small section of the population. Its effect on the aam admi has been brought out by me at painful length, in the torrid hope it will stir the conscience and sensitivity of the concerned citizens, to realise that it is time to act and stop these brigands in their unfettered plunder of the country. It may be already too late for that; but, the effort must be made. A cartoon is a national daily has forcefully brought out the cataclysmic situation which is prevailing vis-a-vis the aam admi. The cartoon shows the skeleton legs of the aam admi protruding from the right side end of the cartoon, while the troika shouts: “NO ONE MURDERED THE AAM ADMI”!
Unshaken by such human tragedies, a senior Minister boasted recently, with characteristic arrogance, that the government, based on its achievement of 8% growth rate and more in successive years, will be ruling the country for the next 10 years, ad inf. To such arrogance, our reply is to remind them of the following lines from Omar Khayyam:
“Think, in this batter’d caravan serai whose portals are alternate Night and Day.
How Sultan after Sultan with his Pomp Abode his destined Hour, and went his way. They say the Lion and the Lizard keep the Courts where Jamshyd gloried and drank deep.
And Bahrim, that great Hunter-the wild Ass stamps o’er his Head, but cannot break his sleep”.
This ultimate fate of all Rulers should be a sobering thought to the present Rules of the country!
by C. A. Balasubramanian, Addtl. Controller General of Accounts, GOI (retd.)