Goal-setting for Indian Economy

India’s economy is now fully liberalized. With the retail market open to international competition, the economy that was once predominantly agrarian is now fully capitalistic.

I spoke to few fellow Indian bloggers over the past week and found out that the scene is so euphoric that there seems to be no need to challenge even the mainstream coverage of this issue. After all, the argument goes: more flow of capital eventually helps in more residue of capital.

According to the proponents of this school (which is as varied from purely libertarian school to overtly capitalistic), the rich not only get richer, even the poor get rich. The ‘rich’ poor now own television sets at most homes, and they understand well enough to distinguish the fine products from the rotten. So why deprive human beings from their right to choose? The arguments in favor of the blatant liberalization in India run from philosophical quarter (freedom from the angst) to social (right to aspire) and economic (privilege to own).

Freedom from angst:

I have been brooding over this for a long time now. Very ironically, the market was fully liberalized on January 26 of this year. This piece of news was announced on the 56th year commemoration day of India turning a Republic. The tone that accompanied it was significantly cheerful. Just like the day when former PM Vajpayee waved a victory sign to a surprised Indian people after declaring India as a Nuclear-state (whatever that is).

My well-meaning friends resist that comparison, because unlike the secretive nature of the N-test (when no one had an inkling of it, CIA claims it had no idea either), the liberal nature of Indian markets has been a welcome news in India since 1991, if not before. Some even wonder, what’s the news here? “Didn’t you anticipate this?”

Oh no, I at best, was not anticipating. At worst, was apprehensive. Because the people that Friedman writes about, or we talk about in the talk shows with celebrities are the people who are always visible on the radar screen of the active world audience. And this miniscule minority of India is represented as the public opinion makers.

The angst of the majority people in India are hardly accounted for. The way with which the farmers, the mill workers, the poor students, the unemployed youths, the debt-ridden ‘middle class’ (what a sardonically thing to celebrate this class every now and then), the blackmailed employees, the downtrodden women and children and the indigenous peoples perceive these hype around liberalized economy of their land is never projected in the media.

But the downside of the private economy that has been able to almost obliterate a governmental responsibility to tend to its people is never played on the channels. Where there was a right wing government in power, there used to be a disinvestment ministry selling off the public undertakings. With the advent of the centrist party, there is a prime minister who loves to flaunt how much he can sell off what remains of it.

Between these self-proclaimed intellectuals (Arun Shourie and Manmohan Singh), there is no scope for the views of the largest labor force. There is hardly any discussion about the angst of the 60% of the labor force which is working in the agriculture sector (only 17% are in industries, and 23% are in service sectors). The talk is about the growth rate of Indian economy (which basically means rich become richer), but there is hardly any talk about the budget deficit at 9% of GDP (which basically means the welfare sector for the poor receives the worst treatment)! There is always the talk about the software engineers and English speaking educated youths India has been churning year after year, but there is scarcely any projection of the innate disinterest of the majority to be technocratic and the loss of culturally rich languages due to sheer atrophy.

Freedom from the angst is definitely happening, but just as it suits the ruling elites of the country, it suits the serving elites quite well. And the comfortable conversation among this small group of people must not be misconstrued as beneficial to the people as a whole.

Right to aspire:

It is said that the aspirations of a country changes with its economy. Naturally so, because the goal-setting takes different shapes. For India and most third-world countries, the goal of most part of the 20th century was to free themselves from colonial rule. Upon hard-earned freedoms, the countries then formed alliances whereby mutual cooperation would bring the next desired results of the planned economies. Sectors were prioritized, peoples’ strengths were assessed and economies were developed at times to cater to unique potentials, and at times to reinforce the existing abilities. For example, there were cooperative societies formed to take stock of agrarian sectors dealing with poultry, milk, and varied crops. To allow vent of industrial potentials, adult education schemes, trade unions, and minimum wage standards were fixed.

At this point it is always crucial to recognize that unlike many European nations which thrived on colonizing different cultures, most Afro-Asian nations never went beyond their territories to commit the loots. This was so, not out of any predisposed prosperity of any country, as often projected by revisionists (some like PM Singh, say India was really a rich country before the invasions…obviously forgetting that only the royals were the rich lot, anyway..), but because the prevailing natural settings provided for all the needs to be met with. The people could sow and reap, could cultivate and exist, and were largely worshippers of nature for this very reason. Of course as an alibi to exploit the lands of the indigenous, European savages declared they had a burden to civilize these people and went on draining all the resources exploiting the native masses.

Fast-forward, and with revolutionary shifts in the ownership of world territories, and with the balance of power for the first time shifting in favor of the oppressed people (than the greedy monarchies or the ruling elites of political democracies) after the successful October Revolution of 1917, most countries aspired to be free from the shackles, of both the imperial rulers and their domestic lords.

In the countries where the agriculture workers led the revolution, the scenario brimmed with progressive plans for the sector of the underprivileged, the uneducated, the farmer-at-large. In the countries like India, where agriculture workers were not allowed to dominate the national scene of struggle, the plans were laid out in favor of the privileged, the educated, the engineer-at-large.

Hence no wonder, every educated family demanded its children to aspire to be educated further (not in the history of slavery, casteism, African peoples or French misadventures), and become doctors or engineers (not because, India has one of the worst industrial infrastructure and medical facility anywhere) so that they can make individual financial progresses (of course doctors and engineers are highest paid in the Indian class society, be they live in the country or abroad).

The levels of aspirations of elite Indians continued to be the same. They produced the elite engineers in the 60’s, and they became elite engineers in the 21st century. The students of humanities, of social sciences, fine arts and regional literature remained in need of constant assistance. If individuals have rights to realize their potentials, Indian youths had lost them since quite some time now. Frustrations, constant peer pressure and looming unemployment in every other sector had been forcing most youths to take up studies that required them to work for others, not to pursue their instincts. Now, they have been normalized into a sense of achievement. Only that they have lost their rights to aspire; it is only their occasion to despair.

Privilege to own:
The biggest myth of modern times is that there is such a thing called a Middle Class. So much so that there are bestsellers being written about the great Indian middle class etc. In every way that can suit the entry of multinational profiteers into a third world country, a sizeable population is being declared as middle class. This class is always seen with much applaud, as one which is the backbone of the economy, as one where people should be proud to be part of. This middle class is educated (sic!), well-informed (sic!) and going places (sic!).

Let’s deconstruct. Liberal economists point out that the middle class is the driving force behind a successful economy. Because they consume. In order to consume, they need to be informed. To get their information, they need to be educated.

Precisely! I could not agree more. In other words, there has indeed been a constant effort at creating a middle class, in India or elsewhere. This is very much needed for the multinational businesses flourish. Up until 50 years back, we knew that there was the class of rulers which were minority (landlords, kings, presidents), and there was the class of subjects (the rest of the people). The prime distinction between the two was the right to own. The former had the privilege to own (they owned palaces, lands and virgins). The latter was the dispossessed, always working hard on the land that was never their own!

Come the great equalizer, the proponents of market economy, the torchbearers of French freedom, of American capitalism, of individual liberty hallmarkers. They not only destroyed the feudal societies that came on the way of market competitions, but they also slowly killed the competitions themselves forming market monopolies. So we had giant supermarkets and retail chains, not confined to any specific lands. The first world flourished with such unadulterated exploitation of the market, clearly creating a consumer class whose only work was to buy things, because they had no resources left to challenge the elite producer class whose only work was to invest money to earn more capital. The European capitalism thus produced the largest class societies the world has ever witnessed. To succeed with this mission, they produced huge amount of propaganda materials, we know today as business management, marketing management, advertisement and public relations etc.

As happens with any propagandist move of necessary illusions, the torchbearers of the utopian dreams converted their political traits (of geographically annexing territories) to economic characteristics (doing business extra-territorially). But for that, the obvious obstacles were the large poor yet progressive people of the colonies who never got tired fighting the political elite class. The only way to win them over, then was to woo them over. For India, it started with declaration of Indian middle class people as the “smartest consumers”.

The reality, as opposed to the myth stated, is however slightly different. The much-touted middle class in India or anywhere else is a hoax. This class in question is actually very much part of the dispossessed class. Heavily into debts, much into speculations, far from their own lands with urbanizations, uneasily suffocated amidst uncertain jobs, chronically ill, nuclear families, living in shacks of filthy apartments and constantly feeding the insurance companies. The so-called middle class in the world is the biggest curse of the 20th century. The largest segmented population in the of this planet creates the biggest profit for the business houses and unfathomable loss for its own aspirations. That’s the class which is said to be privileged to own, where actually all it does is the unenviable task of falling into debts and several obligations to operate with. When the ruling minorities owned palaces, no one challenged them to show proof or credibility of purchase. But this class pays a property tax on everything it consumes. It pays for the competition it imagines to be fair. It pays for any endeavor it takes up, to earn basic standards of living with daily struggles that are unknown to the elites. It then is encouraged to compete with its neighbors and when the competition is saturated with both parties in debt, the monopolists take them over using their principles of fair competition.

Indeed, competition is a sardonic term. In the process of competition, the entities always let go of their own progress. The aim is to win the race, not to develop the self. Just as no race is ever equal, no self is similar. For example, India’s unique self demands that it builds itself, its political leaders recognize that the country’s development does not depend on foreign investment that produces large deficit budgets, but on domestic endeavors to plan the pace of its progress and work towards it alone (this may not be the same needs for another country today). To lose focus on this means to be subservient to interests of the global capitalists who know no country, no nationality, no people: they know only profits, at any costs.

Third world developing economies need not compete. They just need to cooperate with each other in delving deep into their own unique human resources and strengthen them. In the case under consideration, with optimal development of agriculture, there can be improvement of environment as well as growth of economy. It’s never too late to save the countries from ecological disasters. And it’s never too late to have economic growth at one’s own terms. It’s never too late to look back at history and learn a lesson or two, that colonies were once divided and ruled. That cannot be allowed to happen again.

Being fully liberalized is a truth. But this truth applies to the owning class. They are now free to operate in whichever way. Not to promote competition. Just like in the US, where only four big business houses killed thousands of media outlets and now own every means of mental production, in the republic of India, a handful of business houses have in the past killed all indigenous products and the accruing benefits to the locals. Needless to state, with the retail market open to multinationals, we shall soon see the demise of anything remotely associated with an independent economy.

My well-meaning friends have a last arsenal. It blasts: if market has helped many western economies, why can’t it help India? To that I have just one spontaneous response: Market matters in a country laid down by marketers (or even the black-marketers). Just like race matters in a racist society (and so we need demographics of races), and caste matters in a casteist society (to figure out why some castes in India are still downtrodden), market matters in a market society. For a country like India, where a huge majority of people are still working in the agricultural sector, the economy needs to be recognized as agrarian in nature and every step must be taken to benefit the farmers. Agriculture matters in an agrarian society. The sooner we realize this, the better it is.



  1. Hi Saswat
    The article is a great analysis in simple words. Such articles need to reach the affected peoples and right places, for proper responses and appropriate actions, ASAP.
    Thank you very much.

  2. A very interesting post. I only discovered this website after see that visits to my own blog originated here. I wonder if Saswat can recommend some English-language radical or Marxist histories of India.

  3. It is a classic piece of concern for common man. In Indian context, it is an absolutely accurate analysis and carries the most appropriate advice.
    The people in power as well as in the main Opposition party in India will try not to understand this speaking story.
    Hence anyone who happens to have an oppertunity to go through it should attract attention of everybody to this superb article and to the advice advanced by its author.Greetings.

  4. Read the rediff story as well. I didnt quite get what ganguly wanted to say. Anyway rediff is a neo-con corporate. What else do you expect of the guest writers there. Just like the telegraph writers…they have a fancy for dollars…

    Carry on the good work, Shaswat.

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