A WAY OUT FOR SINGUR - Farmers can still be given a stake in the ownership of the plant

http://www.telegraphindia.com/1080829/jsp/opinion/story_9758630.jsp A WAY OUT FOR SINGUR - Farmers can still be given a stake in the ownership of the plant

Cutting Corners

Ashok Mitra

The acquisition of land by state agencies to meet specifications set by private sponsors of industrial projects has emerged as one of the gravest of national concerns. Industry without land to build it upon is inconceivable. Even so, in an overpopulated country where, despite six decades of independence, three-fifths or more of the nation continue to be dependent on agriculture for their livelihood, land acquisition is no easy matter; and this irrespective of the nature of compensation offered. There is a crowding of uncertainty in peasant minds. The process of capitalist development, very often labour-displacing, does not assure those dispossessed from land that a fair number from amongst them would find employment in the factories coming up on the holdings they once tilled. It is a sensitive issue, needing delicate handling. Such delicacy is additionally called for when it is a Left regime long championing the cause of the deprived, land-hungry peasantry — as in West Bengal — that has to do the acquisition. Such is the story of Singur. The Tata Group made an overture to the state government to set up a small-car factory with an annual production capacity of 3,50,000; each car was promised to be sold at Rs 1,00,000. The Tatas wanted 1,000 acres of land for the purpose, with good access to Calcutta and the national highways. They chose, with state government approval, a tract of contiguous land in Singur in the district of Hooghly. This consisted of arable plots with quite a few holdings taking two or three crops. According to all accounts, the state government did not do any serious bargaining with the Tatas on the choice of land, nor did it try to persuade them to pick non-arable terrain in the dry, remoter districts. Much worse, it did not think it necessary to have prior consultations with local panchayat bodies or with representatives of peasant organizations. A statute enacted in 1894 during the colonial heyday was deployed to take over the land. Resistance gathered and soon assumed a truculent form. Political groups of diverse hues coalesced to take advantage of the situation; agitation often tended to go out of hand. The Tatas, with help from the state government, nonetheless managed to take possession of the land. Work has been in progress, even though protests, determined and well-organized, have continued, sometimes leading to violence. As the dateline for releasing the car in the market approaches, the main opposition party in the state has threatened a total blockade in the area. A kind of showdown has been reached over the refusal by owners of holdings totalling up to 400 acres to accept the money offered by the West Bengal Industrial Development Corporation for their taken-over land and their demand to have the holdings back. The price offered by the state agency was, in fact, substantially higher than the prevailing market price; this is true even for the 400 acres at the core of the dispute. Discontent, however, has persisted. Heavy reverses suffered by the Left Front in the area in the recent panchayat polls have further queered the pitch. Opposition groups have mobilized their forces and are adamant regarding the refusal to allow the newly-built cars to move out of the factory site unless the holdings belonging to the recalcitrant farmers are returned. It is, without question, an explosive situation. Should the forces of law and order attempt to clear the blockade by adopting rough, crude measures, it could lead to an extensive bloodbath. That would make the mess a great deal messier. It is time for a cooling of heads on all sides and for accepting ground realities howsoever distasteful. To restore to unwilling farmers land ‘snatched’ from them is clearly not feasible, but not for the reason the state government has been adducing. The 1894 act, it has been claimed, allows no scope for returning land once acquired. This is a fatuous argument. The government can apply the provisions of that particular act itself and wrest back from the Tatas the 400 acres on the ground of ‘a public purpose’. Restoration and maintenance of law and order in the state are overriding public purposes in all situations. Still, these holdings cannot be returned for an altogether practical reason. The contentious plots are discrete, scattered all over the factory site and constructions have already come up on them. Even if it were possible to identify the individual plots, to demand them back at this stage is in effect to demand the dismemberment of the plant. If, because of the doggedness of resistance, the Tatas were to fold up, public opinion, already under intense siege by the media, could well swing against those currently manning the barricade. At the same time, in case no positive gestures are shown towards farmers on whose behalf such sustained mobilization of forces has taken place, antipathy against the Left Front regime is unlikely to abate. The Tatas too would have to consider carefully the burden of cost if circumstances tempt them to abandon the Singur project. It would be far more desirable to aim at a compromise everybody concerned could live with. A discarding of closed minds is called for. The Tatas have their reasons to act superior, but they could not have acquired on their own the land now in their possession unless the state authorities moved on their behalf. They have made only a token down payment for the acquired land. Moreover, the discounted present value of what they have promised to pay in instalments to the WBIDC in a very distant future is next to nothing. And not just that; the state government has provided them with a cash loan of Rs 200 crore and granted a VAT holiday for the cars rolling out of Singur. The way out of the Singur impasse lies in re-negotiating the terms of the agreement between the state government and Tata Motors. The latter should be persuaded to make immediate arrangements to give a separate legal corpus to the Singur enterprise. Twenty-five per cent of the equity of this entity may be transferred to the state government as compensation for the land and other facilities promised to the industrial giant. The state administration could follow this up by taking two separate initiatives. First, it could announce a 100 per cent bonus payment over and above the price at which holdings have been acquired for the project. The bonus is to cover all the acquired plots, including those for which payment is outstanding. The state authorities, anxious to get things back to normal, have already hinted at their willingness to consider such a measure. The second initiative the state government must take is of far greater significance. Of the 25 per cent of the total equity passed on to it, while it could keep 12.5 per cent for itself, the other 12.5 per cent should be distributed among the owners, the sharecroppers and the workers regularly employed in each taken-over holding. Consider the implications of the proposal. The Tatas are on record that they will assemble 3,50,000 cars in Singur every year. Assuming they hold the price at Rs 1,00,000, and the rate of return is about 10 per cent from the sale of each car, the expected annual profit from the project should be around Rs 350 crore with full capacity production; the accrual for the state government would work out to roughly Rs 45 crore; another Rs 45 crore would flow to the farming community. As part of the total package of the new agreement, the state government could ask for a seat on the board of directors of the Singur corporate unit. It might thereby ensure that the details of the understanding are duly pursued and the planned ancillary units provide satisfactory scope of employment for the neighbourhood youth. With the peasantry assured of a stake in the ownership of the Singur plant, it is bound to be a totally transformed situation. One has at least reason to hope so.

You are not what you were - Ashok Mitra after 14th November, 2007

http://sanhati.com/articles/446/

November 15, 2007

By Ashok Mitra. Translated from Bengali by Debarshi Das, Sanhati.

Till death I would remain guilty to my conscience if I keep mum about the happenings of the last two weeks in West Bengal over Nandigram. One gets torn by pain too. Those against whom I am speaking have been my comrades at some time. The party whose leadership they are adorning has been the centre of my dreams and works for last sixty years.

Let me start with the governor. Those who remember Anantaprasad Sharma or Rajeshwar would readily admit that it’s a great fortune for this state and the State Government that they have someone as gentle, well-mannered, sympathetic, modest, erudite as Gopal Krishna Gandhi as the governor of the state. Let me also add he had consented to the post because of the interest shown by the central leadership of the ruling party. What has been his grave fault that the ruling party is so determined to declare even him as its enemy? Through a travesty of truth it is being said that governor has termed the return of those who were forced flee Nandigram to take shelter in Khejuri as illegitimate and unpardonable. He has not done so. He has condemned, in no uncertain terms, the way in which they have been brought back. By now the machination that went on behind the return is known to the world. The government had had enough scope to rehabilitate these devastated people in their own homes through political mediation or administrative arrangements during the last eleven months. The attempts through unilateral threatening, police action, indiscriminate firing had a tragic end. But there were still many avenues left to be explored. The government could have announced compensation for the family of dead and injured immediately after the idiotic incident of firing. Promises could have been made to take action against the police officers and personnel involved in the crime. Days passed, and the government did nothing. Announcement was made in the fashion of Vijay Tendulkar’s play’s title, “Shantata, court chalu ahe.” The senior most political leader of the state and the country had to take the initiative to call up Mamata Banerjee, sit and discuss with her a few conditions for resolution. The government was intimated of them. It did not proceed on them. On the initiative of the senior leader of Forward Bloc, Ashok Ghosh, an all-party meeting was convened. That also got stalled due to indirect pressure from the ruling party. In the meanwhile, as was inevitable, opposition parties started using the unstable situation of Nandigram to their own advantage. The flame of tension was kept burning by a variety of organisations of different colour and class. The discontented whining one hears from the ruling party over this has no rationale whatsoever. The responsibility of unspoken suffering of those who spent eleven months as homeless rests squarely upon the shoulders of the government.

It is better to look further into the past. Nandigram was not after all the first blood. Singur episode had happened before that. The Left Front Government does not like nationalised industries. They want to set up private industries in the state. Hence there are promises to acquire land on behalf of the national, international capitalists. That land would supposedly be used by capitalists to set up industries. Since there was declaration of industrialisation in the election manifesto, and since they have won 235 seats, it was readily assumed that there was no need for preparations. All of a sudden peasants were told: leave the land, the masters would set up industries here. If it had learned minimum lessons from the protests, clashes and the blood letting of Singur, the government would have been more careful in Nandigram. But that was not to be. It remained as arrogant as ever. Even the top leaders of the ruling party have been saying there was no existence of the opposition parties in Nandigram. The government itself provided them with the opportunity to grow. The loyal followers of the ruling party declared revolt and those who were not with them were driven out. The onus of this rests on the government as well.

For eleven months complete silence and inactivity were carefully maintained, no political or administrative alternative was explored. And suddenly a new plot was hatched. As has been repeatedly admitted by the home secretary, the police was instructed to remain inactive. Mercenaries were collected from across the state. Workers of the ruling party encircled Nandigram from all directions. Birds, bees, flies, journalists none was given the permission to penetrate the blockade. And then the light brigade of the ruling party charged in, beat the wayward militants of Nandigram to a pulp and into submission. Those who had fled returned. However the moment of their return saw a parallel and opposite incident. Houses were torched anew, those who were inside Nandigram were butchered in a massive celebration of revenge. Presently, the Nandigram sky is reverberating by the scream of the recent batch of refugees.

The governor must have been informed of the developments by the secretaries. Much concerned, he must have appealed to the honchos of the ministry to keep peace. But to no effect. The rampage is going on as we speak. And so is the blood bath. The governor has made a public statement condemning the incident. I don’t know if what he said, how he said it falls within the framework of the constitution. Those who have not forgotten the framework of humanism, however, will not have two minds about it.

The problem does not involve Singur and Nandigram alone. It is much more deep and serious. The repetition of mistakes has become a habit. Just consider this for a minute. It has only been a year and a half since the Left Front has won a massive mandate; and what examples of arrogance and stupidity during this brief span! Come what may, we shall have control over every nook and corner of the state. The cricket board will get its chief elected to our dictates. If our candidate loses we would say, “evil power has won, we will chase him out.” Not only the ordinary people, economic thinkers have offered diverse views over land acquisition in Singur and Nandigram. These different opinion holders are nothing but bookworms, what do they know about running a government! Consequently prominent economist and party comrade of the stature of Prabhat Patnaik is hounded. We are an all-knowing government: from cricket, poetry, theatre, films to the magic of land acquisition – we know everything. Neither should anyone lecture us on the pros and cons of the nuclear deal, for we have won 235 seats. Jyoti Basu won more seats in 1987; he was not heard to mouth such hubris.

Not only hubris, add inaptitude to it. Decades have passed shouting hoarse about universal education, and still West Bengal is behind so many states. Money is flowing in from the centre for employment generation schemes, there is zero administrative initiative, the hungry and the unemployed go hungry and unemployed. The centre has arrangement for wheat and rice; these are not even lifted so that they could be sent to the middle and lower class through the ration system. There are uncountable errors and omissions in the list of people living below the poverty line. The shortcomings in the state over empowering the minorities have been detailed in the Sachar Committee report.

Take the incident surrounding the death of Rizwanur Rahman. If the police chief of Kolkata along with his cohorts were removed the very evening in which he let his social philosophy known at a press conference and if the investigation were handed over to the Central Bureau of Investigation, public rage would not have assumed such ominous proportions. Instead we witnessed an extraordinary serial exhibition of a strange paralysis. Examples go on mounting.

Three decades ago when the Left Front government took the oath of office it was not to sit at Writers’ building and indulge in empty talks. But to be one with the people, listening to it and after realising the advice of the people with due humility to design government programmes to implement it. Improvisation of the Panchayat system was precisely for this purpose. Yet all this have somehow become stagnant. Though panchayats are elected democratically they are in a sorry state today. The little money that reaches them is not properly utilised, plenty of it disappears into dark tunnels.

It is not possible therefore to avoid the unpleasant truth anymore. One can borrow S. D. Burman’s song to describe what the Communist Party of India (Marxist) was in this state a few decades ago, “you are not what you were.” 90% of its members have joined after 1977, 70% after 1991. They do not know the history of sacrifices of the party. To them ideological commitment to revolution and socialism is simply a fading folktale. As the new ideology is development, many of them are associated with the party in the search for personal development. They have come to take, not to give. They are learning different tricks so as to appropriate various privileges by aligning with the governing party. One efficient way to bag privileges is to flatter the masters. The party has turned into a wide open field of flatterers and court jesters. Moreover, there has been a rising dominance of ‘anti-socials’. For different reasons, every political party has to lend patronage to ‘anti-socials’, they remain in the background and are called into duty at urgent times. In the seventies these anti-socials had reached the top rung of Congress party. I fear same fate is awaiting the communist party.

Many of the old people, long time and still party members, who have been through numerous sacrifices and are idealists, are a disheartened, disillusioned lot today. But any organised protest will face party disciplinary action, what will be their support in the twilight of life if the party throws them out?

I feel sorry for Mr. Jyoti Basu. Of the four ministerial colleagues who took the oath as members of the first Left Front government with him on 21st June, 1977, only I am still alive. His current state of an imprisoned Shah Jahan saddens the heart deeply. State leadership does not heed the little advice he tries to offer from time to time. If his talks are a tad uncomfortable for the party they are not published in the party organs. Every Friday after the meeting of the party secretaries he comes down stairs and is made to say different things; what he says today may completely be the opposite of what he had said the last time.

But my real concern lies elsewhere. Mamata Banerjee is the safest insurance for the current ruling party. Urban, rural masses may have become discontented with the Left Front, but whenever they imagine Mamata Banerjee’s ascent to power, the sheer terror of that possibility has made them vote for the Left Front. But if it comes to a situation that the hubris and ineptitude of leaders of the Left Front government frustrate them so much that they begin to think there is no difference really, it’s all tweedledum and tweedledee, that will be a real disaster. For notice the behaviour, patronage, programme, mode of action, speech of Mamata Banerjee – she personifies fascism. My ardent appeal to the central leadership of the party which I still love to think to be mine, please think it over, you shiver at the terror of Maoism, will that shivering compel you to throw West Bengal into the gutter of fascism?

The original article appeared in The Anandabazaar Patrika

Ashok Mitra in Anandabazar

http://www.anandabazar.com/archive/1070418/18edit3.htm

Santa Claus visits the Tatas - Freebies from a debt-ridden government

http://www.telegraphindia.com/1070330/asp/opinion/story_7580979.asp


Cutting Corners - Ashok Mitra
The uproar over Nandigram — and Singur — in West Bengal will not die away soon. Competitive democracy has its own laws; those opposed to the party ruling in the state will try to squeeze the maximum advantage from the discomfiture it has brought upon itself.
Speculation continues on the riddle as to why, despite repeated assurances to the contrary, the state administration fell back on a colonial-type police offensive to re-assert its authority in Nandigram. The underlying reason, informed sources suggest, was a strong message from the Salim group, who were promised vast stretches of land in the area for their chemical hub project; they might move away elsewhere, the message said, if the land was not handed over to them within the next few weeks. That set the panic bell ringing; the sequel has been horrifying.
Nothing illustrates more glaringly the spell globalization has cast on the country, even on those whose ideology and praxis should have prepared them to cope with it in a better manner. Industrialization, the rationale of which few will dispute, is being taken to be synonymous with industrialization under private auspices. To talk of industrial growth in the state sector is assumed to be heresy. Questions such as whether a particular private project will actually lead to a net increase in employment or output are discouraged too. Fables are having a field day: the private sector means efficiency to the nth degree, public enterprise is the other name for sloth, incompetence and wastage. The stunning achievements of the National Thermal Corporation, Bharat Heavy Electricals, Nalco, the Oil and Natural Gas Commission, the Gas Authority of India or the Indian Oil Corporation in recent years are conveniently ignored. Also brushed aside is any reference to the huge resources at the command of public sector fiscal agencies such as the Life Insurance Corporation of India and the Unit Trust of India.
As in the other poorer countries, here too fiscal devices are introduced at the behest of US-led international financial institutions to compel ruling politicians to desist from taking new initiatives in the public sector. The Fiscal Responsibility and Budgetary Management Act is being applied to admonish both the Centre and state governments not to ‘fritter’ resources on public sector extravaganzas. There is, in consequence, a gradual maturing of the belief that industrial activities are a natural monopoly of private entities, foreign as well as domestic.
The Left Front in West Bengal is the product of a historical movement which had as its credo the expansion of public goods and industrial growth through the deus ex machina of the public sector. Those currently in charge of the Front government in the state have apparently convinced themselves that, in the era of globalization, ideological shibboleths are poison, development ipso facto is development sponsored by the private sector, the government has only the residuary obligations to acquire land, on behalf of private tycoons, on which industry is supposed to be set up, and, in addition, provide costly infrastructural facilities the private sector will not build on its own because of their low profitability.
Once development is defined in such constricted terms, maximizing the rate of return for private operators becomes the only criterion by which to judge success. The logic is simple: if private profit expands, capitalists feel good; if capitalists feel good, they will expand their activities and the economy will have growth. The state government does not dare to enquire whether activities undertaken by capitalists will be on the basis of any careful analysis of costs and benefits, or whether in deciding the technology for the investments undertaken, alternative choices will be considered. Fifty years ago, when official faith in economic planning was still extant in the country, any investment proposal would be examined, taking into account the expected rate of income growth, the expected rate of employment growth and the expected rate of surplus or profit. With the eclipse of the planning era, such elementary practices have gone the way of all flesh; the only desideratum regarded as relevant is the expected rate of generation of private profit.
This transformation is illustrated most luridly by the details the state administration in West Bengal has finally been forced to disclose concerning the agreement it has reached with the Tata group apropos the small car project at Singur. The Tatas are, of course, rolling in money. Only a couple of months ago, they invested a sum roughly the equivalent of Rs 50,000 crore to take command of a giant international steel complex. To persuade this fabulously rich group to start a modest-sized car factory here, the state government has already spent something around Rs 150 crore to acquire close to 1,000 acres of land. The least that was expected was that it would recoup this amount from the Tatas. Nothing of the sort. Instead, the Tatas have been handed over this entire tract of land on a ninety-year lease without any down payment at all. For the first five years of the lease, they will pay only one crore rupees; for the next twenty-five years, the payment will increase by 25 per cent at five-year intervals; for the next thirty years payment will be raised at five-year intervals by 33 per cent; for the final twenty years, the rent will be only Rs 20 crore per year.
The discounted present value of what the Tatas have agreed to pay, any respectable accountant will vouchsafe, will hardly exceed Rs 50 crore. Equally necessary to take into account here are the historical trends in the rate of inflation and the likely explosion of real estate values through the decades of the 21st century. The conclusion is incontrovertible: the government is, really and truly, making a free gift to the Tatas of the land in Singur.
That is, however, only a minor part of the story. The state government is, in addition, offering the Tata group a gift coupon in the way of a loan worth Rs 200 crore carrying a nominal interest of only 1 per cent (as against the rate currently charged by the banks of at least 10 per cent); the principal, one suspects, is never intended to be returned. Finally, in terms of the lease agreement, the entire proceeds for the first ten years of the value-added tax on the sale of this precious car in West Bengal are proposed to be handed back to the Tatas, again at a nominal interest of only 1 per cent. If 40,000 cars are sold every year in West Bengal — not an unreconcilable assumption — with a value- added tax at 12.5 cent, this particular act of magnanimity on the part of the state would ensure an extra bonanza of more than Rs 500 core for the Tatas.
All told, therefore, the group is being offered the allure of around Rs 850 crore by the state government, apart from their being spared the bother of acquiring the land through their own efforts. The deal does not though mention what the Tatas are, in exchange, offering West Bengal. There is not even a stray reference to the likely employment, direct or indirect, consequent to the setting up of the plant. Were the employment generated not to exceed 10,000, that would just about equal the number of share-croppers and landless farm workers displaced at Singur following the acquisition of land. The state’s outlay of Rs 850 crore would be for nothing.
Suspend the debate over the ideology of development. Also steer clear of the pastime of apportioning moral responsibility for the deaths and other incidents in Singur and Nandigram. Forget for the moment the dubious economics too. What about one’s sense of aesthetics though? Does it not appear obscene that a state government, carrying a burden of debt of more than Rs 150,000 crore and with a countless number of problems, would offer a freebie of Rs 850 crore to an industrial group which has made an outlay of over Rs 50,000 crore only the other day to satisfy their expansionary ego overseas?

TROUBLES ARE HERE TO STAY - The concept of SEZs is a prescription for disaster

http://www.telegraphindia.com/1070219/asp/opinion/story_7406407.asp


TROUBLES ARE HERE TO STAY - The concept of SEZs is a prescription for disaster
ASHOK MITRA

One does not need any proficiency in reading the economist’s abracadabra to explain the bane of jobless growth currently afflicting the Indian economy. Common sense is enough, commonsense in regard to what liberalization is about.
The major planks of liberalization have consisted of the following. First, a gradual withdrawal of the State from economic activities, alongside selective disinvestments from public undertaking. Second, while the public sector has shrunk in industry and commerce, the proponents of private enterprise have themselves pressed the government to play a larger role in developing economic infrastructures that cost huge chunks of money but yield low returns. In all parts of the country, the authorities have been generous to help entrepreneurs acquire land and obtain power and other attendant facilities. Third, even as building infrastructure for industry and services has been assigned high priority, there is simultaneously a de-emphasis on public investment in agriculture. And finally, all this has been accompanied by the decision to scrap anti-monopoly statutes, lower direct taxes across-the-board, wind down the public distribution system, and rapidly dismantle tariffs and quantitative restrictions on imports.
In the changed environment, service activities, particularly IT-enabled services, have flourished most. Progress has taken place in such other service activities as banking and insurance, tourism and entertainment. With supply side restraints removed, private initiative has expanded in different directions, leading to gross domestic product growing at a rate of 8 to 10 per cent per annum. Services are growing at the rate of 10 to 12 per cent and industry at around 6 to 8 per cent. The farm sector is, however, lagging behind because of infrastructural handicaps. The rate of growth here is hovering between 1 and 2 per cent, in some years actually falling below the rate of population growth.
Therein lies the problem. Industries, including service industries, are free. They are also free to choose the technology they deploy at their workplace and the government has no say in the matter. Since the primary aim is to survive in international competition, entrepreneurs naturally are inclined to opt for the technology that incorporates the latest advances. Adopting a technology of this kind certainly involves sinking of sizeable capital. But if the rate of interest is low, the financial burden will not be that heavy. Besides, a capital-intensive technology reduces the requirement of labour. Where interest on money borrowed to purchase equipment is not much of a factor, entrepreneurs will prefer a labour-saving technology to a labour-using one. An additional consideration: a machine is mute, it does not go on strike or cause any other trouble.
With freebies from the government, including cheap money, services have grown at a fast pace in the Indian economy; manufacturing too is flourishing. However, in both sectors, there is no corresponding increase in employment. Check the data, the volume of employment organized industries and services has either contracted or increased only marginally over the past 15 years. Employment has grown significantly only in what is described as the ‘informal sector’. A large number among those displaced from land, because a new industry or services unit has to come up on it, is not getting absorbed in any industrial or service occupation. They swell the crowd of those others who have lost their jobs because of computerization. This multitude tries to eke out a living through casual work here and there, or by setting themselves up in some small-scale trade. It is this category of people John Maynard Keynes had chosen to describe as belonging to the universe of disguised unemployment.
Industrialists have their point of view. For the sophisticated equipment they have installed, they need skilled labour. A farmer who has surrendered his land, or has been deprived of the opportunity of working in someone else’s land (because such land has been taken away for non-agricultural purposes) is therefore left to graze on his own. In any event, a capital-intensive technology can absorb only a limited quantum of labour.
A question can be raised whether growth which either reduces or stagnates employment should not lead to a problem of demand deficiency in the economy. Apparently not. The IT-enabled services are, in nine cases out of ten, dependent on foreign demand. Demand emanating from the upper crust of society, which has benefited from liberalization, also helps to absorb the supply from fast-growing manufacturing and service industries.
Those enjoying the good times do not bother to stop and think of the plight of the unemployed and under-employed. Had the State any say in the choice of technology for the booming private sector, the crisis might not have assumed the magnitude it has. Harmonizing the rate of displacement from agriculture and small-scale industrial units with the rate of absorption in organized industry and service would not then have been an altogether unlikely proposition. As things now stand, the government, however, has no say in the matter. For the private entrepreneur who has been liberated from all shackles, the only technology he chooses is that which maximizes his rate of profit. It is not his or her concern whether employment grows or worsens.
A further point is worth taking note of. In the industrial revolution which transformed Great Britain and the rest of Europe in the late 18th and 19th centuries, industrial technology was still at such a relatively simple stage that workers crossing over from farming did not face any major problem of adaptation. The picture is qualitatively different now. For survival in today’s competitive world, entrepreneurs, even in under-developed economies, think it necessary to cross over to the same technology as, for instance, the United States of America has. In the relatively labour-scarce American economy, the natural preference is for embracing a capital-intensive technology. Replication of such technology in our case cannot but have a devastating effect on employment.
It is particularly in this context that the concept of Special Economic Zones, one feels, is a prescription for disaster. By exempting entrepreneurs from excise and other forms of taxes and duties and from observance of labour laws, the government is making it easier for them to bear the financial burden of high-cost labour-displacing technology. The upshot is homage to the phenomenon of jobless growth.
Nothing illustrates better the peril of a total withdrawal of the State from the industrial landscape. Where the government invests directly in setting up a plant, it is in a position to decide the technology to be used and thereby ensure a minimum absorption of labour within its own spheres. Private entrepreneurs, in contrast, do not have to worry over such issues. Neo-liberal philosophy has relieved them from the nuisance of having a public conscience. This sets them sharply apart from liberals of the old school like the Cambridge economist, Arthur Pigou, who always insisted on differentiating between private product and social product, and between private cost and social cost. The private sector, Pigou did not have any doubt, must be compelled to bear the social cost — such as net loss of employment and spread of pollution — that private development brings about. It will be considered in today’s milieu a good thing that old fogeys of this genre are no longer around.
But while the old fogeys are dead, the problem of what Marx had described as the great reserve army of labour is still around. Economic liberalization will, inevitably, lead to a steady increase in its numbers. They will refuse to take the course of self-annihilation. The trade unions, temporarily in disarray because of the onslaught of liberalization, will then experience a revival. Once that moment arrives, chances are that both official policy-makers and industrial tycoons will be forced to echo the sentiments of that Beatles song: “Yesterday, all my troubles/ Seemed so far away/ Now it looks as though/ They’re here to stay.”

REST IN PEACE - India’s agrarian crisis has the WTO’s signature all over it

http://www.telegraphindia.com/1070105/asp/opinion/story_7219557.asp
REST IN PEACE
- India’s agrarian crisis has the WTO’s signature all over it
Cutting Corners
Ashok Mitra

Imperialism is still the highest stage of capitalism. But the first decade of the 21st century is a different proposition compared to the first decade of the 20th. It is no longer territorial imperialism, but imperialism via trade, which depicts capitalism’s pristine phase. The World Trade Organization, which is basically a concordat of the United States of America and the west European nations, is, some will say, acting as the deus ex machina, so that international capitalism could fulfil its ordained mission.
It is therefore an iniquitous world. Millions of farmers in Latin America, Africa and south Asia are, at present, direct victims of the wondrous regime set up by the WTO. With the gradual dismantling of quantitative restrictions and tariff barriers, the peasantry in the poorer countries is facing rack and ruin. A whole range of farm commodities can be offered for trading by the technologically advanced Western countries at prices that would not cover farmers’ costs in the poor continents. One reason is the neo-colonial edict: some are more equal than others; subsidies are out for farmers in India, Pakistan or Bangladesh, but not for those in the US, or in France.
Basing themselves on the rationale arrivable from such fraudulence, a group of Western economists have enunciated a breathtaking theory. Since they are failing to meet global competition, farmers in the developing economies should move away from primary production, and that task be left to the care of the Western countries which are as efficient in agriculture as in several branches of industry. The poor nations should concentrate on lowcost service activities generating inputs for sustaining growth in the industrially-advanced nations.
The agrarian crisis in India has the signature of the WTO fiats written all over. Whether it is wheat, rice, corn, cotton, tobacco or sugarcane, the market is being flooded by imports from North America and Europe. Whatever improvements in productivity were inducted into Indian agriculture four decades ago via the so-called New Agricultural Strategy have now exhausted their potential, and it is increasingly difficult for the Indian peasantry to face competition from imported farm products. Owners of bigger-sized holdings, such as those exceeding 20 acres, will still find it possible, at least for some more time, to withstand the heat of competition from overseas on account of various economies of scale they enjoy. But they too have their doubts about how long they would be able to cope with the consequences of trade globalization. Many of them are accordingly showing an interest in entering into contract farming arrangements with foreign corporates, which might allow them to survive in the long run.
The dilemma faced by middle-level farmers is far more acute. The king of economies of scale rich peasants can reap advantage of is beyond their reach. They are, therefore, directly at the receiving end of the tribulations caused by the WTO’s hectoring. The incidence of suicide is fairly high among this group; many of them borrowed heavily to expand their farming activities and have failed to repay.
But not all peasants have the nerve to commit suicide. Some of them are victims of a troubled conscience; it would be a gross sin to disappear leaving their families in the lurch. Quite a few among these middle peasants have discovered an alternative escape route. The sudden spurt of special economic zones in different parts of the country, under the benign patronage of the Centre as well as several state governments, has led to a boom in land prices. Foreign investors — and some domestic parties as well — are also coming in with their lush schemes to sink money in developing such symbols of luxury living, as high-rise residential townships, wide eight- or ten-lane motorways, fly-overs, pharmaceutical hubs and food parks; they are only too eager to take over land from the struggling farmers. Besides, the demand for land is being further accentuated by new trends in tourism, including health and sex tourism.
The middle peasants in different parts of the country have thus been offered life-buoys to keep them afloat in the ocean of economic distress. Land speculation is reaching crazy heights, and providing an opportunity for survival to those land-holders whose returns from cultivating activities have taken a dip owing to depressed farm prices. They do not have to take, they have discovered, the course of self-annihilation; they can sell their land and fulfil their tryst with destiny. The authorities on their part have been most generous and eased the land-ceiling laws. Middle-level farmers often have enough organizational acumen and financial buffer to allow them to bargain effectively for the land they put on offer. Once they receive a reasonable sum from the sale of land, a number of choices are again open. They can put the money in time deposits with the banks, draw the interest, and enjoy good living in the manner of a proper rentier. Or they can invest a part of the money in the share market, thereby giving themselves the chance of doubling or tripling the money they received from land sales.
The problem is of an altogether different genre for very small peasant proprietors — who often themselves cultivate the tiny plot of land they own — and landless farm workers. A small peasant, owning at best a couple of acres of land and most of the time much less, does not have any staying power. He cannot afford to bargain for long with the land sharks. Not surprisingly, he is forced to sell the pittance of his land at an exceedingly modest price. Some wise ones may advise him to place with a bank the cash that he has got by selling the land, and live on the interest earned. But since the size of his land is very small, the sum earned from its sale is paltry too, and the interest likely to be earned if this sum is deposited with a bank will be equally paltry. The small peasant proprietor therefore reaches a dead end.
Much worse is going to be the plight of the millions of agricultural workers who labour on a daily basis on the holdings being given away to the SEZs and to promoters of ritzy hotels, highways, fly-overs and tourism treats. Where will they find any alternative occupation? The new facilities that come up are unlikely to absorb even five per cent of the farm workers who are deprived of their occupational pursuit.
Such grim prospects for a substantial segment of society obviously do not stir the conscience of policy-makers. The argument put forth by policy-makers seems to be flawless. The population at large will benefit from import of cheap grains, textiles and suchlike from overseas; also because of dismantling of trade barriers, export of IT-related service-activities is growing by leaps and bounds; after all, one cannot have everything together in life; we cannot aspire for an eight to ten per cent annual growth in gross domestic product and yet carp about rural unrest or lessening employment. That apart, has not the rural employment guarantee scheme been set up to offer relief to the poor?
The top decile of Indian society is experiencing unprecedented prosperity. It will import more and more of consumption goods from overseas, thereby denying the poor the privilege of producing these goods domestically. The poor in the countryside will continue to starve and die. But has not that been an integral part of the India which the world has known since antiquity; why get worked up over it?

ENDING THE DARKNESS, OR EMBRACING IT?

ENDING THE DARKNESS, OR EMBRACING IT?
Ashok Mitra
[Transcribed by Dola Sen; (Courtesy: Shramshakti, June 2006)]

A lot of wisdom is being freely distributed nowadays. Since the breakdown of the experiments with building socialism in Eastern Europe, it is being said that the philosophy on which socialism is based has been comprehensively defeated too. The second thing being oft repeated is that for the last fifteen-sixteen years the onset of globalisation has utterly transformed the old ideas about socio-economic conditions; all the old beliefs now lie in the dust; even the analyses of capitalism carried out from around the middle of the nineteenth century by socialist thinkers need to be considerably modified if they are to have any relevance now. Everyone now has to obey the logic of capital, and follow the principle of efficiency: whoever is not efficient has no right to exist. This new doctrine now holds the reins in our country, even in our very own West Bengal.It is quite clear that there is something rotten about the grounds of our belief. Loud voices are raised from public platforms against the conspiracy of global capital, yet, when it comes to action, it is being said that there is no way but to give in to globalisation. Just because we of the Left have been in power in West Bengal, it does not follow that the all-pervasive influence of globalisation will fall flat on its face here, apparently we too have to make our productive activities more market oriented, otherwise we will not survive. Even if, for the sake of argument, we accept this statement for the moment, even if production has to make some compromises with the dictates of the market, why should the conditions and processes of production become dependent on the market, that is to say, on private capital? A clear debate on this issue is an urgent necessity, and most urgently so in Left circles.It is crystal clear from the results of the recent elections that there is no alternative to the Left Front in West Bengal, there is no credible opposition in the state. But the Left Front is no formless omnipotent divinity, there will be lapses and failures, setbacks and hesitations in its programme of activity. Development, the resources necessary for development, the objectives of development, and so on and so forth – a discussion of these issues falls within the ambit of communist commitment. And thus this essay.Everyone knows that development needs investment, and for investment we need capital. But just because we need capital, do we need capitalists in quite the same way? We are gradually losing the ability to separate capital from capitalists, but why?In our state the Left Front felt the need for capital from the first time it came to power. But the constituents of the Front came to a clear understanding among themselves. It was possible to explore avenues to progress through land reform in the agricultural sector, the introduction of the panchayati system of local governance, and the improvement of irrigation facilities. But a full solution of the state’s manifold problems was not possible through such measures, nor did such a solution come about.Many lakhs of urban unemployed still exist. It is not that that they are all utterly without any work, many have entered their names in the unemployment registers in the hope of better prospects. But to set them and their problems aside would be disastrous. We can see quite clearly how those who have completed school or college, or have graduated from technical institutes, have to run around madly in search of proper jobs; when they don’t get jobs they settle for petty, low-paying professions. On the other hand, thanks to globalisation, factory after factory is closing down, and those who once had jobs are now joining the ranks of the unemployed. At the same time, the growth of information technology has led to a constant reduction of the workforce in banks, the insurance sector, and suchlike. In such a situation, the state urgently needs more industries. In the sixties and seventies of the last century, many industrialists packed up and left from West Bengal, partly due to fear of the Left, partly due to the central government’s licence-permit raj and the shortsighted policies of the investment distribution in public enterprises or because of the price equalization policy.When the Left Front came to power towards the end of the 1970s, it was bound by certain promises made to the electorate which had brought it to power with a large mandate. It is not possible for this state to depend on private capital for a new phase of industrialisation. Why is this not possible? Capitalists are not only bound by their class affiliation, their investment decisions are largely dependent on the laws and ordinances passed by the central government. When private capitalists get involved in some new industrial enterprise, they as much as 90% of their capital for investment from various central government controlled financial institutions. If this is the case, why shouldn’t the Left Front government of West Bengal place its demands for investment capital directly to the central government, since this can be done without the mediation of private capitalists?At the time of its first coming to power, three demands were made by the Left Front government with a view to increasing investment in the state. (1) There should be a fundamental reworking of the centre-state relationship so that the major part of the country’s revenues are handed over to the states. (2) The central government should make provisions in its own budget for direct investment in West Bengal. The centre had made no significant investment in the state since the Durgapur Steel Project, some twenty years earlier. (3) Finally, the centre should direct the various financial institutions under its control, such as the National Insurance Corporation, the Unit Trust of India, ICICI, IDBI, IFCI, and so on, to pay renewed attention to increasing investment in West Bengal. Two facts need to be mentioned here. Following Independence, the central finance ministry had directed the financial institutions under its control that, since West Bengal was comparatively more developed than other states, there should be a temporary halt in investment in the state and more attention should be paid to other, less well-developed, states. Second, and equally important, if potential investors applied to the central government for licences at this time, they would be clearly informed that licences would not be issued if their intention was to invest in West Bengal, such licences would be readily available if they decided to invest elsewhere.It must be admitted that this three-pronged demand, made during the first phase of Left Front government in West Bengal, was not particularly effective. Following countrywide agitations, the centre was forced to set up a commission to examine centre-state relations, but the recommendations of the commission were not put into practice, nor were the states’ financial powers increased. (The situation now is much worse: the states’ financial crisis has not abated a bit, it has become more acute. Yet, West Bengal’s Left Front government, displaying great initiative, has handed over control of the primary source of revenue – that is sales tax – to the central government!) Second, it has not been possible to force the centre to make direct investment in various enterprises in the state. Nor has it been possible to make financial institutions under central control invest their excess funds in West Bengal.Private capital is guided by narrow class interest. The owners of such capital have no sympathy for the aims and aspirations, the dreams and desires of the people of West Bengal. It is my personal belief that chasing such capital is not only a waste of effort, it cannot be justified on ethical grounds either. On the other hand, the political context of our country has now changed completely. The same central government that paid no attention whatsoever to West Bengal’s Left Front government for 20-25 years, which looked upon it with hostility, is now, or so I am told, dependent on that same Left Front for its very survival. Left leaders themselves claim that the central government now stands or sits down as they command, why it even jumps when the Left asks it to! It is well-known that the financial institutions under central control are now sitting on piles of billions of rupees. They are even using these billions to gamble on the share markets. These financial institutions have never before seen such huge sums of money. Yet they remain strangely reticent when it comes to the question of direct investment. The reason being, they follow the dictates of the central finance ministry. The central finance ministry does not like investment in government enterprises, be they of the centre or of the states. Those who are in charge of this ministry are perfectly content to let private capitalists take on the responsibility for investment. They will provide funds to private capitalists, get intoxicated by the seductions of the share markets, but will pay no heed to the need for increased investment in government enterprises. The intimate relationship the central finance ministry has with the powers-that-be in Washington is an open secret.This is where the Left has a great opportunity for increasing investment in West Bengal. What prevents us from boldly telling the central government, which now stands or sits as we command, that it is now time for them to reverse their earlier discriminatory policies, that the government that once refused to bring about a change in centre-state relations, that declined to increase investment in West Bengal from the central budget, that prevented financial institutions from investing in West Bengal, all because of its Left leanings, should now make a u-turn where investment in West Bengal is concerned? Why should we not declare that West Bengal has no dearth of eminently skilled technologists, scientists, and women and men with entreprenual skills? The Left-inspired people of West Bengal are eager and willing to serve in enterprises under central guidance, they want to work under central leadership. Therefore, let the central government and the financial institutions under central control earmark at least ten thousand crores every year for investment in West Bengal.It is now possible for the Left to clearly declare that the yearly funds granted to West Bengal will be used for various government schemes, either on some central schemes, or on state schemes; or they may be used by and for some state and central government approved private-public joint ventures. Every government-created enterprise should function in a way that is designed to increase the industrial infrastructure of the state, according to guidelines laid out by the state. In these guidelines, employment generation will receive the highest priority, and in order to fulfill this, emphasis must obviously be given to the balanced existence of large, medium and small scale industries. Private capitalists will seek to garner glory by investing in enterprises here and there according to their own whims and fancies. But there is no analysis of whether such investments serve the interests of the state or the country as a whole. If we can act as I have outlined above, we can be freed from the clutches of such a situation.Why shouldn’t we be able to make such demands? Why have we forgotten the promises of the first stage of Left Front rule? Why are we informed, every day, of the many attempts at soliciting private capital, Indian or foreign, being made by the West Bengal government whenever we glance at the television or open a newspaper? It makes one cringe to read and hear these reports. We have such power in Parliament! We boast of possessing the power to topple the central government whenever we wish, yet why are we so diffident when it comes to exerting pressure on the centre to increase investment in our state? Ready funds for investment are lying around in the central financial institutions, yet we pay no heed to this, we keep busy in desperately seeking private capital.What saddens me most is that in seeking private capital we are displaying a particular kind of inferiority complex. Why are we sucking up to these capitalists? When private capitalists invest, they are not swayed by sweet invitations, they are guided by rigorous calculation. There are many reasons why they are now favourably inclined towards West Bengal. The massive investment made in the power sector in the first phase of Left Front rule means that, compared to other Indian states, the power situation in West Bengal is now abundant. Capitalists are thus, naturally, inclined towards this state. Besides, the environment and infrastructure in places like Hyderabad and Bangalore are gradually deteriorating. Even the spectre of a workers’ movement has raised its ugly head in such places! Such as has happened in Haryana’s Gurgaon region. And apart from this, the low cost at which skilled and efficient scientists and technologists are available in West Bengal is becoming increasingly difficult to find in other places.Those capitalists who want to come will do so for their own reasons, there’s no need to go out of our way to bring them here. If the time and enthusiasm being expended on them were to be spent in getting funds for investment in West Bengal through governmental channels, from the central financial institutions, then the interests of the state would be much better served.I want to say a couple of other things. At this very moment, our ministers are chasing after a capitalist who has set Bangalore afire. If he would kindly set up an IT factory in our state, we would be eternally grateful. He wants a hundred acres of land, and our government is instantly ready to provide him with the land. Yet this same capitalist brazenly declared, just a few days ago, “Ninety-seven and a half percent of my outfit’s net profits come from the US, Germany and Japan. It makes no difference to me whether the poor of India live or die.” That a Left government would seek to bestow favours on such an individual – this I cannot reconcile with my conscience.Make a few enquiries, and you’ll realise that those capitalists who have promised to invest in West Bengal (and who, in some instances, have also kept such promises) are really interested in the acquisition of land. Populations are increasing the world over, in every country. Land prices are shooting up ever higher and higher. Many capitalists have applied for land from different state governments only as an investment they can make a quick profit on. They claim that if they don’t get such-and-such quantity of land, it will be difficult for them to make investments! Those in power in our state ought to make some calculations before distributing land to these capitalists - just how much land is required for investment in different kinds of industry, here or abroad; what type of factory requires what quantity of land – otherwise they may live to regret their decision in the future. But the last word, which is also the first, is, how many jobs will be created from the kinds of investment that are being spoken of? If investing fifty thousand crores creates jobs for five hundred people, what noble service will be rendered to the nation by such investment?Of course, I hear another kind of argument nowadays. The capitalists want money, there’s no need to ask too many questions about why they want it, how does it matter if they want to build a golf course, or a pleasure city, or a hotel or a hospital? How does it matter if the increase in direct and indirect employment from these enterprises is only marginal; the profits these capitalists make will be used somewhere or the other to increase the capital of the country, leading to an improvement in the nation’s commerce and industry. What is good for the country is good for everyone, including the working classes.But is this really so? It is by no means certain that the profits reaped by foreign capital will be used for investment somewhere or the other in the country. And the profits reaped by Indian capitalists will be used by them to invest for their own benefit, not for the benefit of the nation or its working class. The capitalists’ doctrine is to exploit the working class to increase the margin of their own profits. They have never deviated from this doctrine, nor will they do so now. So why should we go out of our way to make things easier for these capitalists, such as by announcing in advance our opposition to the right to strike work in some industry or the other?Let me, with some diffidence, mention another example. We have announced, idealistically, that we will not allow our development efforts to be tainted by US government funds. Our promise has been made as a mark of our disgust at the hellish destruction unleashed by the US government all over the world since the end of the Second World War. Yet, why should we turn our faces away from the history of thousands upon thousands of communist leaders and workers killed with horrifying cruelty some forty/forty-one years ago, by the US government supported General Suharto of Indonesia? Why should we plead with those bosom buddies of Suharto the Salim Group, to invest their capital in West Bengal? Who does not know that a large part of the wealth accumulated by Suharto and his cronies from the brutal oppression of the Indonesian people forms a significant proportion of the assets of the Salim Group?It is our historical duty not to celebrate darkness but to vanquish it. I am often reminded of a poem by Jibanananda Das. Have we suddenly lost our way in the quest to defeat darkness, have we forgotten how to end the darkness and embraced it instead?

[Translated from the original Bangla by Samantak Das]