Lok Sabha Elections 2004

Campaign Booklets

Under BJP Rule:

Which India is Shining?

The BJP-led government’s media blitz on the eve of the forthcoming Lok Sabha elections is a thoroughly deceitful exercise. The GDP growth rate estimates of 7–8% that are being claimed with great fanfare do not square up with reality. Let us not forget that these figures are just estimates, while in real terms the highest growth rate achieved in the earlier years of the BJP-led government’s tenure has been a little over 4%.

The growth rate of 8% for foodgrains that is being projected for 2003–04 is calculated as a growth on the output in 2002–03, which had experienced a sharp drop from previous years’ output due to drought. The normal monsoon in 2003 has only reversed the declining trend in agricultural production — not something for which the BJP-led government can take credit. Even here, the projected output of 197 million tonnes is less than what had been achieved in 1996–97. What the government does not say is that per capita availability of foodgrains declined precipitously between 1997 and 2001, from 184.55 kg. per annum to 152.1 kg. per annum.

The inhuman face of the BJP-led government is apparent from the fact that, precisely in this period while people were starving, foodgrains piled up in the government’s granaries — between 1998 and 2001, foodgrain stocks increased from 18.24 million tonnes to 58.03 million tonnes. Ironically, burgeoning buffer stocks has been hailed as a sign of prosperity of our country. The reality is that with declining incomes, the poor in this country are eating less than they were 5 years back. Their situation was further compounded by savage cuts in the Public Distribution System and increase in prices of food distributed through the PDS. Even the deaths caused by acute hunger and mass starvation reported from the drought-prone areas of Orissa, Madhya Pradesh, Rajasthan and other states last year failed to wake up the insensitive government to the dire need of utilising the buffer stocks for food-for-work programmes and the reversing of the dismantling of the PDS.

To deflect criticism away from its anti-people policies, the BJP-led government came up with a simple ploy — if you cannot reduce poverty, manipulate the poverty figures! Between 1989 and 1998 the National Sample Survey Organisation (NSSO) showed no improvement in the incidence of poverty in the country. Suddenly, in 1999, the NSSO used different reference points to calculate poverty estimates and came up with the startling revelation that there had been a drop in poverty rates by about 10%! The people of this country cannot be hoodwinked by such gross manipulation of statistics. The real picture is clear when we see that consumption on basic items by the poorest 40% of the rural population has fallen by 5% between 1997 and 2002. In the same period, the consumption of the richest 20% in urban areas has grown by 25%. It is indeed transparent that it is the rich who have benefited and are ‘shining’ after 5 years of misrule by the BJP-led government, while the poor are consigned into the quagmire of poverty and destitution.

Grim Employment Scenario

The official figures available on employment show rising unemployment across the country. The total number of job seekers has increased at a much higher rate than the total number of jobs created in the country, leading to an increase in the total unemployment rate. While there is an increase in both urban as well as rural unemployment, the situation is particularly grim in the rural areas where employment growth has collapsed following cutbacks on rural development expenditure.

Table 1: Unemployment Rates

Source: Economic Survey, Government of India, 2002–03.

Further, there has been an absolute decline in the number of employed in the organized sector by 1.76 lakhs during the tenure of the BJP-led government. In the past 5 years the government has systematically cut jobs in government departments and has imposed a ban on recruitment. Employment in the organized private sector has also shown a marked decline. The recent riots involving youth from Assam and Bihar centred around vacancies announced in the Railways, for which over 7 lakhs applications were received from across the country, brings out the true plight of the educated unemployed.

Whither Development?

Rural development expenditure by the government, as a share of GDP, has averaged around 6% during the 5 years of BJP rule. In contrast, during the seventh plan period (1985–90) the share was 14.5%. This sharp cutback has brought on a crisis in the agrarian sector, further compounded by rising input costs and trade liberalisation favoring foreign companies and imported products. This has led to growing indebtedness within the peasantry, and the tragic suicides by farmers across the country. The government recently announced a pre-budget sop of Rs 50,000 crores for agricultural infrastructure and a further Rs 50,000 crores for infrastructure and manufacturing. However, the actual outlay in the interim budget totaled a meagre Rs 2,200 crores, i.e. just 2.2% of the promised amount!

The growth of small-scale industries has slowed down significantly in the last 5 years, from a growth rate of 8.43% in 1998 to 6.08% in 2002. Under pressure from big business houses, the BJP-led government has expressed its intention of phasing out reservations for the small-scale sector, on the supposed claim that it shall make the small-scale industries more ‘competitive’. The outcome of such ‘competition’ is clear — industrial sickness has increased, with the number of cases of ‘sick’ industries registered in the BIFR showing a substantial increase (from 967 between 1992–97 to 2,565 between 1998–2003). Moreover, a staggering 1,645 lockouts have occurred between 1998 and 2002. Despite increasing industrial sickness and slowdown in the growth of small-scale industries, the industrial and trade policies of the BJP-led government have shown a clear bias against domestic industries. This is shown by the fall in customs duties (i.e. taxes on imported goods) and a rise in excise duties (i.e. taxes on domestic goods). This is a sure recipe for de-industrialisation of the economy. The decline of the share of industry in the national output from 29.35% in 1990 to 26.45% in 2001 shows the trend towards de-industrialisation, which has been catalysed by the policies of the BJP-led government.

Bonanza for Big Business

The BJP-led government has been the most unabashedly pro-big business government independent India has ever seen. Selling off national assets for a song to domestic and foreign corporates under the newly-created Ministry of Disinvestment has been a cornerstone of its policy. The BJP-led government has privatised several profit-making PSUs. Out of the total of Rs 894.23 crores generated through such strategic sales between 1999 and 2003, Rs 445 crores came from the sale of 11 profit-making PSUs. Profit-making PSUs are an important source of non-tax revenue for the government, and there cannot be any justification for such privatization. Along with the aggressive disinvestment programme, sleazy deals overtly favouring private players close to the BJP leadership have proliferated. The latest Public Issue of ONGC shares that have been lapped up by frontpersons of the US oil industry is the most recent chapter in this sordid saga, where public assets built by the blood and sweat of the Indian people are being sold away to private companies.

Huge benefits to big business were doled out in the form of tax breaks announced in successive budgets during the tenure of this government. As opposed to the scheduled corporate tax rate of 39.55% for the financial year 2000–01, big monopoly houses like Reliance, Tata, Birla and Uni Lever (which is a foreign company) paid effective taxes at the rates of 5.84, 14.86, 21.68 and 20.61 respectively, taking advantage of the tax deductions.

Table 2: Taxes Saved by Companies in 2000-01

In the interim budget of 2004, further cuts in customs duties on several importable commodities have been announced, including items like cellular phones and laptop computers. Inland travel tax and foreign travel tax have been abolished and excise duty on aviation fuel halved, which would bring down the cost of air travel. All these sops obviously meant for the rich would cost the state exchequer a whopping Rs 9,000 crores. Thus the BJP-led government, on the one hand cuts development expenditures on food and fuel subsidies to reduce its ‘deficit’, on the other hand doles out thousands of crores to business houses.

The much-touted ‘feel good factor’, even if pure fiction for the bulk of the population, does hold good for Indian big business since they have all the reasons to feel good. The assets of big monopoly houses increased substantially during BJP rule.

Table 3: Increase in the Total Assets of Monopoly Houses

    Source: Prowess Corporate Data Base, CMIE

 Kowtowing to Financial Speculators

The BJP-led government often boasts of the $100 billion-strong foreign exchange reserves. These ballooning reserves are mainly a result of portfolio investments made by Foreign Institutional Investors (FIIs) and NRIs to make speculative capital gains in Indian financial markets, which have been progressively liberalized by the BJP regime. For the time being these markets are witnessing some growth. However, as has been painfully experienced by countries of South East Asia, Russia, Brazil, Argentina and Turkey, these speculative ‘hot money’ flows can suddenly reverse direction, precipitating currency crises. When the time would come for the speculators to withdraw funds from the Indian markets, they would siphon off much more than the volume of the foreign exchange reserves. Undaunted by the spate of financial scandals, most notably the UTI scam, the government has proceeded apace to encourage speculative dealings in the Indian stock Market.

Overthrow this Anti-People Government