India is on the verge of an economic collapse thanks to its highly regimented, controlled and centralized politico-economic system which displays super-power airs about itself, and the Goblin propaganda about its being the largest democracy in the world. The country is saddled with an external debt estimated to be over R.s 85,000 crore. It faces an imminent danger of not being able to meet the debt servicing obligations. The foreign exchange reserves of the country are at low ebb, hardly sufficient for a few weeks. The country’s credit worthiness has reached the nadir in the eyes of the creditors. It had to pledge 45 tons of gold with foreign banks in the recent past to overcome immediate problems of the foreign currency crunch. Desperate efforts are on to obtain a sizeable loan from the International Monetary Fund to meet the medium-term problems.
In a swift move, the Congress (I) devalued the rupee by about 21%.
The aim appears to be to meet the I.M.F. conditions in the shortrun and to bolster up exports long term. Concessions have been given to the companies with foreign capital holdings. There is talk of permitting greater freedom to large monopoly houses. In short, a new economic system is being promised so that private enterprise is allowed greater initiative and the economy is freed from suffocating controls. To what extent the government goes in its new initiative will be known as Finance Minister Manmohan Singh presents his budget proposals on July 24. Manmohan Singh is an economist. He is more a machine man than a politician, His election to head the finance department coupled with the quality of political system India has, indicates that the country’s political bosses view economics in isolation from politics. They do not appear to see any link between the political system and the economic crisis. There is talk of continuing with the manifesto and policies lay down by Nehru, Indira Gandhi and Rajiv. Efforts are still on to entrust power to Rajiv’s widow to lend greater meaning to the idea of continuity. The Congress (I), being in a minority in Parliament, has to look to the leftists for support. These die-hard Stalinists are dead set against every trace of liberalism and freedom as much in Russia as in India. As such liberalization in India has its own limitations.
The world has to realize certain grim facts responsible for the present crisis in India, The principal factor is vast expenditure on the Army, the internal security forces, the intelligence agencies and the attendant publicists out to convince the world that India is a democracy, it is a super power, it has to play a preponderant role at least in south-east Asia, if not in the world. In addition, the poor masses have to contend with a burgeoning bureaucracy drawn mainly from the privileged castes and classes living in a few States and metropolitan centers, The rest of the public the low castes, the minorities, the peasantry and the minority regions like Punjab, Kashmir, Assam etc. are more subjects of an imperial Delhi. The misfortune of this imperial center is the fact that India, as much as the rest of the world, is living in the second half of the 20th century, an era of national liberation, of education, of knowledge and information and of dreams.
Sikhs, as the most advanced segment of India’s less privileged masses, were the first to rise. Their initial demand was some sort of autonomy within the united India. Delhi’s imperial power foresaw a bigger catastrophe all over. It planned and executed operation “Bluestar” to suppress the Sikhs with an iron hand so that others in India did not raise similar demands. India’s ruling class had tested blood of a million Nagas, a few thousand Kashmiris and of countless “Naxalites”. It had different ideas on the eve of “Bluestar”. But the Sikhs were made of a different metal. The youths ran to the ravines, collected arms and have been fighting since. Its interests clash head on with the freedom-loving Sikhs. The latter are now joined in by Kashmiris, the Assamese, the Tamils and others as well.
This mighty stream of different sets of nationalism is face to face with the growing militarized India with jails and hospitals full. India, in short, is on the “Red Alert”. There is an armed security man at almost every step. Since the poor country cannot afford the luxury of maintaining standing army and security setup at such a gigantic scale, it has to face the massive financial crisis. Unless, India is demilitarized in a nuclear-free south-east Asia, its vast bureaucracy is pruned and its limited resources are put to productive uses along with finding political, democratic solutions to the problems of growing nationalism, the country can never hope to resolve its financial and economic crisis.
India’s creditors must have a deeper insight into India malaise, They will do well in their own interests not to sink billions of dollars in a country foredoomed by its own polity. It is a mistake to believe that India’s economy could be revived and made to repay its liabilities unless a politico-economic package of revolutionary nature is introduced to which the ruling class as well as its institutions are fully unequal.
Article extracted from this publication >> July 12, 1991
