“Following the longer period of lockdown”, according to the latest Report of IMF, “India’s economy is projected to contract by 4.5 percent” in 2020, the lowest ever for India in seven decades. And according to ADB’s latest forecast, this contraction is slated to continue in 2020-21 too, though IMF does not share such a view as of now. Moreover, if this contraction persists, then by 2021, India’s GDP may shrink to $ 1.9 trillion from $2.11 trillion (as estimated in 2019). Though Modi regime is now reopening the economy amidst further intensification of COVID-19 pandemic, many experts including Gita Gopinath, chief economist of IMF identifies the “Great Lockdown” as the immediate cause for the worst downturn in India’s history. Many US-based economic experts who earlier worked as Modi regime’s economic policy advisers have also come out identifying, among other things, the ill-conceived COVID-19-related policies including the prolonged lockdown as one of the reasons for the contraction of the economy. 

Following this, even Indian official sources such as Ministry of Statistics and Program Implementation (MOSPI), Centre for Monitoring Indian Economy (CMIE) and RBI (many official Indian agencies linked with the government were engaging in preparing doctored statistics as suited to the regime and those experts who questioned it had to resign too) have now started parroting on the negative economic trends already identified by neoliberal centres. For instance, the second quarter (of 2020) estimates released by the RBI just two days ago portray a dismal economic picture in every sphere in this regard including a 4-6 percent GDP contraction in the fiscal year 2020-21.  However, independent research bodies such as the Centre for Economic Studies and Planning (CESP), from the perspective of output and employment, predicts an impending 15-22 percent of the economy. According to noted economist Arun Kumar of CESP, India’s GDP in the fiscal year 2020-21 is set to contract by at least 30 percent from Rs. 204 lakh crore to Rs. 130 lakh crore. Many such evaluations are forthcoming from diverse centres.

Of course, COVID-19 and the coercive lockdown with just four hours prior information that brought the economy to a standstill are only the immediate cause that accentuated the crisis. That is, it is not COVID that created the crisis, rather the former only strengthened the latter that was already set in. On the other hand, until the onset of the pandemic, as opposed to their recent revelations and sudden somersaults, all the neoliberal institutions and far-right ideologues associated with them were working overtime to bring about a rosy picture of India even when its economy had been steadily and irreversibly plunging throughout the Modi regime. And throughout, these neoliberal pundits were camouflaging the real state of the economy under this government as well as the horrific living conditions of the broad masses of this country when Modi has been resorting to all means to accomplish the required investor-friendly measures and for laying red carpet for the unfettered inflows of money-spinning and speculative imperialist capital to India. Most corrupt corporate Consultancies like PwC and their Indian pen-pushers while spreading the illusion of a $5 trillion economy by 2024 and $10 trillion size by 2030, were abstaining from unravelling the underlying trends behind India’s 140th rank (2019 estimate) in the world in terms of per capita GDP.

As already underlined by various domestic and global studies, when Modi came to power in 2014, India’s GDP growth rate was hovering around 7 percent that prompted them to characterise India as “the best performing country” in the world. To an extent, as pointed out by many analysts, it was also “relatively immune” from the world economic crisis of 2008-09. Thus the irreversible declining trend in GDP growth rate actually began in 2014.  To transform the State as a corporate-facilitator and to rapidly improve India’s indices pertaining to “ease of doing business” and “global competitiveness” (even after so much sell-outs,  India’s rank is still at the pitiable 63rd and 68th position in global ranking regarding these indices) as laid down by Bretton Woods twin and in accordance with the far-right economic philosophy of RSS, the first step that Modi regime did was the abolition of the more than six-and-a-half decade-old Planning Commission, the last remnant of state-led development, and its replacement by a corporate-saffron think-tank called NITI Aayog and entrusting the task of policymaking with it without even consulting the parliament. This was followed by the Demonetisation in 2016 and GST in 2017 which in essence aimed at further concentration of income and wealth with the corporate-financial elite leading to a superimposed destruction of all the informal and traditional sectors of the economy upon which, as of 2019, more than 95 percent of the 52 crore Indian labour force (as of 2019) subsists. Along with this, mimicking China, the flagship “Make in India” initiative was announced in September 2014 with the declared aim of transforming India into world’s manufacturing hub, thereby claiming to raise the proportion of manufacturing from 17 percent to 25 percent of GDP by 2022. However, what happened is the opposite and today this proportion has fallen further to around 13 percent and in the meanwhile in spite of becoming one of the largest destinations of foreign capital investment, India’s position has again deteriorated into a dustbin of money-spinning speculative capital (since capital that flowed in taking advantage of liberal tax, labour and environmental regulations is least interested in employment-oriented productive activities) as well as a dumping ground for goods and services from imperialist sources ranging from US to China.

It is not intended here to go into the details of this economic collapse. Though Modi came to power in 2014 claiming to generate an additional 2 crore jobs every year, as of now, according to independent estimates, the country has lost around 14 crore jobs during the six year period 2014-20. And India today experiences the worst unemployment in recorded history. Almost 50 percent of the people are still clinging on to agriculture for their sustenance though the contribution of agriculture to GDP is only around 15 percent as of now. But Modi’s input-output pricing policies pertaining to agriculture and its forcible integration with world market and corporatisation policies are displacing large sections from agriculture altogether. Despite the economic slump, India being one of the highest number of superrich billionaires, income and wealth inequality (close to 60 percent of the country’s total wealth is in the hands of upper 10 percent of the population, and three-fourth of the additional wealth generated is gobbled up by the top one percent) are of unprecedented proportions. Still only 1.5 crore Indians are effective direct tax payers (including corporate and personal income taxes) and in spite of extreme concentration of wealth and inequality, Indian corporate tax rate at 15 percent is the lowest in the world. The direct tax-GDP ratio in India is stagnating at around 5.5 percent which also is world’s lowest. If the upper 10 percent of the wealthy sections are brought under the tax net, together with 30 percent corporate tax (during the 1970s, the highest rate was up to 90 percent), the direct tax-GDP ratio could have easily been raised to 20 percent.

To compensate for this biggest loss in tax revenue (GST collection is already on the downturn due to lack of purchasing power of the masses and declining consumption expenditure), Modi has been resorting to the biggest-ever loot of the broad masses by sky-rocketing prices of petroleum products (mainly through raising taxes and cesses on petrol, diesel, cooking gas, etc.), and by this alone during 2014-20 the regime has amassed an additional amount worth Rs. 17.5 lakh crore relative to the UPA regime. Ironically, the average world crude oil price (India imports around 80 percent of its crude oil requirements) during the entire Modi regime has been around one-third of what it was during the previous UPA rule, and following declining global demand in the context of COVID-19, global price is now hovering around  one-fourth of what it had been a decade ago.  Meanwhile, declining government revenue from direct and indirect taxes coupled with corruption and plunder of the exchequer in manifold ways are resulting in an unprecedented growth in India’s debt-GDP ratio to around 85 percent during the Modi period. To cap it all, an unprecedented loot of public wealth through disinvestment of PSUs and plunder of public sector banks through the creation of NPAs by corporates are flourishing without any let up.

In 2015, the World Bank based on its renewed yardsticks of poverty measurement including the new methodology of purchasing power parity redrew its world poverty line. Still India with 17.5 percent of world population had more than 20 percent of world’s poorest people. Out of this, more than 6 crore belongs to chronically malnourished children under the age of 5. According to UNICEF estimate, 8.8 lakh Indian children have been dying every year due to lack of food. As per the latest Edition of the State of Food Security and Nutrition in the World (SOFI) India has the distinction of the largest share of food insecure people. As estimated by UN Organisations, under Modi.1, the prevalence of food insecurity in India increased by 3.8 percentage points. As a result, by the year 2019, the number of food insecure people increased in India by an additional 6.2 crore than 2014. Though FAO in its Prevalence of Moderate and Severe Food Insecurity (PMSFI) estimate places India in a very critical situation, Modi government is not allowing publication of such reports in India for obvious reasons.

Usually, while the World Bank reports often whitewashes the Indian situation, the FAO Report seems to be more objective in approaching India’s stark realities. Thus, according to FAO’s PMSFI, while 27.8 percent of India’s population suffered from moderate or severe food insecurity in 2014, the proportion rose to 31.6 percent in 2019. Thus, number of food insecure people in India rose from 42.65 crore in 2014 to 48.86 crore in 2019. Accordingly, India accounted for 22 percent of the global burden of food insecurity, the highest for any country in 2019. Since Modi government has not released the usual NSSO Consumption Expenditure Survey data even for 2017-18 which was due, FAO had to use supply-wise data on per capita food availability to measure changes in average per capita calorie intake, which is an underestimate.  Prolonged lock down and lack of buying capacity of people has increased the core issue of hunger and food security, and many starvation deaths are frequently covered up under COVID-19. While there is no let-up in India’s multidimensional poverty, the 2019 Global Hunger Index (that measures the severity of hunger) has ranked India at 102nd out of 117 countries.  

  On the other hand, amidst the fudging of economic data, deployment of the entire administrative machinery for achieving its Hindutva majoritarian objectives and using the pandemic itself as an opportunity for corporate bootlicking and selling out the country’s wealth to the most corrupt foreign and Indian corporates, concerted efforts are also going on to cover up the stark realities people’s life.  For instance, India being ranked second in food and agricultural production, the total food grains stock (rice plus wheat) with FCI has now topped 100 million tons as of June 1, 2020. On account of grave storage challenges, millions of tons of this grain stock are prone to decay, and the government could have effectively and quickly liquidate the heavy burden of storage by immediately distributing this among the needy, vulnerable and destitute sections through a free-grain scheme.  But true to its fascist character, except certain window-dressing (as part of the much trumpeted Aatmanirbhar, 5 kg wheat/rice for 3 months among the poor 80 crore was announced), no concrete intervention is there to distribute the food grains among the tens of millions of poor including the migrant workers who were forced to bear the brunt of Modi’s coercive lockdown since March 25th 2020. Concerned people have already demanded an extended food distribution system along with an universalisation of the MGNREGA program expanding to urban and semi-urban areas where the informal/unorganised workforce is concentrated including a revision of pay from the existing Rs.202 to Rs.450 a day. They have also demanded a wage-led approach that will boost output, employment and demand instead of the current “supply-side” interventions (i.e., the pro-corporate stimulus packages) now pursued by the Modi regime.

However, the fascistic Modi regime is consistent in blatantly opposing such genuine pro-people demands. On the other, as again proved by the announcement of Rs. 21 lakh crore package (in real terms what is addressed to the vast majority of toiling and oppressed people in it is only around Rs.2 lakh core or just one percent of the country’s GDP) under what is called “Aatmanirbhar Bharat Abhiyan” the regime is still pursuing the beaten track of stimulating the corporates as the only alternative before it. While setting apart a paltry sum for the people whose entire livelihood has been destroyed, Aatmanirbhar turned out to be a cover for an unprecedented sell-out to those whom Modi regime characterises as “wealth creators”, a post-truth synonym for corporate looters who plunder and appropriate the country’s wealth. Thus Aatmanirbhar Bharat has turned out to be a more vulgar imitation of the earlier “Make in India”, under the cover of which the remaining key and strategic sectors including  mining, transport, defence, banks and insurance  space exploration, power distribution, health research, and entire frontier technologies are thrown open to foreign and Indian corporates.

As already discussed, this intensified shift to the far-right by the corporate-saffron regime laying red carpet for aggressive corporate plunder using COVID-19 as an opportunity is driving the country deep into the vicious circle of corporatisation-induced economic breakdown. Unless this trend is reversed through an appropriate political intervention, fascist forces will deploy all avenues at its disposal to put still heavier burdens on the backs of common people. A broad-based, nationwide people’s movement capable of mobilising the workers and all oppressed including dalits, adivasis, minorities and women based on a common minimum program against corporate saffron fascism is the need of the hour. 

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

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.

Com James PJ

The Communist movement in India has a history of almost a century after the salvos of October Revolution in Russia brought Marxism-Leninism to the people of India who were engaged in the national liberation struggle against the British colonialists. It is a complex and chequered history.