India's "democratic planning" has contributed to the spectacular growth and expansion of the big bourgeoisie as well as of the branches and subsidiaries of the transnationals based in foreign countries and other companies controlled by them. We shall cite a few instances.
The total assets of the Tatas amounted to Rs 69 crore in 1948,[1] while the total paid-up capital of the companies controlled by the Birlas, the second largest business house in India, was Rs 21.85 crore in 1947.[2] In 1993-4, the assets of the companies in the Tata group soared to Rs 22,750 crore. During these years, the Birla house split into several groups. In 1993-4, the assets of the B.K.-A.V. Birla group companies were valued at Rs 10,758 crore; those of the L.N.-S.K. Birla group at Rs 1,832 crore and of the G.P.-C.K. Birla group at Rs 1,639 crore.[3] There are other Birla groups like the K.K. Birla group, which too are among the big business houses of India. (According to a survey by Business Today, 22 Aug. 1997, the Tata group's assets in 1947 were Rs 62 crore, growing to Rs 37,511 crore by 1997. The same survey puts the assets of the Birla group in 1947 at Rs five crore, whereas in 1997, the following were the assets of various sections of the original group: B.K.-K.M. Birla: Rs 19,498 crore; G.P.-C.K. Birla, Rs 2,530 crore; K.K. Birla, Rs 3,095 crore; P. Birla, Rs 1,237 crore; S.K. Birla, Rs 2,080 crore.) It needs to be noted that these are gross underestimates of the real value of the assets. First, in calculating them, only major public limited companies have been considered and all other companies including finance and leasing companies have been excluded. Second, it is the book-value of the assets that has been taken into account. But the book-value does not represent the actual value which is much higher. A very high level of depreciation is allowed by the Government, which renders the book-value of the plant and machinery only nominal in the course of five to six years. Moreover, large plots of land and various other concessions have been offered to them by the Government at nominal prices. The market-value of the assets would in most cases be quite higher.
The growth and expansion of the Ambanis has been even more spectacular. Their flagship, Reliance Industries Ltd., is now the largest private sector company in India. Its founder, Dhirubhai Ambani set up a small export firm, Reliance Commercial Corporation, in 1950. In 1966 he founded Reliance Textile Industries Ltd. with an investment of only Rs 28 lakh. In the congenial condition created by the 'development' Plans, and relying on State help and its patrons at the helm of the State machinery and transnationals, the total income of Reliance Industries rose to Rs 7,091 crore and net profit to Rs 1,065 crore in 1994-95. Its total asset base was Rs 11,529 crore and net worth Rs 7,193 crore. The Ambanis control several other companies. The Ambani empire straddles textiles, petrochemicals, oil and gas, telecommunications, power, advertising, etc. FIIs' investments in the shares of Reliance Industries work out to at least Rs 1,100 crore (ET, 24 Feb. 1997). And the group has raised approximately $2.5 billion of capital overseas (ET, 30 May and 25 Jul. 1997).
Let us take the case of a subsidiary of a transnational — Hindustan Lever. The Anglo-Dutch transnational Unilever set up a wholly-owned subsidiary Lever Bros. (India) in 1933 with a paid-up capital of just Rs one lakh. In 1994 the share capital of this subsidiary (renamed Hindustan Lever in the meantime) was Rs 140 crore, gross turn-over Rs 3,240 crore and profit after tax Rs 189.96 crore. The Unilever empire in India includes Hindustan Lever and a number of other companies — Brooke Bond Lipton India Ltd, Tea Estates India, Doom Dooma Tea, Ponds and so on. In 1994 Brooke Bond Lipton India's turnover was Rs 1,839.46 crore and net profit Rs 99.11 crore. Like those of many other transnationals, Unilever's Indian empire grows vaster with the passing of years. Equally spectacular, if not more, is the rise and expansion of Imperial Tobacco Company (now renamed ITC). It is one of the three or four largest corporations in India. It also has diversified into several industries and into the service sector. It also has spawned several companies which, too, are doing magnificently.
Speaking of these private empires, K.V. Raghunath Reddy, a former Union Minister, said that the private sector in India is a myth. The private sector is virtually the public sector but managed by a few private industrialists. He said that as on 31 December 1982, there were 10,281 non-government public limited companies in this country, with a paid-up capital of over Rs 3,100 crore. Public financial institutions had invested over Rs 750 crore in equity shares, and by way of loans to these companies more than Rs 9,000 crore. He added that this clearly showed that with small investments, ranging between three and 15 per cent the private sector is controlling the country's economy.[4]
As noted before, 'democratic' planning has also showered benefits on a class of rich landowners who are also traders and usurers. They have arisen as a powerful class in many parts of the country. It has also contributed to the development of a class of wealthy servitors of the ruling classes — corrupt politicians, corrupt bureaucrats, a section of professional people, and a section of academics.
It is this India of compradors and their foreign principals, rich landowners, and the servitors of these classes, that has developed and prospered. But the other India — the India of workers, peasants and petty bourgeoisie (except its upper stratum) — is mostly sunk in misery and gloom.
The government informed the Rajya Sabha in December 1993 that nearly 40 per cent of Indians live below the poverty line.[5] The poverty line as officially drawn takes into account certain calories of food and almost no other needs without the fulfillment of which a man can hardly survive. Avijit Majumdar, then president of the Associated Chambers of Commerce and Industry, was not wrong when he said at a meeting of journalists in Madras in October 1990: "Who says only 50 per cent of all Indians live below the poverty line? Take the minimum essentials of quality life, and you'll find that it is actually 75 per cent."[6]
The following also may throw some light on Kalecki's question — "at whose expense" the development or 'maldevelopment' takes place in India. A report released by the World Resources Institute in 1994 stated that India's upper income group which constitutes 1.5 per cent (roughly 12 million people) of its population, accounts for about 75 per cent of the total consumption of electricity, petroleum and machine-based household appliances.[7]
A Reserve Bank of India study estimated that in 1991 there were 30.3 million unemployed in India. Those underemployed or in part-time jobs could be closer to 35 per cent of the workforce according to economists.[8] Indeed, any meaningful definition of employment should be based on whether the person 'employed' is able to make a living wage. By such a criterion, all those below the poverty line — that is, 36-40 per cent of the workforce — are unemployed/underemployed.
Employment has declined in absolute terms almost everywhere, even in the industries where the level of technology is rudimentary. It is the trend everywhere to scale down permanent employment by replacing permanent workers with contract, casual or temporary employees. Casual labour has been increasing by about five to 10 per cent annually and replacing more regular workers.[9]
According to rough official estimates, the number of child labourers in India is 70 million. The number has jumped from about 10 million in 1971 and from about 18 million in the beginning of the eighties.[10]
The International Labour Organization's (ILO's) World Labour Report 1993 said that forced labour and slavery-like practices keep millions of people, including children, working in bondage in dangerous and degrading conditions around the world, particularly in India, Pakistan and Brazil. It stated that debt bondage, a form of disguised slavery, entraps tens of millions of people in South Asia and Latin America (The Statesman, 3 Apr. 1993).
The World Bank's World Development Report of 1993 observed that India made extremely low investment in public health services and that India has the poorest hospital capacity, lower than sub-Saharan Africa.[11] The number of children who die below five years of age in India is 126 per 1000 births while it is just 21 in Sri Lanka; five in Sweden; eight in Japan; nine in Britain and France; and 11 in the U.S.A. The same report states that 63 per cent of children born in India are malnourished.[12]
A report entitled Investing in Health, brought out by the World Bank in 1993, points out that as regards unsanitary hygienic conditions no country can even come close to India. Over 85 per cent of our population is without any sanitary facilities.[13]
The World Bank's annual report Global Economic Prospects in Developing Countries, released on 15 April 1994, states that the illiteracy rate in India in 1990 was 52 per cent.[14] Most of the children who enter primary schools, most of which are most ill-equipped, drop out soon after. According to a study on education conducted by the Association of Indian Engineering Industry (now renamed Confederation of Indian Industry,) the allocation on education went down from 7.7 per cent in the Third Plan to 2.6 per cent in the Sixth Plan, and it was two per cent of the central government expenditure in 1991-5. More than 90 per cent of educational expenditure is incurred in salary administration.[15]
Inaugurating the Indian Association for the Study of Population in New Delhi on 27 December 1982, Dr. C. Gopalan, president of the Nutrition Foundation of India and former chief of the Indian Council of Medical Research, said that because of malnutrition and undernourishment India was producing more and more citizens of mentally and physically substandard quality. Of the 23 million children who would be born in 1983, only three million, according to him, would be healthy and productive citizens. Of the rest, four million would die in childhood and 16 million would grow up to be adults with poor mental and physical abilities due to serious under-nutrition in their childhood.
This waste of human resources, he asserted, "poses a far greater threat to our nation than any threat of armed aggression from external agencies." Dr. Gopalan said there would be no malnutrition in the country if all available food in the country were distributed. He criticized those who blamed population rise as the cause of the prevailing malnutrition scene. According to him, it was the lack of money to buy food, and not population growth, that was responsible for malnutrition. "Population growth," he said, "provides a convenient alibi for those who are either unwilling or unable to remove the socio-economic and rural urban disparities."[16]
Prakash Singh, a former director-general of police of Uttar Pradesh and Assam and of the Border Security Force, wrote in Economic Times: "It is estimated that between 1951 and 1990, about 18.5 million people including a sizeable percentage of tribals were displaced as a result of various development projects. Out of them 13.9 million people have not been rehabilitated so far."[17] More are being uprooted from their homes and villages so that factories or large dams to generate electricity for the big compradors or imperialist concerns may be built. The uprooted millions are left to fend for themselves with little or no compensation — and to work as coolies or starve to death in strange lands. 'Democratic' planning has so far claimed million and millions of such victims and threatens to claim more.
What is progress or development? As Thomas Balogh, the Oxford economist, said, "there is a fundamental objection to regard as 'progress' any increase in productive capacity and output, irrespective of whose welfare it serves."[18]
It appears that 'development' planning since 1950 has hardly brought about any significant change in the quality of life of the vast masses of the Indian people from what it was in the colonial days. But it has been responsible for one among several significant differences in the other India. "The injection of planning into a society living in the twilight of feudalism and capitalism," said Paul A. Baran, "cannot but result in additional corruption, larger and more artful evasions of the law, and more brazen abuses of authority."[19] No doubt, while writing this, Baran could hardly have imagined the monstrous proportions which corruption, evasion of law and abuse of authority have assumed and thrive today among the ruling classes of India. One aspect of it was revealed in the report of the committee formed in July 1993 with N.N. Vohra, then home secretary of the Indian government, as chairman to investigate the links between crime syndicates, politicians and bureaucrats. Its members included chiefs of the central intelligence agencies including the head of the Research and Analysis Wing, the directors of the Intelligence Bureau and the Central Bureau of Investigation. The report, suppressed for sometime by the government, was submitted under pressure in Parliament on 1 August 1995, in what opposition parties called, a shorter and censored version. It states that big crime syndicates and mafias with international connections have "corrupted the government machinery at all levels" and even the judiciary with the backing of politicians. According to the report, the mafia was virtually running a parallel government, making the State apparatus irrelevant. The report says that in several states politicians have become leaders of these gangs and over the years, get themselves elected to local bodies, state assemblies and parliament.[20] The stories of huge financial scandals, in which men at the helm of the State machinery are involved, that regularly appear in the press, suggest that the State itself is fast turning into a gigantic crime syndicate.
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