An Attack on India's Sovereignty


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Political Enslavement

               (i) Law of the land sabotaged

               (ii) The political Parties

                       (a) Saffron Combine’s Fake Swadeshi

                       (b) Revisionist CPI/CPM’s Sham Anti-imperialism

               (iii) NGO Factor


Economic dependence and political enslavement are nothing but two sides of the same coin. One cannot exist without the other. To say that India is economically dependent, but politically free, as portrayed by some liberals and the revisionist CPI/CPM, amounts only to looking at the form rather than the essence. Politics is the concentrated expression of economics. Though there is no mechanical one-to-one relation between the two, both are intrinsically linked. To create a Chinese wall between them amounts to mere political semantics in order to dupe the masses and destroy the cutting-edge of the anti-imperialist struggle.

Prior to 1947, when the British ruled the country directly, the bulk of the economy was tied to the chains of British imperialism, and TNCs based in London. The powerful national libration movements throughout the world resulted in a temporary retreat of imperealism. After 1947, while British control weakened, over-all imperialist control continued, and India turned from a colony to a semi-colony. Now, imperialist domination was indirect (through the compradors), and therefore to some extent diminished relative to the colonial period; so also economic control weakened relatively, allowing the Indian compradors to maneuver between the various imperialist powers. So, in the 1947-1990 period we find both economic and political control shifting, first to the US, then towards the Soviet imperialists, and then again back towards the US. Throughout this period the British continued to exert its influence (economic and political) on the country, but as a second-rate, weakened imperialist power. Also, other powers asserted influence, depending on their relative strengths internationally, and the extent of their geo-political influence in the region. So, we see that during this period of semi-colonial existence, both economic and political domination of the country continued in varying degrees. That is why we maintain that ‘independence’ was fake, and India did not become a free country in 1947. Only the form changed, while the essential content remained the same. If there was a change in the extent of domination, it was only a quantitative difference from what existed earlier, and not a qualitative change.

In the post 1990 period we find that both the economic and the political domination of our country by imperialism, particularly the US, has been growing at an enormous speed relative to the 1947-1990 period. The danger is increasing of India moving from being a semi-colony towards becoming a neo-colony (i.e. a colony of a new type) of one particular imperialist power. At present, it is US domination of the country that is paramount. Internationally too, though economically weakened, it is the only superpower, and the number one enemy of the people of the world. But, whether it becomes a neo-colony of the US or not will depend on the international alignment of forces in the future.

Over this past decade, after the process of globalisation intensified, we see an enormous impact on the sovereign rights of the country, wherein nearly all the laws of the land have been changed at imperialist dictates; where governments, at both the Central and State levels, are far more deeply interwoven with imperialist bodies and governments; where economic policies are blatantly being dictated by the imperialist bodies; where imperialist culture is penetrating every urban household, through its stranglehold over the media; and where even the country’s defense and intelligence apparatus are becoming more and more entwined with a US and Israeli fifth-column.

Let us now look at the extent at the further of the loss of sovereignty in the various spheres of governance and control over the state apparatus.

i) Laws of the Land Sabotaged

Already in Chapter II we have seen the extent to which the laws concerning economic development have been changed in order to better serve the interests of foreign finance capital. A major restructuring of the of the legislative framework has been taking place in order that it is brought in line with World Bank-IMF-WTO directives.

Besides the changes already mentioned in Chapter II of this booklet, a commission formed to review central laws and amendments in May 1998, took merely five months to recommend inter-alia repeal of 1,300 laws and amendments out of the 2,500 laws in force. Expeditious amendments have been suggested in respect of a ‘critical’ list of 109 laws. Action has been initiated by several ministries to put these changes into effect. Even the Constitution is said to be in need of a comprehensive review.

In order to amend these laws the government has gone through the farce of appointing Commission after Commission. These Commission reports invariably come out with an extreme view-point, tutored by the World Bank/IMF combine. The report-writers are nothing but paid hacks of the imperialists, agents of the TNCs and their local comprador chamchas. A good example of this is the proposed changes in the labour laws as suggested by the Commission report recently presented to the Prime Minister. Here we shall take just one example.

On June 29, 2002 the Chairperson, Ravindra Verma of the National Commission on Labour (NCL) presented its report, which seeks to bind hand-and-foot the working-class to the dictates of big capital. Reconstituted in 1999 by the BJP, the Commission has demanded the radical overhaul of all working-class rights. Even before its release, in the last budget, amendments were suggested to the Industrial Disputes Act (IDA) and the Contract Labour Act. Soon after the report was presented, Vajpayee, addressing a meeting of the Advisory Council on Trade and Industry on July 10, said that the cabinet had decided to "vigorously pursue" labour reforms. Obviously there is much pressure by the money-bags to speedily implement the ‘recommendations’. What then are these recommendations?

* The ‘consolidation’ of all labour laws into one — the Law on Labour Management Relations. In other words labour is not to have rights but is to be "managed". It suggests that trade unionism should be discouraged and that collective bargaining encouraged so that it is better "managed".

* It gives the right for companies employing up to 300 workers, (in the budget 1000 workers was the proposal) to close without permission. But, in actual fact, even for the large companies, no permission is required, as, if the government does not respond within 60 days, "permission will be deemed to have been granted". Also, compensation to be given is on the basis whether the company is sick or profit-making.

* It has also says that prior permission is not necessary for layoffs and retrenchment in establishments of any size.

* By dubious wording it, in essence, legitimises contract labour even in core activities.

* It restricts the holidays and proposes the lengthening of the work hours, without any extra pay. It says the gazetted holidays should be reduced to 5, and the restricted holiday be not more than 10 in a year. The work hours be extended to 9 per day, with the maximum per week being not more than 48 hours.

* It, in effect, makes strike action next to impossible. It mentions negotiating agents and has recommended provisions be made in the law for determining such agents, particularly on behalf of workers. "The negotiating agents will adjudicate disputes and may take the shape of labour courts and labour relation commissions to be set up at the State and the Central levels. A Trade Union too can be the negotiating agent, but only if 66% of the workforce endorses its authority".

* To make strike activity difficult it recommends the much-abhorred system of strike ballot in the case of essential services such as water-supply, medical services, sanitation, electricity, and transport in the event of an unsettled dispute. Strikes, as a rule, can be called only by the ‘recognised negotiating agent’, that too only with the support of 51% of the workers in a strike ballot.

* It makes a show of recommending social security for the unorganized sector, but does not state who should fund it — i.e. whether the funds are to come from the government, the employers or from the ill-paid employees themselves.

It is such draconian norms that the government is seeking to introduce in conspiratorial association with the Congress-led INTUC and the BJP-led BMS, who were both part of the Commission. In addition, the state is seeking to divest itself of all the economic and welfare responsibilities, which, in the name of being handed over to the market forces, are falling into the lap of the imperialists.

In the name of economic liberalization it is amending all other laws as well to facilitate the penetration of foreign capital into every aspect of the Indian economy. From dilution of regulations to offering active support through numerous administrative structures, the objective remains one: of increasing foreign capital flows and trade. There are multiple agencies engaged in this task: Foreign Investment Promotion Board, Foreign Investment Promotion Council, Foreign Investment Implementation Authority, Investment Promotion and Infrastructure Cell, India Trade Promotion Organisation, Directorate General of Foreign Trade, Export Promotion Councils, etc.

The crisis-ridden imperialist economies are desperate for markets. They demand that even the most insignificant spheres (like even water, garbage collection, etc.) be opened out to them. The Indian comprador rulers have willingly obliged. But, not only markets, they demand maximization of profits — through strangulation of labour and massive government subsidies. For this the entire laws of the land are being changed.

Post-1990 industrial policy moved in three directions. The first was the removal of capacity controls by ‘de-reserving’ and ‘de-licencing’ industries, or abolishing the requirement to obtain a license to create new capacity. As a result of the de-reservation of areas earlier reserved for the public sector and the successive de-licencing of industries, there were only nine industries for which entry by private investors was regulated by end 1997/98.

The second area of industrial reform related to the dilution of the provisions of the monopolies and Trade Practices (MRTP) Act, so as to facilitate the expansion and diversification of large firms. Prior to 1991, all firms with assets of a certain size (pegged at Rs 100 crores in 1985) had been classified as MRTP units, which required special approvals to undertake new investments. This limit was scrapped in its amendment.

The third type of liberalization in industry involved foreign investment regulation. The first step in this direction was the grant of automatic approval, or exemption of case by case approval, for equity investment of up to 51% and for foreign technology agreements in identified high-priority industries. Subsequently the Foreign Exchange Regulation Act (FERA) was modified so that foreign equity were to be treated on par with Indian companies. Further, NRIs and overseas corporate bodies owned by them, were permitted to invest up to 100% in equity in high-priority industries with greater freedom for repatriation of capital. Foreign investors were allowed to use their trademarks in Indian markets. Subsequently, automatic approval was allowed for foreign equity in excess of 51% in certain sectors, and up to 100% in many. Now, 100% foreign equity is allowed in most businesses.

Liberalization and a free market for the flow of capital, results in the domination and the swallowing up of everything indigenous by big capital. In the face of the giant TNCs Indian companies stand no chance, except by tying up with them and becoming nothing but an appendage of foreign capital. This increasing dependence on foreign capital has also been promoted through the big spate of mergers and acquisitions in the country, where TNCs takeover local companies. All the laws have been changed to infact facilitate this process, which continues to this day.

A similar policy was to be seen in Trade liberalization. A major feature of the economic reforms of the 1990s were the steps to dilute import controls by rapidly reducing the number of tariff items subject to quantitative restrictions (QRs), licensing, and other forms of discretionary controls on imports. Along with this there were continuous cuts in the tariff rates on all commodities being imported. Successive EXIM (Export-Import) policies has thrown open the country to a flood of cheap imports, badly hitting the small-scale sector and also agricultural commodity prices.

Liberalization of the financial markets began with reform in the banking sector. The process started with the repeal of the Capital Issues (Control) Act, 1947 and the abolition of the office of the Controller of Capital Issues. Companies could now freely seek finance through the capital market. Selected Indian companies were allowed to access international capital markets through Euro-equity shares. A range of non-banking financial companies, including private mutual funds were allowed to operate. Insurance was opened up to foreign capital and private companies. Investments norms for both NRIs and FIIs were continuously liberalized and they were allowed to register and invest in India’s stock market. The ceiling on investments has been continuously relaxed and now they can invest up to 100% in companies. The reforms in the banking sector also entailed the defacto privatization of PSU banks and greater access of foreign banks to the domestic market. All legislation has been bended in such a way that it allows for foreign capital to completely sweep the financial markets of the country.

The exchange rate of the rupee has also been liberalized from a fixed rate to one determined by the market resulting in the continuous devaluation of the rupee. In addition the rupee has been made fully convertible on current account and is heading towards capital account convertibility (CCA). The latter would mean no distinction between the rupee and the dollar allowing capital flight on an unprecedented scale. It is this policy that ravaged the East Asian economies in 1997. Already current account convertibility has facilitated an enormous leap in capital flight from the more controlled regime of earlier; one can imagine what CCA will result in. Already the creation of the Tax haven in Mauritius, the latest policy change allowing NRIs free repatriation of their wealth, the setting up of SEZs, etc. have taken the country half way to the disaster of CCA.

Liberalisation of agriculture has resulted in the defacto winding up of the public distribution system, decline of priority sector lending by banks, a reduction of the subsidy on inputs into agriculture, a reduction in rural investment by the government, and steps towards the removal of all land ceilings. Such policies have created havoc with the rural sector of the economy and merely acted to facilitate the entry of giant agri-business in India.

In this past decade of ‘globalisation’ there must hardly be single law that has remained untouched, and the process continues apace. Amongst all the din in the Lok Sabha on trivial issues, a stream of Bills get passed in each session without even getting noticed. It is these that have direct bearing on the policies of the country, but as all the parliamentary parties, in essence, favour ‘economic reforms’ they get passed without any opposition. The noise made on stupid issues acts as a good camouflage to hide these traitorous deeds of the legislature in amending the laws at the dictates of the foreign powers and their multilateral agencies.

Not only this, the judiciary has openly turned into a vile tool of big capital passing the most reactionary judgments on a string of issues concerning labour, tribals, peasants, small industrialists, dalits, women, and even human rights and people’s welfare.

So, the executive, legislature and the judiciary all work hand-in-glove to implement the ‘economic reforms’ at the dictates of the imperialists.

ii) The Political Parties

All the ruling-class parliamentary parties, whether from the extreme right to the ‘left’ fully support the present economic policies of globalisation and ‘liberalisation’ of the economy. Since 1991 all have been in power, at one time or the other, at the Centre, and none deviated from the policies of economic reforms. Besides, even today, all are in power in some State or the other, and the extent of their capitulation to imperialism and the TNCs cannot be distinguished by which party is in power. The parties and governments may come and go, on some issues they may differ, but on the question of dancing to imperialist-dictated policies there is no difference whatsoever. Notwithstanding the rhetoric of some parties, particularly when in opposition, when in power, their policies are the same.

If we look at the situation today, there are four major political trends within the ruling circles — first, the Hindu fascist trend; second, the Congress(I); third, the regional parties; and fourth, the so-called ‘left’. If we look at these four trends we find that the Congress(I) and most of the regional parties (whether TDP, DMK, AIDMK, etc.) openly support globalisation and make no pretense even at opposing it. Some regional combines like the RJD, SP, etc. swing between positions similar to the ‘left’ and the Congress(I). It is basically the ‘swadeshi’ jargon of the Hindutva combine and the anti-imperialist rhetoric of the ‘left’ that has to be seriously considered. The others are naked in their support for the imperialists, and much attention need not be devoted to them here.

But, before coming to these two trends, it is necessary to establish some clear political basis for anti-imperialism.

The first and most important point is that there is a misnomer that puts the TNCs as "foreign" and India’s big bourgeoisie as "national". This is done by all the above political trends. As has already been seen, (Chapter IV) the big bourgeoisie in India, though at times may come into some contradiction with foreign capital, they basically act as vehicles for foreign penetration into the country. So, any anti-imperialist struggle within the country is inconceivable without also attacking these agents of theirs.

Second, India being a semi-colony, the state machinery is also tied to imperialism through thousands of threads. This includes the government, the bureaucracy, the military and all policy-making bodies. This has become even more so in the period of globalisation. So, to expect the government and other wings of the State to take policies opposed to imperialism, is nothing but utopian. In fact the various governments and different sections of the bureaucracy have proved to be the most servile boot-lickers of the imperialists. So, any genuine anti-imperialist movement is inconceivable without simultaneously targeting their agents within the government and bureaucracy.

In semi-colonial, semi-feudal India it is the block comprising the comprador big bourgeoisie and the state — i.e. the comprador bureaucrat class — that are the most servile agents of imperialism within the country. Without their assistance and collaboration the imperialists would never have been able to get such easy access to the country. So, to build any anti-imperialist movement without targeting these traitors within the country as well, would be a futile exercise. The minimum basis of any anti-imperialist movement in India must not only target the imperialists (TNCs, multilateral institutions, pro-imperialist government policies, etc.), but also their agents within the country. On this, all the above political parties, including the ‘swadeshi’ and ‘left’ are silent!! On the contrary, they all treat these agents of foreign interests as ‘national’.

Given the fact that the Congress(I) and most regional parties make no pretense of their pro-imperialist servility, we shall here take up only those of the saffron combine and more particularly the ‘left’. The Congress(I), in order to bypass the key factor of economic reforms (they have never opposed even once any of the drastic policies of economic capitulation by the BJP), has conveniently made secularism its main political plank, when they themselves were the initial initiators of this present trend of Hindutva in the mid-1980s.

As for the regional parties they survive on anti-Centre sentiment, which has resulted from the unitary character of the Indian State — resulting in arbitrary controls of the Centre over the States. These comprador regional parties use this sentiment to sustain their rule and have little need for other rhetoric. Some of them, like the TDP, DMK, AIDMK, can be seen as the most servile tools of the imperialists.

To make political capital and gain power, any and every issue is used by them — whether secularism, corruption, scandals, etc. — but never the question of economic policy, which, in fact, effects the lives of over 80 crore of our people. Anyhow, let us now turn to the two major drum-beaters:

(a) Saffron Combine’s Fake Swadeshi

The Sangh Parivar’s ‘nationalism’ is directly contradictory to the BJP’s humiliating capitulation before imperialism. So, to dupe its rank-and-file in particular and the country at large, it had to cover its tracks by a show of anti-imperialist rhetoric — at least for some time.

In Sept. 1993 the Rashtriya Swayamsevak Sangh organized a convention under the banner of the Swadeshi Jagran Manch (SJM). The Manch went on a high profile campaign for the boycott of some TNC (transnational corporations) products. However, this campaign fizzled out when several Indian comprador big businesses, whose products it advocated, (as substitutes for foreign products) themselves sold out to foreign firms. Its next high profile campaign was against Enron’s Dhabol plant. Though it got the original agreement between Enron and the Congress(I) government cancelled, the new Shiv Sena government in Maharashtra, signed an even more humiliating agreement with Enron, which was later endorsed by the BJP/RSS combine. In fact the one single task of the 13-day government of Vajpayee at the Centre in 1998 was to sign the counter-guarantee of Enron.

Meanwhile the saffron governments in Mahrashtra and Rajasthan strained every nerve to attract foreign capital, even in such sensitive areas as mining. But, while the United Front government was in power at the Centre, the BJP made much noise against the capitulationist steps taken by it vis-à-vis the WTO, TNCs, etc. While the CPI/CPM were silently party to the UF’s crimes in selling the country, it was the BJP who made some noises during 1996/97. In Dec. 1996, when India signed the agreement at the Singapore summit of the WTO, Vajpayee, at his demagogic best thundered, "India has signed its death warrant. The economic sovereignty of the country has been jeopardized". At that time Yeshwant Sinha opposed the UF government’s decision to allow in four foreign insurance companies. Murali Manohar Joshi opposed the favouring of foreign pharmaceutical companies through change in the patent laws. And in mid-1997 the BJP charged the UF of an "unholy surrender of the national interests" when it sought to phase out Quantitative Restrictions on imports. Yet, this was more rhetoric, less action. When it came to the actual voting on the 1997/98 budget, it meekly dropped all its own proposed cut motions. What is more, when it came to power in the coming year, it proceeded with globalisation of the economy at a speed faster then the Congress and UF put together. As can be seen by its actions in the very first year of its power, the rhetoric was only to dupe the masses. Though a section of the people may have been fooled, the TNCs and the imperialists were well aware of the reality and had full confidence in the BJP.

In the very first year of the BJP regime (1998/99) the actual flow of FDI surged by as much as 30% over the previous year under the UF government. What is more the ratio of actual flow to approved FDI increased to 45.1% during the BJP regime in 1998/99 from 27.5% in the previous year, when the UF was in power. This indicates a greater confidence of the imperialists in the BJP than in the UF. This confidence was further reflected by the spurt in 100% subsidiaries entering the country as soon as the BJP took over. The share of FDI through 100% foreign equity jumped from 38.6% in 1997/98 to 49.2% in 1998/99 — i.e. nearly half the FDI in the first year of BJP rule comprised 100% subsidiaries. The rest ofcourse is history, where the BJP has opened the door to foreign capital, in sphere after sphere, where earlier governments feared to tread — like insurance, banking, mineral exploration, defence, etc.

Today, ofcourse, the SJM and other such outfits have gone into hibernation. The sell-out has now got so blatant that it may no longer be that easy to dupe its cadres and the masses. It has to be recollected that the Sangh Parivar has to address itself to constituencies that are seriously affected by foreign capital. A large support base of the BJP is the small-scale sector. A FICCI survey 1 found that 90% opposed the entry of TNCs. In addition the saffron Trade Union wing, the BMS, is also forced to makes some noises against imperialism, due to the terrifying impact of globalisation on the working-class, particularly the organized sector, where their unions are concentrated. One should not confuse rhetoric for fact. To maintain their leadership over the huge population involved in petty business, and their trade union base amongst organized workers/employees, they may no doubt be pressurized to act; but these actions will be more as a safety valve to let out steam — the pent-up anger against the pro-imperialist policies amongst their support base..

(b) Revisionist CPI/CPM’s Sham Anti-imperialism

The United Front election manifesto claimed proudly that under it, FDI had increased from $2.1 billion in 1995/96 to $3 billion in 1997/98 — a 50% increase. The manifesto further boasted that the UF had "approved $22 billion worth of FDI in just two years compared to $25 billion of approvals in five years of Congress(I) rule". Leaders of the CPM in fact drew up the Common Minimum Programme, the basis of unity for the UF. This emphasized the importance of foreign capital and in fact put a target of attracting $10 billion. So, for all the rhetoric of the CPI/CPM, we find that when sharing power at the Centre, they behaved just like the others.

Even when they rule by themselves, as in West Bengal, here too we find that they implement all the imperialist prescriptions, whether it is of privatization of electricity boards, increasing user charges for health, water, transport, etc. or the raising of educational fees. The Left Front manifesto’s statements on foreign capital are similar to those of the BJP: foreign capital is to be solicited in "priority areas", domestic industry is to be protected from "indiscriminate lowering of import duties" and foreign takeovers. There is however no criticism of foreign capital in consumer goods. There is no mention of the foreign debt or FIIs. There is no criticism of foreign investment in the power sector. There is no call to exit from the WTO; instead they say, " India should take the lead to forge common cause with the countries of the South to negotiate terms which safeguard our interests with regard to TRIMS, TRIPS, and financial services" — a formulation similar to that in the BJP manifesto.

In fact to understand their real ideological position vis-à-vis imperialism, it would be better to look at some of the positions of pro-CPM theoreticians. A classic example is the recently published book (Jan. 2002) on this very subject by C.P.Chandrasekhar and Jayati Ghosh, entitled: The Market that Failed — A Decade of Neoliberal Economic Reforms in India. This book is a classic example of the TINA effect — i.e. there is no alternative to globalisation, only that it should be given a human face.

So the book concludes with the Chapter "Redefining Reforms" and not reversing them. In this Chapter they start by saying "….. the effects of neoliberal reforms cannot be wished away in the terms of the greater degree of integration with world markets and external vulnerability that are now characteristic of the Indian economy". In other words they call on us to accept the horrors of imperialist globalisation, as "economic policy does not occur in a vacuum", and so seek mere adjustments within it. Yet, C.P.C. & J.G. claim to be Marxists, though their thinking differs little from that apologist of imperialism, Amartya Sen. But for all their good intentions to give it a human face, these gentlemen (and ladies) fail to realize that neither does "political policy occur in a vacuum". The aggressive politics of imperialist globalisation does not allow that "human face", as imperialist globalisation entails political (and economic) policy that grows from a crisis. And crisis-ridden economies do not allow for reforms and other such niceties hoped for by C.P.C. & J.G. What they fail to understand is that ‘globalisation’ is the AGGRESSIVE face of imperialism, not its liberal one. Anyhow, most of the suggestions in the book will barely benefit the people, they may, at best, give greater "manoeuvrability" to India’s comprador big bourgeoisie.

What then do they propose as the "Economic Strategies for the next Decade"? First they maintain, "foreign finance capital that flows into the country needs to be regulated". The real question before any genuine Marxist is not merely the nature of flows, but the question whether dependence on foreign capital should be there or not. The question is whether foreign capital should be allowed to continuously rob this country or not; whether one has to put an end to capital flight or not. This is the moot question, if capital has to be made available at low cost for growth within the country. Foreign capital, with its thousands of threads attached, extracts its pound of flesh, and with it flows the blood of the Indian people. C.P.C. & J.G. live in blissful ignorance of this fact and would have us only look at the apparent low-cost of foreign capital. The fact is that foreign capital in backward countries extracts returns three to four fold more than what they extract from their home country. But the CPM and their ideologues see no need to put an end to such loot; they, at best, seek to reduce it by a fraction through ‘regulating’ it.

Next, while referring to trade and the market these CPM theoreticians repeatedly emphasise the importance of exports to develop the Indian market. In this they differ little from the neo-liberal economists; their only difference being that instead of "free trade", they call for "government promoted" trade. But, this difference is semantic. When the government exports wheat at below BPL rates is this "free trade"? When all Indian exports are heavily subsidized, is that "free trade". And whether free or "controlled" with the terms of trade heavily weighted against India, due to continuous devaluation of the rupee (and other factors), what real difference does it make whether it is "free" or government controlled? They go so far as to state: "Successful capitalist industrialization cannot occur in a context insulated from world markets, but requires consciously engaging those markets as part of the strategy of growth." This amounts to saying that no "industrialization" and "growth" is possible without promoting exports. Though they pay lip-service to extending the home market through land reforms, their emphasis is on exports for the industrialisation of the country. In fact the importance of land reforms is put primarily to create "social support for a strong state" and only secondarily to widen the home market. And, for this, the corrupt and autocratic Panchayat Raj of West Bengal is given as their ideal.

Even on the question of the reduction of subsidies to the poor, they defacto, support the existing tendency towards cuts, complaining of the "strains on the exchequer". Their bankruptcy has reached such depths that they merely repeat the same World Bank formula saying that the PDS (public distribution system) should be better targeted towards the poor. Their entire logic on this is no different from that of the neo-liberalists. Though they talk of "extending" the PDS, they say: "To keep the strain on the exchequer of such an extension of the PDS within reasonable limits, there should be an adjustment in the targeting system, towards the poor".

Firstly, the so-called "strains on the exchequer" come not from subsidies to the poor, but primarily the huge doles to big business, the excessive expenditure on corrupt politicians and bureaucrats, and the gigantic non-productive expenditure on the police and military to create its fascist state. While these apologists of neo-liberalism conveniently ignore all these other expenditures, they grudge even the little being handed out to the poor, saying it should be better "targeted". Besides, the huge tax holidays for big business, the reductions in corporation tax, the massive reduction in taxes of the high income bracket, etc. are yet the other cause for the "strains on the exchequer" which our CPM theoreticians would rather not touch. Besides all this, there is, in addition, the estimated Rs 1 lakh crore of black money generated each year by the rich and the powerful, which faces no tax at all (nor do the FIIs, most of which are registered in the Mauritius tax-haven), but C.P.C. and J.G. would rather see the extra morsel squeezed out of the mouths of the poor, than call for demonetisation to tap this vast source of illegal funds in order not to add to the "strains on the exchequer".

All this trash of "strains on the exchequer", "cutting fiscal deficit", etc. etc. are nothing but the stock phrases of the neo-liberalists to push through their anti-people agenda of cutting subsidies and retrenching employees from the public sector. It is unfortunate that these ‘Marxist’ theoreticians should also fall prey to the same neo-liberal logic. Parhaps, this is their fate!

Overall, there is little to distinguish between the conclusions presented in this book and that of the imperialist sponsored neo-liberal economic reformers. Neither is there much difference in the economic policies of the West Bengal government and that of other State governments. Neither was there much difference between the economic policies of the UF government at the Centre, of which the CPI/CPM was a part, and that of the Congress(I) or the BJP-led NDA. Like the ‘swadeshi’ pretenders, their opposition is more often to pacify their rank-and-file and the masses under their influence, which have been badly hit by the policies of ‘economic reforms’. There is no consistent opposition by any of these forces to imperialism.

While the saffron gang now conveniently defines ‘swadeshi’ as cultural nationalism to avoid any anti-imperialist activities and promote their Hindutva agenda, the CPI/CPM make out that self-reliance and anti-imperialism in this day-and-age of globalisation is utopian, impractical and out-dated. This latter argument too is borrowed from the imperialists, and is little different from their "End of History" thesis. The huge upsurge in the anti-globalisation movements in the world would itself disprove this argument, and it is the masses themselves that have brought it right back on the agenda for change.

For all their pretenses, in effect, both are nothing but unabashed apologists of neo-liberalism and globalisation. Though they may join in on some issues on a day-to-day basis, one has to beware of their role, which will eventually stab in the back all genuine anti-imperialist movements. As for all the other ruling-class parties, as already stated, they openly collaborate and make no pretenses about it.

iii) The NGO Factor

Foreign funded NGOs (Non-Government Organisations) in India are an insidious form of organization that has progressive pretensions but act to diffuse movements against the status quo. We see that this form of organization took a quantum leap during the period of globalisation throughout the world, particularly in the backward countries. As we encounter them in all movements and amidst all the oppressed sections, it is necessary to understand their role. To do so, we have printed in the Appendix two articles by James Petras: Imperialism and NGOs in Latin America 2; and NGOs: In the Service of Imperialism. 3

As shown by these articles NGOs (here, when we refer to NGOs, we particularly refer to the foreign-funded/state-sponsored ones and not the others — many others who honestly mobilize the masses on certain issues, do not play exactly the same role as those being referred to here) play a very conscious role to divert movements in the country away from struggle into harmless self-help economic activities. This then is propagated widely through the imperialist/comprador-controlled media, where the individuals involved are glorified for there so-called service to humanity and their actual work is blown out of context to their real effect at the grass roots. A huge class of intellectuals is thereby created from amongst those who have some genuine concern for the poor (whether they are involved in those activities or not) that are made to believe: "while the Marxists (or naxalites) are only involved in destructive activities like Morchas and violence, it is the NGOs that are involved in something constructive, some real developmental work which is of concrete benefit to the poor."

These sections of the intellectuals, which have some feelings for the poor, are those that have the potential to be drawn towards the revolutionary movements (as one saw in the 1960s and early 1970s). Now these are being systematically co-opted into the system — made lethargic through easy money that comes from funding, and drawn away from struggle through their ‘constructive’ micro projects. The number of such NGOs in India alone would be in their thousands. They are to be found amongst all the oppressed — amongst the rural poor, tribals, dalits, women, slum-dwellers, rag-pickers, prostitutes, etc. While many of those involved in the day-to-day work may personally be honest and genuine social-workers; the NGOs themselves play a different role.

Not only have the NGOs pacified this vast circle of potential rebels, they have ideologically numbed them through their anti-Marxist obsession and the floating of a host of esoteric theories like post-modernism, sub-alteran studies, radical feminism, planet-in-danger-type environmentalism, spiritualism, etc. etc. While critisising globalisation, they have no concrete alternative to it. While negating the rot in the present system, they have been systematically brainwashed by their sponsors to vehemently oppose the socialist and communist alternative — ofcourse, the set-back in the communist movement has made their task easier. They show disgust for the world of bourgeois politics, but rather than oppose and fight it, they, at best, stay aloof from it, at times even support parliamentary alternatives. They stay neutral in the real fight between the haves and the have-nots; under the pretext that all violence per-se is bad. In opposing ‘statism’ of all kinds, they do not therefore see the need of its replacement by something more progressive (like a genuine new democratic state or a socialist state), and therefore in their anarchic and utopian view of society (stateless?), they, in effect, become apologists of the existing system. Above all, they have a stake in the existing system due the large funds they receive from it.

Now if we turn to their actual work at the ground-level, we find its debilitating effect in many ways.

First, and most important, they avoid struggle, and concentrate their major efforts on developmental work, like running dispensaries, schools, training in skills, micro-credit schemes, small production centers, etc. In short, all the tasks that should be demanded from the government are taken up by the NGOs. Local activists/leaders who, left to themselves, would have the potential to lead their people against injustice, get drawn into these projects and the ‘developmental’ activities, at a salary, thereby killing their militancy and diverting their initiative. With the best elements of a locality thus pacified, any revolutionary awakening in that area becomes all the more difficult.

Secondly, such developmental activities, is ideally suited to the market mania of globalisation. Amidst the sprawling poverty of the village or the slum, pockets of commodity production and a credit economy are introduced.

Thirdly, as of today many of these NGOs have themselves been institutionalized, directly implementing projects of the World Bank, or the Central or State governments.

So for example in 1991 itself, 40% of the 229 projects approved by the World Bank had NGO involvement — a 78% increase over the previous year. As early as 1982, an NGO-World Bank Committee was formed for joint consultation, with the International Council of Voluntary Agencies (ICVA) in Geneva, acting as the NGO Working Group’s secretariat. 4

In India it was the Rajiv Gandhi government that took a decision to implement a large number of its welfare schemes through the NGOs. Since then there has been a close link between many NGOs and the central government schemes. In Andhra Pradesh, many NGOs have been directly roped in by the Naidu government to implement World Bank schemes in the areas of the CPI(ML)(PW) in order to wean away the masses from the influence of the revolutionaries.

Though encouraged by Rajiv Gandhi in the mid-1980s, it was in the Eighth Plan (1992-97) that officially Rs 30,000 crores was allocated to the voluntary sector. As a manifestation of the added significance of voluntary action in the economy, the draft outline of the Eighth Plan set apart 5% of its total allocation on welfare for the voluntary sector. In the name of resource-crunch while expenditures on social service sectors were being drastically cut, the Congress(I)’s government could allocate such huge sums through the voluntary sector, was no doubt an indication that it was done under instructions from the Fund-Bank combine. By, 1992 itself it was estimated that there were already over 25,000 voluntary agencies functioning in the country. 5 In the booklet, NGO: Ek Khatarnak Samrajyavadi Kuchakra (Jan. 2002), it was estimated that, by 1995 there were 55,000 NGOs in UP and another one lakh in Tamilnadu alone.Today, the countrywide figure would be in lakhs.

In India they take various forms and shapes, but the concept is not entirely new to the imperialists. Christian missionaries have always played a role of supposed ‘voluntary agencies’. Soon after 1947 the US promoted a number of semi-independent type bodies funded by such intuitions like the Ford Foundation, Rockefeller Institute, etc. While all these old forms continue what the late 1980s and the 1990s witnessed was a mushrooming of bodies claiming a progressive polity — an alternative to the Marxist revolutionaries.

In fact in India, we have three types of voluntary agencies:

The first are the religious ones: To the Christian missionaries we have a host of semi-Christian outfits funded by the Church — both Protestant and Catholic. The latter do not take an overt Christian form and link themselves with progressive issues like Human Rights, etc. Combined with this, there has been a massive sprouting of Hindu religious outfits, particularly since the BJP has come to power. Earlier, many were directly set up by the US imperialists, the most notorious being the Hare Krishna Movement (ISKON), with its unlimited source of funds. Besides this, in addition to the thousands of small and medium organizations, big sharks like the Rama Krishna Mission, Chinmaya Mission, Matha Amrithanandamai Trust, etc. are also heavily funded from abroad. Lately, many RSS linked outfits have spread their network wide amongst tribals, to convert them to Hinduism, and to draw them away not just from the Christians, but more particularly from the influence of revolutionaries (or prevent them from going into their fold).

The second category are the more ‘official’ ones, who also wear a progressive mask, but are directly linked to the Central/State government and implement either their projects or those of the World Bank or other such bodies. They work directly as an arm of the State.

The third category are the most widespread, with an appearance of independence, but closely tied to their funding agencies (and sometimes even the government), which could be directly the TNC/Comprador houses, and/or institutions funded by Western (mostly European, and particularly Scandinavian) governments. Primarily it is these bodies that are useful to divert the revolutionary movement, posing as a ‘grass-roots’ progressive alternative. What has been analysed above mostly refers to this third category, as it is these that give an appearance of being anti-state, anti-system and have spread their tentacles into many progressive spheres — like the feminist, dalit, tribal, peasant, etc. movements.

To give just one example of a high profile NGO that has hogged much media coverage recently is the 2002 Magsaysay Award winner — the Lucknow-based Sundeep Pandey. He has been portrayed as a radical for his ‘opposition’ to the nuclear explosion, to the Gujarat riots and, more particularly for his returning of the cash component of the Magsaysay Award of $50,000 on the grounds that it came from the American Ford Foundation. But, Pandey’s empire has over the past decade channeled a gigantic $1 billion to 250 projects spread out all over the country. 6 So, when he is dealing with $100 million (roughly Rs 500 crore) a year, $50,000 is chicken-feed. Going under the brand name ‘Asha’ the money comes through a network of 36 overseas chapters and is primarily for the education of children. Pandey’s own center in UP, in typical NGO-style has a school, a dispensary and a skill training center. Primarily his work is among dalits, who have joined the Maoists in large numbers in neighboring Bihar and recently some districts of UP. His major network, though, is in Tamil Nadu. Can one have any confidence in the authenticity of the ‘radicalism’ of a person who gets such enormous amounts of funds from NRIs and other business interests in America?

In short, the NGOs are nothing but the human mask of globalisation whose main aim is to diffuse discontent and channel it along lines that in no way harms the interests of big business and do not disturb the status quo. Though the individuals working within them may be honest, and attempts should be made to win them over to revolution, their overall structures act basically as a prop to the existing neo-liberal regimes.



1. Times of India; Dec. 29, 1997

2. Monthly Review; Dec. 1997

3. Journal of Contemporary Asia; Vol.29, No.4, 1999

4. 1991 Progress Report; External Affairs Department GOI on: Cooperation between World Bank & NGOs, Apr.1992

5. Voluntary Agencies: The True Mission; by P.J.James; April 1993

6. Frontline; Aug. 30, 2002




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