Independence & After

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3.1 The broad masses of the Indian people had enthusiastically participated in the freedom struggle and made it a success. They were fired by patriotism and they looked forward to a free India and a new life for the people. They expected an end to the miserable conditions of poverty and exploitation. Independence for them meant land, food, fair wages, housing, education, health care and employment. Freedom meant emancipation from social evils like casteism and communal hatred and the fulfillment of the cultural needs of the people in a democratic setting.

3.2 The national movement for independence succeeded because of the mass participation of the working class, the peasantry, the middle classes, the intelligentsia, women, students and youth. But the leadership remained in the hands of the bourgeoisie. The big bourgeoisie which headed the new State, refused to complete the basic tasks of the democratic revolution. The path to the regeneration of Indian society lay in breaking the shackles on the productive forces. Parasitic landlordism had to be abolished and land distributed to the agricultural workers and poor peasants. The development of industry freed from the stifling domination of foreign capital, would have laid the base for an advanced industrial nation with a self-reliant economy. Afraid of the possible outcome that might follow a thorough going implementation of the tasks of the democratic revolution, the big bourgeoisie forged an alliance with the landlords and compromised with imperialism. The Congress rulers’ policies reflected this bourgeois-landlord alliance. The nature of the capitalist path in the following decades was determined by this character of the ruling classes.

3.3 India is endowed with enormous natural resources necessary for the all-round development of the country, with abundance of cultivable land, irrigation potential, favourable conditions in various regions for a vast variety of crops, immense mineral wealth, as also vast potential for power generation. India’s huge manpower strength and the scientific, technical, managerial and intellectual skills of the Indian people constitute a reservoir of great potentialities. Instead of developing these potentialities, the big bourgeoisie which acquired State power embarked upon a type of capitalist development suited to serve its own narrow interests.

3.4 After independence the dual character of the bourgeoisie manifested itself through conflicts and collusion with imperialism. The big bourgeoisie which acquired the leadership of the State adopted a particular type of capitalist development. It compromised with imperialism and maintained its alliance with landlordism. It utilised its hold over the State to strengthen its position by attacking the people on the one hand and seeking to resolve the conflicts and contradictions with imperialism and landlordism by pressure, bargain and compromise on the other. In this process, it has forged strong links with foreign monopolists and is sharing power with the landlords. With liberalisation, the big bourgeoisie is the strongest advocate of opening up the economy to foreign capital and forging strong links with international finance capital; it is the prime mover behind the demand to privatise the public sector and the economy as a whole.

3.5 In the early years after independence, failing to get a fair deal from the Western countries, the Indian bourgeoisie turned to the Soviet Union for assistance. They adopted a path of building capitalism which was State sponsored capitalism. They began using the existence of the two blocs — imperialist and socialist — as a useful bargaining counter to strengthen their position. Economic planning was resorted to as a part of the capitalist path. The budgetary and general economic policies were determined primarily from the point of view of favouring a narrow stratum of the exploiting classes. The public sector was developed in heavy industries and infrastructure as the private sector was not in a position to provide the required resources for such huge projects. The building of these public undertakings helped therefore to a certain extent to industrialise the economy and to overcome the abject dependence on the imperialist monopolies.

3.6 Economic planning in an under-developed country like India backed by the State power in the hands of the bourgeoisie, certainly gave capitalist economic development a definite tempo and direction by facilitating more expedient utilisation of the resources available under the limitations of the policies of the government. The most outstanding feature of these plans is to be seen in the industrial expansion, particularly in the setting up of certain heavy and machine-building industries in the State/public sector. These gains were possible because of the steady support from the socialist countries, mainly the Soviet Union. The State sector was expanded by the nationalisation of the financial sector like banks and insurance and the oil and coal industries.

3.7 Certain other policy measures, though in a half-hearted manner, were also adopted for industrialisation. There was emphasis on research and development, adoption of a new Patents Act, regulation on entry of foreign products and capital in our market and protection to small-scale industries. In the conditions prevailing in India, all these measures helped to overcome, to a certain extent, economic backwardness and the abject dependence on the imperialist powers, and in laying the technical base for industrialisation.

3.8 Alongside the development of the public sector and State intervention through limited planning, the policies pursued by successive governments saw the increasing concentration of wealth and the rapid growth of monopolies. Under the leadership of the big bourgeoisie, the State sector itself became an instrument for building capitalism. The bulk of the credit from the public financial institutions was cornered by the big bourgeoisie. The budgetary and taxation policies of successive governments were designed to transfer resources from the people to a narrow stratum of the bourgeois-landlord classes. The large-scale evasion of taxes spawned huge amounts of black money and was a method to promote the private accumulation of capital. The common people, workers, peasants and the middle class were put to ruthless exploitation in the name of financing the plans for capitalist development. In the absence of basic land reforms the domestic market remain limited and domestic industry could not grow and expand without reliance on foreign capital. The huge external and internal borrowings financed this form of State capitalism. The growth of monopolies and increasing penetration of foreign finance capital became a marked feature of this path.

3.9 The specific path of capitalist development adopted by the ruling classes from the fifties was bound to be crisis-ridden and reached a stalemate. The big bourgeoisie’s compromise with landlordism led to the domestic market not being expanded as the purchasing power of the peasantry could not grow sufficiently. Increasing reliance on borrowings, both external and internal, to finance industrialisation and the expenditure of the State led to a serious crisis both in the external balance of payments and the fiscal deficits. The financial crisis finally led to the Congress government accepting the IMF-World Bank conditionalities. The Indian big bourgeoisie sought to meet this crisis by increasing collaboration with foreign finance capital and opening up the economy.

3.10 The big bourgeoisie, which earlier favoured State intervention to build infrastructure for capitalist development due to its weak capital base, accumulated sufficient capital over the decades and fattened itself on State assisted development and subsidies. By mid-eighties the big bourgeoisie was prepared to enter the core sector reserved for the State, take over the public sector and expand to new areas in collaboration with foreign capital. This accompanied by the crisis in the State sponsored capitalist path formed the internal base for liberalisation. Externally, the collapse of the Soviet Union hastened the process of shift in policies and the acceptance of the IMF and World Bank dictates.

3.11 The pressure to open up and liberalise the economy brought about a shift in the economic policies from the mid- eighties during the Rajiv Gandhi regime. Import liberalisation and growing short-term borrowings led to huge fiscal deficits. This along with the changed international scene led to a situation where the Congress government in 1991 accepted the IMF-World Bank conditionalities for getting a structural adjustment loan. The policies of liberalisation were pushed further forward by the BJP when it came to power. The liberalisation and structural adjustment policies pursued by successive governments since 1991 have led to the opening up of the economy to foreign capital, the process of dismantling the public sector and liberalisation of imports. The areas of operation so long reserved for the State/public sector have been opened up to foreign and Indian monopoly capital. With a view to liquidating the public sector, the shares of public sector units are disinvested and sold out cheaply to private monopolies. Through reduction of import duties, indigenous products are displaced by foreign goods resulting in large-scale closures and throwing out tens of thousands of workers from their jobs. International finance capital has exerted relentless pressure for opening up the financial sector. The privatisation process in the banking industry and the opening up of the insurance sector have been given priority. The signing of the GATT agreement in 1994 led to India having to accept the WTO regime. Changes in the Patents Act and the opening up of the services sector, serve the interests of imperialist capital. All these developments have led to the erosion of economic sovereignty.

3.12 The path of liberalisation and privatisation has enormously benefited the big bourgeoisie. Its ranks have been expanded by the entry of new business houses. The assets of the top 22 monopoly houses shot up from Rs. 312.63 crores in 1957 to Rs. 1,58,004.72 crores in 1997 which is a five hundred-fold increase. Under liberalisation, major concessions have been given to the big business houses and the affluent sections by the reduction in the rates of income tax and the abolition of other taxes such as wealth tax. Such policies have enormously enriched the affluent classes and expanded the market for luxury goods for their consumption. To meet this demand, goods are produced domestically in collaboration with foreign capital, or, are imported. The indiscriminate entry of foreign capital is affecting vital sectors of domestic industry. Multinational companies are buying up Indian companies. Even though some sections of the non-big bourgeoisie appear willing to collaborate with foreign capital, large sections of the medium and small capitalists are badly hit by liberalisation.

3.13 The period of liberalisation has seen an increase of both external and internal debt. A major share of revenue expenditure is spent for making interest payments alone. Public investment and expenditure have been going down which have affected developmental activities and poverty alleviation schemes. Liberalisation has seen a sharp growth in social, economic and regional inequalities. Those below the poverty line even according to official statistics have registered an increase, especially in the rural areas. The continuing rise in the prices of essential commodities, particularly food items, has hit the poor the hardest especially in the background of the curtailment of the public distribution system. The cutbacks in social sector expenditure in education, health, employment and welfare schemes have a disastrous effect on the working people.

3.14 The working class has borne the brunt of the heavy burdens imposed by the capitalists and the government. The real wages of the workers do not rise because of the ever-increasing prices. With the crisis in the industrial sphere becoming endemic, the workers face the onslaught of closures and retrenchment. The labour laws supposed to safeguard the rights of the workers are defective and even these are not enforced; violation of laws by the employers is the norm. The recognition of trade unions by secret ballot and the right of collective bargaining are denied. The offensive of liberalisation and privatisation has rendered lakhs of workers jobless without any social security to fall back upon. The deregulation of the labour market is demanded as part of the policy of liberalisation. Benefits and rights earned by workers through prolonged struggles are sought to be curtailed. Permanent jobs are being converted to contract or casual jobs. Working women get less wages and are the first to be retrenched. Child labour has increased and working children are subjected to the worst forms of exploitation. Outside the organised sector millions of workers get no protection from the labour laws and are deprived of even the minimum wages set by the government. The plight of the labouring men and women in the huge unorganised sector is one of drudgery. They work for a pittance for long hours, often in hazardous conditions with no social security. It is the unremitting labour and the exploitation of the working class which has provided the profits for the bourgeoisie, the big contractors and the multinational corporations.

3.15 The agrarian question continues to be the foremost national question before the people of India. Its resolution requires revolutionary change, including radical and thoroughgoing agrarian reforms that target abolition of landlordism, moneylender-merchant exploitation and caste and gender oppression in the countryside. The bankruptcy of the bourgeois-landlord rule in India is nowhere more evident than in its failure to address, much less solve, the agrarian question in a progressive, democratic way.

3.16 After independence, instead of abolishing landlordism, the Congress rulers adopted agrarian policies to transform the semi-feudal landlords into capitalist landlords and develop a stratum of rich peasants. The legislative measures for abolishing the old statutory landlordism permitted them to get huge compensation and retain big amounts of land. Implementation of tenancy laws, which provided for the right of resumption of land under the pretext of self-cultivation led to the eviction of millions of tenants. Land ceiling laws provided sufficient loopholes to maintain large holdings intact. Millions of acres of surplus land were neither taken over, nor distributed to the agricultural workers and poor peasants. The record of the Congress party is one of monumental betrayal of the historic opportunity for rural transformation. Land reforms under the existing laws have been implemented only in West Bengal, Kerala and Tripura by the Left-led governments headed by the CPI(M).

3.17 The agrarian policies of the Congress governments and their successors were designed to benefit the landlords and rich peasants in the allocation of funds for investment and government loans. Bank and cooperative credits were cornered by these sections. From the late sixties, the application of technology, introduction of high-yielding seeds in new varieties of wheat and rice and chemical inputs enhanced the productivity of foodgrains and other non-food crops. This growth in agriculture was accompanied by widening inequalities. Though India produced more foodgrains and was capable of achieving self-sufficiency in food, millions remained deprived of sufficient food and prey to hunger and malnutrition.

3.18 In agrarian relations, the major trend has been the development of capitalist relations in the countryside which is characterised by: The proletarianisation of large sections of the rural working masses and a huge increase in the number of agricultural workers as a proportion of the rural population; the accelerated differentiation of the peasantry; production for the market; the large-scale eviction of tenants holding traditional leases; and increased levels of re-investment of capital in agriculture and agriculture-related activity by the rural rich, particularly landlords, laying the basis for the reproduction of capital on a scale that did not hitherto exist.

3.19 If the development of capitalist relations in agriculture is clearly the major all India trend, it is equally evident that agrarian relations are marked by greater regional and sub-regional diversity and by unevenness in the development of capitalist relations of production and exchange. There are regions of the country where capitalism in agriculture has advanced and where commercial agriculture and cash transactions dominate the rural economy; there are regions where old forms of landlordism and tenancy and archaic forms of labour service, servitude and bondage still play an important part in agrarian relations. And all over the country, caste divisions, caste oppression, the worst forms of gender oppression and the exploitation of the poor by usurers and merchant capital continue unabated. Capitalist development in Indian agriculture is not based on a resolute destruction of older forms, but has been superimposed on a swamp of pre-capitalist production relations and forms of social organisation. The development of the “modern” does not preclude the continued existence of the archaic: India is a vast and living example of the rule that capitalism penetrates agriculture and rural society in a myriad ways.

3.20 Five decades after independence, owing to the bourgeois-landlord agrarian policies, 70 per cent of the peasantry comprises poor peasants and agricultural workers whose lack of productive assets, low incomes and wretched conditions of life characterise mass poverty. The monumental scale of rural poverty in India has no parallel among the nations of the world. Even according to official data, more than 285 million people in rural India were below the poverty line fifty years after independence. Poverty, however, has many dimensions. It is not confined to income destitution. For the masses it manifests itself in a multitude of ways. The rural poor have little or no access to land and other means of production. Concentration of land and inequality in ownership continues without major change. This is accompanied by a similar concentration of irrigation water resources largely in the hands of the rural rich. The peasantry and agricultural workers have no access to credit at reasonable rates and they are deep in debt at usurious rates of interest. Low wages and wage discrimination against women is a prominent feature. The average number of days of employment available to agricultural workers is less than 180 days a year. More than 50 per cent of the rural population is undernourished, the rates of rural literacy are abysmally low and the rural poor live in unhygienic conditions in poor housing with no drinking water and health facilities.

3.21 Most of the rural areas have seen the rise of a powerful nexus of landlords-rich peasants-contractors-big traders who constitute the rural rich. They dominate the panchayati raj institutions, co-operative societies, rural banks and credit agencies except in the Left-dominated states, and control the rural leadership of the bourgeois-landlord parties. The surplus extracted by these sections are ploughed into money-lending, speculative activities, real estate development and also to establish agro-based industries. The dominant class in the rural areas utilise caste affiliations to mobilise support and resort to violence to terrorise the rural poor into submission. Even after 50 years of the promulgation of the Constitution, no government has adopted a central legislation to guarantee minimum wages and improved living conditions and social security for the agricultural workers, due to the opposition of the landlords.

3.22 With rapid commercialisation of the rural economy, the market for foodgrains and agricultural commodities has grown enormously. The grip of the monopoly trading concerns over agricultural produce has tightened. With liberalisation, the MNCs which operate in the world market with advanced technologies at their command have a greater and direct control over the prices of agricultural commodities. The intensification of the exploitation of peasants through unequal exchange and violent fluctuations of prices has become a permanent feature. As a result, the peasant is fleeced both as a seller of agricultural produce and as a buyer of industrial inputs.

3.23 The liberalisation policies which followed the exhaustion of the State-sponsored capitalist development have led to the agricultural and rural development policies taking a dangerous and reactionary turn in the last decade of the twentieth century. These policies include decline in public investment in agriculture, in irrigation and other infrastructural work; credit from the formal sector has also sharply declined which hits the poor rural households the most. Schemes for rural employment and poverty alleviation have been cut back. The policy thrust towards export-oriented agriculture has led to changing land use and cropping patterns to meet the demands of the imperialist countries. De-emphasising foodgrain production and undermining India’s self-sufficiency in food production is a direct threat to sovereignty. Under the WTO regime, all quantitative restrictions on the imports of agricultural commodities have been removed which seriously affects the livelihood of farmers. Pressure is being mounted for the dilution of land ceiling laws by the states and for leasing out lands to Indian big business and foreign agri-business. MNCs are entering the sphere of agricultural production in the seeds, dairy and other sectors. Under pressure from the WTO and the MNCs, policies, which surrender India’s independence in respect of its biological resources and relinquish the rights of farmers and genuine plant breeders, are being pursued. The State sponsored agricultural research and extension systems are being weakened.

3.24 The development of capitalism in agriculture under State sponsorship has led to a sharp division between the rural rich comprising the landlords, capitalist farmers, rich peasants and their allies and the mass of the peasantry mainly agricultural workers, poor peasants and the artisans. The subsequent policies of liberalisation in agriculture have further increased the burden on the rural poor. It is this exploitative order which is responsible for mass poverty. Without breaking the land monopoly and ending the debt burden of the poor peasants and agricultural workers, the basis for the economic and social transformation of the country cannot be laid.

3.25 The imperialist driven globalisation and the policies of liberalisation adopted by the Indian ruling classes have heightened the imperialist penetration in all spheres of our country. The opening up of the economy to the multinational corporations and imperialist finance capital has been the basis for the penetration and influencing of all spheres of Indian society. The bureaucracy, the educational system, the media and the cultural spheres are being subjected to imperialist penetration.

3.26 With the changed correlation of forces in the world as a result of the setback to socialism, the growth of fundamentalist, reactionary and ethnic based chauvinism has its impact on India too. Imperialism seeks to exploit the growth of such forces for weakening the unity of the country so that its hold and influence can be strengthened. The growth of a powerful international media controlled by transnational corporations enables imperialism to directly intervene and influence social and cultural life. The purveying of consumerist, egoist and decadent values through the transnational media has a direct impact on our society. The media in India controlled by the big bourgeoisie and other commercial interests systematically spread the same values. The development of healthy, democratic and secular values requires the combatting of such retrogressive trends.

3.27 The Constitution of the Republic of India which was adopted in 1950 had laid down a set of directive principles to be followed by the State. These include: adequate means of livelihood for every citizen and the right to work; an economic system which does not result in the concentration of wealth; right to education and provision of free and compulsory education for children; living wage for workers and equal pay for equal work for men and women. None of these principles have been realised in practice. The glaring gap between the Constitutional precepts and the practice of the bourgeois rulers is a scathing indictment of the bourgeois-landlord system instituted after independence.


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