When Modi.2 was ascending to power, we wrote in the beginning of June, 2019: “Then the outcome is an extra-ordinary galloping of financial speculation led by the most corrupt corporate class under whom the so called development itself is transformed in to a by-product of money-spinning businesses throughout. Modi’s second coming implies a further opening up of the floodgates of ultra-rightist, neoliberal corporatisation subjecting the working classes and all oppressed to the domination of the most degenerated financial class in every sphere. Its outcome shall be unprecedented wealth concentration in the hands of the most corrupt tiny financial elite and intensified pauperisation and loss of purchasing power for the vast majority.” (“India’s Impending Crisis”, Red Star, June 2019). Now within three months of Modi.2, India is in that horrific situation. Today, even the saffron-corporate media which till now have been indulging in propaganda blitzkrieg on Indian economy’s concocted fastest growth under Modi are now forced to recognise it as in deep recession. As such, contrary to the hollow claims of 8 percent GDP growth claimed by official agencies at the time of Modi.2’s maiden budget in the beginning of July, the growth rate has now plummeted to just half of what they claimed a few months back.
As is widely conceived now, India is confronting the biggest economic plunge since 1947, even as the saffron leaders continue to boast of making the country a $ 5 trillion economy in 2024. Agriculture and industry are shrinking and unemployment is the biggest in five decades. Exports show the biggest decline in seven decades while external value of the rupee at Rs.72=$1 is the lowest-ever. Consumer market including the much trumpeted fast moving consumer goods (FMCG) sector is in doldrums. Transactions pertaining to real estate, housing, automobiles, and textiles are at their lowest level. But the most critical aspect of the economic downturn as reflected in the inability of the common people even to purchase a five-rupee biscuit packet is just casually mentioned in the mainstream discussion. Under the UPA regime, Arjun Sengupta, the Planning Commission expert had estimated that 83 percent of the Indian people earn only Rs. 20 or less a day. However in view of the prevailing historic slump of Indian economy, the percentage of pauperised population devoid of even Rs.20 per day will definitely have gone up. In fact, the plight of the most deprived including the peasants, the tillers of the soil, and the unorganised or informal working class who constitute the largest chunk of the toiling masses in India are the least discussed in corporate media.
However, the entire mainstream analysis of the economic collapse is from a neoliberal”supply-side” orientation implying that it views the disease affecting the economy from the perspective of corporate investors and the plausible threat to their wealth accumulation. On the other hand, Modi’s far-right analysts are reluctant to approach the downturn starting from an evaluation of the abysmal fall in consumption or consumer demand, which depicts more than 50 percent decline in the first quarter of the financial year 20019-20 compared to that in 2018-19 according to World Bank statistics. Obviously this is due to the unprecedented downfall of people’s real earnings and purchasing powerarising from unparalleled job loss everywhere. Therefore, common sense demands an urgent intervention on the part of govt. to overcome the deep recession in India through picking up mass consumption demand byboosting employment-oriented productive spheres such as agriculture, industry, manufacturing, etc.
On the other hand, the sole purpose of Modi regime’s maiden budget presented on July 5, and the four successive ‘booster’ or ‘stimulus’ packages (or so called mini-budgets, quite unprecedented in the economic history of nations) announced since August 23, has been to channel more and more national wealth and people’s money directly in to the coffers of the most corrupt corporate plunderers who themselves are responsible for the present crisis. Meanwhile, along with the Modi govt. that identifies itself as a ‘facilitator’ of corporatisation, both corporate media and neoliberal ideologues also are cunningly engaged in camouflaging the fact that the present stagnation is corporatisation-induced. It is well-recognised under neoliberalism that the so called investors who have got unfettered freedom and access to all corrupt means in the economy are interested only in speculative and money-spinning activities along with direct appropriation national wealth including natural resources that yield fabulous profits within the shortest time, and that both employment and share of wages in national income are slowing down at an alarming rate.
The soaring corporate profits and wealth accumulation are systematically backed by what are euphemistically characterised ‘ease of doing business’, ‘investor-friendly measures’ etc. encompassing biggest-ever corporate tax exemptions and direct wealth transfers to the super-rich. In India, for instance, this reactionary process under Modi.1 and Modi.2, have led to a situation where more than three-fourths of the national wealth generated is now appropriated by one percent of the top billionaires. This corporatisation process is also facilitated by continued by a series of fiscal measures pertaining to expenditure-reduction and austerity steps, casualization or informalisation of the workforce and deliberate reduction in real wages and an outright plunder of nature. While these steps result in biggest concentration of wealth in a few billionaires and multi-dimensional poverty for the broad masses they have transformed India as one of the most corrupt countries in the world today. While these trends constitute the essence of the crisis today, the corporate-saffron fascist regime, the co-opted media, and neoliberal intellectuals revealingly keep silence on the concrete Indian situation as experienced by common people.
As is obvious, the successive mini-budgets or booster packages that follow the July 5 General Budget aimed at directchannelling of public money appropriated from the peoplein to the coffers of the corrupt-parasitic billionaires and super-rich classes, cannot in any way resolve the unprecedented economic slowdown. In accordance with the prevailing neoliberal logic, itunleashes the ‘animal spirits’ (a phrase frequently in use among neoliberal spokespersons today) of the anti-people and reactionary financial class further enabling them to appropriate ever-greater share of country’s shrinking output as manifested in the skyrocketing stock and financial indices thereby leading to hitherto unknown levels of poverty and destitution of the vast majority of working and oppressed people. In other words, the outcomeof all the fiscal and monetary measures implemented in under the guise of alleviating the crisis is an aggressive transfer of national resources to corporate looters imposing heavier burden on the backs of toiling people.
Therefore, every intervention on the part of Modi regime to resolve the crisis is nothing but an intensification of the corporatisation-induced recession with wider and deeper manifestations. In other words, the economic collapse is used as guise for strengthening the neoliberal regime in more vicious forms. No doubt, neoliberal credit rating agencies like Moody’s and neo-colonial institutions led by Fund-Bank combine are also instigating the Modi regime to resort to a further deepening of the far-right economic policies in this regard.
For instance, the latest ‘booster dosage’, the fourth in the series,comprising fabulous corporate tax-exemptions announced on the eve of Modi’s Houston program where he accomplished one of the biggest sell-outs of India to US imperialism, led to a sudden ballooning of the stock market that skyrocketed stock indices by more than 2000 points adding the largest single-day speculative gain worth more than Rs. 6 lakh crore on September 21, 2019. Revealingly, this has nothing to do with increasing productive capacity, employment generation and purchasing power of the common people. Rather, these measures trumpeted as pro-investor measures act as a drag on the job-oriented productive economy.
As such, the crux of the problem today is to politically understand that with every step towards boosting corporate accumulation, not only the economy is collapsing, but the scope of manoeuvrability within neoliberalism is increasingly exhausting. Thus it is clear that any attempt at resolving the crisis is to be sought outside the logic of corporatisation, or rather a reversal of Modigovt’s blind adherence to neoliberalism solely oriented to the ultra-wealthy sections. That implies no short-cut but calls for a political resolution with a program of reversing the far-right policies leading to the oppression of corporate-financial class over the people. So long as that political alternative is delayed, every worsening of the crisis that is inevitable will result in the ruling regime continuing to put far more heavy burdens on the backs of the people in manifold ways on the one hand, and utilising the economic collapse itself as the foundation for corporate-saffron fascism on the other. Along with its divisive, majoritarian Hindutva offensive, fascism in India too, as elsewhere, is the super-imposition of the tyranny of the most reactionary, utterly parasitic super-rich corporate classon the broad masses of toiling people. It is definitely a ‘do or die’ situation before Indian working class and oppressed people and there is no other option except to resist and defeatthis terrorist dictatorship of saffron-corporate capital.
“Fourth Booster” is also Incapable to Revive the Economy : Scope of Manoeuvrability is Fast Depleting
Since the 3 booster packages announced by Modi regime since August 23 aimed at unleashing the “animal spirits” of the corporate looters have done nothing to revive the sinking economy, today, Nirmala Sitharaman, the finance minister has come out with a fourth booster shot to shore up investor sentiments leading to a sky-rocketing of the Sensex by 1650 points increasing the wealth of corporate speculators by around Rs.2. 5Lakh crore, the highest single-day gain in Indian stock market, while these lines are written. Included in this booster shot are a further reduction of the corporate tax rate from 25 percent to 22 percent for existing companies and to 15 percent for new companies, reduction of minimum alternate tax from 18.5 percent to 15 percent, exemption of listed companies from buyback tax, surcharge exemption for speculative (capital) gains made by foreign speculators (FII), etc., that will result in annual revenue loss of Rs.1.45 lakh crore to govt. in addition to the Rs.8.99 lakh crore corporate-tax exemptions announced in the July 5 Budget and a series of direct wealth transfer measures announced in the stimulus packages announced since August 23.
However, according to the logic of corporate wealth accumulation prevailing today, this 4th booster package that is announced as part of mounting crony capitalism—the unholy nexus between the most corrupt corporate capital and the neoliberal state— is not in any way going to reverse the economic downturn. Today India is in a vicious corporatisation-stagnation trap resulting in a total breakdown of the economy. The exponential growth of the parasitic-corrupt corporate class at the expense of employment-oriented genuinely productive activities threatening the very sustenance of the vast majority of toiling people has been the essence of the crisis today. Therefore, boosting up the very same anti-people corporate-financial class through repeated fiscal and liquidity manipulations will not contribute anything in the direction of alleviating the systemic crisis; rather it is oriented towards an aggravation of the economic collapse further. It is also a clear symptom that the space for manoeuvre is fast depleting under neoliberalism.
Further, the injection of lakhs of crores of people’s money in to the coffers of the corporate plunderers who themselves are responsible for the present historic crisis, without doing anything in the direction of reviving the real incomes and purchasing power of the vast majority of people who are subjected to hitherto unknown levels of deprivation and destitution is an outright fascist act too. It is the super-imposition of the tyranny of the most reactionary, utterly parasitic super-rich corporate class integrated with saffron forces on the working class and the oppressed. It is high time.
Where Modi-2 Government is Leading the Economy to ?
After officially acknowledging India’s historic economic downturn in 70 years, on August 23, 2019, finance minister Nirmala Sitharaman has announced a series of initiatives including further abolition of corporate taxes and many wealth transfer schemes to the superrich completely ignoring the unprecedented deprivation and destitution borne by the vast majority of common people. Till now, the govt. spokespersons have been working overtime to depict a rosy picture of the economy even manipulating data with official agencies. However, this ‘window dressing’ got exposed itself when global credit rating agencies like Moody’s Investors Service and even the Bretton Woods twin (IMF-World Bank) themselves have come forward strongly confirming a well-defined recession in India. It is in this context that, following Niti Aayog vice-chairman Rajiv Kumar’s comment on the threatening financial system and particularly in the midst of Modi’s world tour, finance minister Nirmala Sitharaman has reiterated her govt’s unwavering commitments to corporate capital as announced in the maiden budget along with several fresh corporate-investor friendly measures.
The package of announcements include a series of tax exemptions and tax rolling backs including withdrawal of capital gains tax and surcharges on corporate speculators— both foreign (FPIs) and domestic— in stock markets, infusion of an additional Rs. 70000 crore into banks enabling them to lend another Rs. 5 lakh crore to corporate sector, dilution of violations of Corporate Social responsibility as a mere civil offence, pursuance of a soft approach to tax evaders, empowering bank officials to pursue a soft approach to corporate defaulters and so on, all in essence aim at further encouragement to ‘ease of doing business’ and boosting corporate animal spirits.
While such a mega booster is imparted to the corporate billionaires and foreign speculative investors for sky-rocketing the stock indices, there is not even a mention on the ground reality of the economy or on the extent of deprivation to which vast majority of the toiling people are subjected. In fact, the whole economy has been shrinking on account of withdrawal of productive investment by both public and private sectors, and as a manifestation, post-GST tax collection itself has gone down by 10 percent. Indian rupee’s biggest ever depreciation is also integral part of the all round economic collapse. And even in the productive sphere that is sustaining, on account of the informalisation and casualization of workforce unleashed by corporate capital in its mad pursuit of super exploitation, the real earnings and purchasing power of the workers are shrinking at an alarming rate, even as unemployment rate is the highest in five decades. At the same time, under the Modi regime, with more than 80 percent of the national wealth generated being gobbled up by just one percent of the most corrupt corporate class, India has become one of the most unequal countries in the world.
Meanwhile, under such pro-corporate measures as Demonetisation and GST that while sucking out the life blood of the vast majority depending on cash-based informal and unorganised sectors on the one hand, and fattened the superrich on the other, corruption has grown to such an extent making India the most corrupt country in Asia surpassing Thailand and Pakistan. While there is no dearth of anti-corruption rhetoric from rooftops, the ultra-right neoliberal policies of the corporate saffron regime has done nothing to unearth the accumulation of vast sums of black money by the ultra-wealthy sections in offshore and domestic tax havens. And a major factor behind the unprecedented liquidity crunch that the economy confronts today is the diversion of funds mobilised from various sources to intricate, tax-evading underhand deals.
Along with this, intensified downsizing and rollback of the state sectors coupled with collapse of industry and agriculture and drastic reduction in social spending have led to absolute reduction in the consuming/purchasing power of the people leading to lack of ‘effective demand’. Ironically, even while the economy in general is experiencing a downturn and common people are subject to more deprivation, corporate billionaires are successful in shoring up their super-profits. For obvious reasons, it is well-nigh impossible for Sitharaman even to mention these underlying factors that led to the present economic tsunami in India with its unfolding repercussions in the days ahead.
The slew of neoliberal-instigated tax-liberalisation and wealth transfer measures intended to further replenish the corporate looters now pursued by the Modi regime that resemble a ‘mini-budget’ are quite reminiscent of the “quantitative easing” and “rescue packages” pursued by the imperialist powers ranging from the US and EU to China following the 2008 global economic meltdown. According to estimates, for instance, immediately after the financial crash, around 25 percent of the GDP of US was channelled in to the coffers of corporate-financiers who themselves were responsible for the crisis. But the crisis is still continuing. The outcome of the booster dose now imparted by Modi.2 is also going to be the same.
As the global economic downturn following the 2008 financial breakdown is a continuing process, India’s sudden economic collapse under Modi regime, though connected with many external factors, is different in many respects. For, as highlighted by several international and Indian experts, the Indian economy had been ‘relatively immune’ from the global meltdown of 2008 and as can be guessed from several studies such as the recent one by the Economic Research Department of SBI, the Indian economic scenario was relatively better on the eve of Modi’s ascendance to power in 2014.
However, as reported in the media, now apart from manipulation of data, a despicable move also is there to erase such statistics which are unpleasant to the regime from govt websites altogether, even as under Modi.2 alone Indian stock markets have experienced a whopping loss worth of more than Rs. 15 lakh crore within a span of just three months. This bursting of the bubble itself is a symptom of an extreme crisis where even the corporate cronies integrated with the saffron-fascist regime are losing faith in the economy. That is, the extent of the historic collapse of the Indian economy is incomparable with the contemporary situation elsewhere including that in the leading imperialist powers US and China which are engaged in an unprecedented protectionist tariff/trade war.
Therefore, the ongoing economic collapse is inseparably linked up with the far right shift in economic policies under Modi regime. The root cause of the crisis today is the pan-Indian extension of the Gujarat model of aggressive corporatisation that took away even namesake barriers to corporate plunder. Indian economy today is engulfed in a vicious cycle of corporatisation-stagnation trap. No amount of ‘window dressing’ as that now resorted by the regime can drag the economy out of this crisis which is bound to assume further dimensions. What requires is a fundamental and immediate reversal of the explosive growth of the most corrupt and parasitic corporate class sucking out wealth from the real economy through manifold ways while remaining at the sphere of speculation.
And as the crisis intensifies, along with putting heavier and heavier burdens on the shoulders of the people, all avenues at the disposal of corporate-saffron fascism are deployed not only against workers and all oppressed including dalits, adivasis, women and minorities, but also on political opponents and dissenters. Obviously, there is no shortcut, and the only option is a political alternative capable of resisting and defeating this horrific situation. n