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From: "C R Bijoy" <crbijoy@indiatimes.com> Date: Tue Apr 27, 2004 4:44pm Subject: Is India Shining? Is India Shining? Answer With Your Vote S. P. Shukla, Muchkund Dubey, Kamala Prasad, K. Ashok Rao, Praful Bidwai, Achin Vanaik, Kamal Mitra Chenoy Is India Shining? Answer With Your Vote Why this Pamphlet? When tens of crores of public money (in all likelihood several times over) is spent on advertisement campaigns to market a brand called India, and that too on the eve of general elections, it is important to take a critical look at the whole exercise. According to media analysts, the ???India Shinning??? campaign launched by the Government of India is one of the biggest advertisement campaigns in Indian television history. Between December 2003 and January 2004 ???Brand Shinning India??? was advertised 9,472 times, next only to the mosquito repellant brand ???All Out??? that was aired 10, 392 times. In the print media, in the first fortnight of January 2004 ???Brand Shinning India??? ranked fourth amongst the top brands. In terms of insertions in newspapers as many as 392 insertions were made in over 450 newspapers. This campaign seems to be founded on the notorious Goebbelsian maxim (Goebbels was Hitler??s propaganda minister during the World War II): ???If you repeat a lie a thousand times, it becomes a truth??. What takes the cake in this cynical exercise is that vast amounts of tax payers?? money were first spent on putting up hoardings across National Highways proclaiming that the ???golden quadrilateral project?? linking the four metros was a kind of personal gift to the Indian people from the Prime Minister Shri Atal Bihari Vajpayee. When the Election Commission ruled that this was a partisan display and needed to be called off, lakhs more of taxpayer??s money is now being used to literally ???cover up??? the original folly. One positive, although unintended, by-product of this campaign is that it helps to focus attention on the basic issues. While such issues determine the direction of the economy and affect the lives and living conditions of the vast masses of our people, they are accorded low priority during the election campaigns. The local issues and caste and religion considerations usually dominate the scene. In this backdrop, analyzing the India Shinning campaign becomes very important even as a part of the election discourse. A few of us with some experience in administration, industry, academics and journalism have done just that. We have expressed ourselves in order to make ourselves understood by an ordinary fellow citizen. We have tried to be as objective as possible Whose India is Shining? When the media is given hundreds of crores of rupees in advertising revenue, they will ensure that everyone sees, hears and reads about an India that is shining. But the question is: Can they make you feel that India is shinning? Mahatma Gandhi said: ???Even God dare not come before a hungry man except as bread.??? Can India shine when, according to the Food and Agriculture Organization of the United Nations (FAO), more than 20 crore Indians are undernourished i.e. every fifth Indian is undernourished. We need, therefore, to ask for whom is India shining? Just take a look at the facts below and maybe you can figure out the answer. Consumption level: For 20% of the urban population, consumption increased by 30 % between 1997 and 2002. For 80 % of the rural population it actually declined in the same period. Per capita food grain availability was 174.3 kg in 1997-8. The per capita food-grain availability declined to 157.7 kg in 2002-03. This abysmally low level was last seen during the early years of Second World War, which included the years of the terrible Bengal famine. (In the year 1999-2000, the calorie intake of nearly 77% of rural population was already below the nutritional norms fixed for defining poverty line.) Price of rice: In the fair price shops, even for ordinary people who are just above poverty line, i.e. people who are otherwise poor but not recognized as falling below the official poverty line, the price is Rs. 10.87/Kg. But the price at which government allowed exports of rice to presumably richer countries is much less viz. Rs. 5.45/ kg. The irony is that in the drought affected districts of Andhra Pradesh, the fair price shops sell rice at a price higher than the export price: i.e. at Rs. 6.4 /kg to our own people falling below the official poverty line. And this, in a state where a political party came to power on the slogan of ??? Rice at Rs. 2 /kg!??? Malnutrition: Nine out of 10 pregnant women are malnourished. So are fifty percent of all girls below the age of five. According to the ??? Food Security Atlas??? prepared by the M.S. Swaminathan Research Foundation, India has the largest number of poor and malnourished children, women and men in the world. Graduates unemployed: In 1999-2000 their number was 2.25 million; in 2003-04, their number reached about 5 million. Human Development Index Ranking (according to UNDP HD Report): In the comity of 162 nations, India??s rank of 115 in 2001 dropped to a miserable 124 out of 173 nations in 2002; she slided further down to 127th rank out of a total of 175 nations in 2003. (India is behind El Salvador, Guatemala and Botswana, the poorest countries in Latin America and Africa) Annual Household income: According to data released by the National Council for Applied Economic Research (NCAER) in 2002, India had 180.7 million households of average size of a little over five (poorer households have a higher average size). Of these households: a) Roughly one third (32.8% or 59.3 million) households had an annual income of less than Rs. 22,500; Another two-fifth, (40% or 72.2 million) households had income between Rs. 22,501- 45,000; b) Of the remaining, a little over a quarter of the total households, (27.2% or 49.2 million households), about a half (13% or 23.5 million) had incomes ranging between Rs. 45,001-70,000; c) A little over a quarter (7.5% or 13.3 million) in the range of Rs. 70,001-96,000; and the remaining, only a little less than a quarter (6.7% or 12.1 million) households earned above Rs. 96,000 per annum. It is this 6.7 % of the total Indian households who are ??? feeling good???. A miniscule minority from amongst this privileged category have monthly incomes running into lakhs and crores of rupees; they play the stock markets; they are fast integrating with the rich world outside; they would rather blot out the reality of India from their mental screen. And that is what the India Shining campaign seeks to do. Typically, the last salary of Dhirubhai Ambani from Reliance Industry alone was Rs. 9 Crores per annum. Its ratio to the income of a poor farmer of Kalahandi stood at 30,000: 1, i.e., Dhirubhai earned at least 30,000 times more than the farmer in Kalahandi! And yet there is a political party that believes that ???the poor are being pampered ??. Their thinking is in line with the slogan coined by the satirist Jaspal Bhatti: ???Har garib ka ek hi nara, sensex uncha rahai hamara??? (every poor man has only one slogan, may the sensex soar high). For it, what is visible is only the ???shining?? gains that a miniscule minority of speculators (Indians, non ??Indians alike!) take from playing the stock market. The riddle of Hunger and Overflowing stocks and the Shining India??s ???solution??. The continuously falling per capita food grain availability and widespread hunger were accompanied by massive build up of food grain stocks with FCI, reaching a cumulative total of 63.1 million tonnes by the end of July 2002. The stocks mounted because the vast masses of the hungry and malnourished poor had no money to buy the food-grains. These very stocks could have been used to equip the poor with purchasing power by launching massive ???food-for??work??? programmes and other poverty alleviation schemes. Instead, between June 2002 and November 2003, FCI exported 17 million tonnes of food grains at subsidized prices, prices even lower than those at which food-grains were being made available to our own poor people. Such huge exports were made possible by depriving our people of basic minimum food intake. Lately huge quantities have also been disposed off through sales in the open market in favour of private traders at subsidized rates. The total subsidy bill amounts to a whopping! Rs.19, 500 ??23,000 crores. Does Rural India matter ? The majority of the population of India lives in the rural areas and their main occupation is agriculture. But what is being done for them? Every single gain made by them since independence is being reversed. Let us see how this government??s policies are affecting the three most vital requirements of agriculture: credit, power and seeds. Credit: A vast network of rural banking was created systematically over the years with the commencement of planned development. The norms set for priority lending enabled the farmers to get credit on easy terms. Now with revised income recognition norms and the nationalized banks having to compete to show profits, more and more rural branches are being closed down. The banks have been told, in effect, that loans to the elite for sending their children abroad for higher education or for re-furnishing their houses can not take lower priority than a loan to a needy farmer buying a buffalo! And it is anybody??s guess what a smart banker would do to boost the profits of his bank, particularly as the ???creditworthiness??? of the borrower is an important factor in his decision making. The number of branches at rural centres declined from 35,329 as on 31st March 1994 to 32.481 as on 31st March 2002, indicating closure of 2,848 branches and opening of 7,253 new branches in semi-urban, urban and metro centres. Agricultural credit as on end-March 2002 accounted for only 9.8 % of the total outstanding credit of scheduled commercial banks which is almost half the stipulated level of net bank credit. Agricultural lending is now even lower by 22.43 % than outstanding credit of ???personal loans?? for high value consumption items like cars and other white and luxury goods. About 45 % of banks?? borrowers are from rural centres, but they account for only 13.4 % of the outstanding loans of rural centres, whereas metro centres account for 54 % of banks?? overall lending business. The crumbling of rural credit structure which has forced the farmers to usurious moneylenders and middlemen has already brought about disastrous consequences. Of course, other contributory factors have also played their role in this. Thus the policy of public procurement of major agricultural produce such as major cereals has been substantially dismantled. Public investment in irrigation, research and development has declined. Big companies (Hindustan Lever Ltd., Rallies, Pepsi, Nijjar, McDonalds, Ace) are being encouraged to penetrate the rural areas in the name of contract farming and dictate to farmers the terms of credit, seeds to be used, quantity and quality of produce and the price of the produce. Above all, our agriculture, where small and marginal peasants predominate, which is largely rain-fed and which was protected from the notoriously volatile world market, is now being suddenly integrated with the world agriculture trade. The upshot is that the rural indebtedness has assumed unprecedented proportions. It has claimed thousands of farmers?? lives. This has had no parallel even in the colonial history of India. The small and medium farmers could not pay back the debts that they had incurred at exorbitant interest rates. Andhra Pradesh tops the list but farmers?? suicides have been continuously reported from Karnataka, Maharashtra, Tamil Nadu, Gujarat, Rajasthan, Orissa and even Punjab. The total number runs into more than 10 thousand. More than 500 farmers committed suicide, when pests ravaged cotton in Warangal district, Andhra Pradesh in 1997-98. More than 2000 farmers committed suicide out of indebtedness in Anantapur ?? another district of Andhra Pradesh. In Karnataka, Davangere district has reported the highest number of suicides, 30, since April 2003; Mandya district, Karnataka's sugar bowl and the heartland of the Cauvery irrigation network, comes next with 22 suicides; 14 suicides by farmers were reported from Haveri district, which comes under a belt of assured rainfall. According to The Tribune more than 3000 committed suicide in Punjab in one year. Power and fuel For the first time in independent India, the new Electricity Bill has, by law, drawn a sharp distinction between rural and urban areas for purposes of power supply. The rural areas are to be served by NGOs, panchayats and franchisees and the urban areas, by world-class private companies. The law also requires that in, due course, all subsidies and cross-subsidies should be done away with. The power supply to agriculture is currently cross-subsidized (i.e. higher tariffs for industrial and domestic users make it possible to supply electricity to agriculture at low or nil tariff) to the extent of Rs. 27,085 crores per annum. It does not require acute intelligence to understand that once this level of cross-subsidy is gone and the power supply is managed by franchisees etc. on purely commercial lines, the rural areas, in effect, will have to go without any power. Several questions need to be asked: a) Will the cost of canal irrigation be also increased to the level of tube well irrigation? b) If yes, will agriculture survive in India? c) Then what happens to millions of farmers? d) If this subsidy, which is chickenfeed compared to the astronomical level of subsidies prevalent in USA, EU, Japan and other advanced countries, is withdrawn, how will our farmers compete with the highly subsidized farmers of the West? The Government refuses to answer any of these questions and merely gives slogans like ???Electricity for All??? by some future date, when they will not be there to be held to account. To make the matters worse, critical fuels for rural area like diesel and kerosene have been deregulated and their price are being determined by the market, that is to say, by the profitability calculations of the big oil companies. Which in plain language means, prices will only move upwards and rapidly. Price of diesel determines the cost of irrigation as well as transport of agricultural produce in large parts of the country. Price of kerosene determines the quality of life for vast masses of the poor for whom kerosene is the only source of domestic fuel as well as lighting. These prices have already increased manifold in recent years. Diesel prices have gone up by 91% between 1999 and 2001 and estimates based on the Consumer Price Index show a 145% hike in kerosene prices over 2000-01, which fell marginally in the next year only to rise by 21.3% in 2002-03. Seeds The use of high yielding varieties of seeds was a critical technological input for the Green Revolution. Public research institutions, the National Seed Corporation, State-supported agriculture universities, seed multiplication farms and extension programmes, all played a crucial role in the process. In recent years, the state support is being withdrawn or reduced. As a policy, the role of big seed companies is being encouraged. Under the TRIPS regulations of WTO, the multinational seed companies have emerged as powerful agents proceeding to take complete control over Indian seed industry. The multi -national corporations (MNCs) are not only becoming monopolies but also bringing in technologies like genetically modified seeds that have not yet been tested for their impact on the gene pool in India and nutritional value and health hazards. Using the patent rules, farmers?? rights to exchange seeds with other farmers will be restricted; technologies like terminator technology will ensure that after one crop, there will be no seed germination. Hybrid seeds with seed specific nutrients and pest management and tissue culture based plant varieties are being supplied by MNCs at prices beyond the reach of poor farmers. Farmers, however, are not free to not buy these seeds. [See box below] The changeover from a state controlled regime to a market regime dominated by mega-size international players has played havoc with the lives of small and medium farmers. Hegemony of Monsanto Seed Company For farmers in Wardha, hybrid cottonseeds, available at Punjab Rao Deshmukh Agricultural University cost Rs. 300 to Rs. 430 per bag. The Mahyco-Monsanto variety of Bt. Cotton seeds cost Rs.1600 per bag. Even with reduced expenditure on pesticides, this means an outlay Rs. 3600 per acre as against the earlier outlay of Rs. 1800 per acre. Farmers were told that other varieties of seeds would be supplied only when they also bought Monsanto seeds. Some were told that if they did not buy Monsanto seeds, their credit lines would be blocked. In short government was ready to push Mahyco-Monsanto hybrids at all costs. Growth rates, Unemployment and ???Videshi???Mindset Growth rates: Nothing to crow about Let us look at the claims being made by the government about unprecedented, high Growth rates per se. (The data given below is from the article ???Mediocre Report Card on Economy??? by C. Rammanohar Reddy ?? The Hindu 17.03.04). Period GDP GDP- Agriculture GDP- Industry Merchandise Exports Invisibles Exports 1992-93/ 1997-98 (Congress/UDF) 6.6 3.4 8.2 13.1 18.9 1998-99/ 2003-04 (BJP/NDA) 5.3 1.9 5.4 10 11.1 Source: (i) GDP growth rates based on CSO data of output at factor cost, constant prices; Exports on RBI payment statistics. (ii) 2003-04: GDP are advance estimates, Exports based on six months RBI data. The performance of the Indian economy has, in fact, deteriorated under the BJP-NDA government. GDP growth has been slower, industry and agriculture have done much more poorly during the past six years and so too have exports of goods. The biggest surprise is that even gross receipts in invisibles ?? which this Government loses no opportunity to flaunt as one of its remarkable achievements ?? have registered a noticeably slower pace of increase in 1998-2004. The comparison does not change if we exclude 1998-99 from the analysis, or if we measure growth rates differently. Growth and Unemployment Between 1983-1994/94, GDP grew at an annual rate of 5.2% whilst employment growth was nearly half that rate. However, in the period between 1993/94 to 1999/00, though GDP grew faster at 6.7% employment growth fell steeply to one sixth the rate of GDP. This indicates that we are moving on a jobless growth axis. In the rural areas, the unemployment rate increased from 5.6 % in 1993/94 to 7.2 % in 1999/00 while in urban areas it increased from 7.2% to 7.7 % in the corresponding period. A much steeper increase in agricultural unemployment is a matter of grave concern because agriculture which served as the cushion absorbing the additions to labour force, does not seem to be capable of doing so any more. As the urban sector itself is facing increasing unemployment, where will the growing ranks of unemployed in agriculture/rural sector go? Further, the number of persons who are self -employed has come down from 54.8% to 52.9% in the same period while casualisation has increased from 32% to 33.2 %. Only 13.9% of the workers are in the regular salary category. The unorganised sector marked by large scale underemployment, harsh and trying working conditions and by and large bereft of any employment security contributes up to 92% of employment. The overall situation, which has assumed crisis! proportions, is endangering the viability of our society and polity. Development: Whose Vision is it ? The question to ask is: Does a higher level of output measured by market criteria, (which is what all the talk of GDP growth is about), automatically imply better life for the people? Can we accept development without equity or growth without job creation? Let us illustrate the point. Golf courses and amusement parks are being recommended as very desirable economic activities since they have a high rate of return for the investors and create economic activities like tourism. In and around Mumbai there are 24 amusement and water parks using 50 billion liters of water a day for entertainment purposes. In Rajasthan several water parks and golf courses are being planned. One golf course requires 1.8 to 2.3 million liters of water daily. This would be enough for 100,000 water- starved villagers for the whole summer season. Should we still go in for golf courses? And all this is being planned/done in the face of the stark reality that 20 crores of our people have no access to potable water. The Information Technology (IT) sector is virtually being projected as a panacea for solving the unemployment problem. All kinds of tax concessions and other facilities are being extended to the IT sector. The maximum potential for employment in this sector by 2008 is projected by the official representative body of this industry at between 2 to 3 million jobs, although the current level is around half a million. Contrast this with the reality of around 40 million strong unemployed labour force in the country (which itself is a conservative estimate), and up to 210 million largely underemployed persons whose ranks are swelling and not reducing. Clearly, there is much hype about the impact of this sector on the basic problems of the economy. And this sector seems to be exercising disproportionate influence on the decision -making processes. Why is such a lopsided view being taken? Why is the welfare and well being of the vast masses of people at a discount? And why are the goals of growth and development pursued in complete isolation of their impact on the people? Let us recount some instances of who is currently providing the ???Vision??? for the Nation. It is an American consultancy firm McKinsey that gives ???the Vision 2020?? for Andhra Pradesh and not Mr. Chandrababu Naidu. A sum of Rs. 306 crores was paid to consultants to advise on how to reform the electricity sector of Orissa. Out of this Rs. 306 crores, only Rs. 1,17,000 or 0.038 percent went to an Indian consultancy organisation ?? the Xavier Institute of Management, Bhubhaneshwar, the rest went to foreign consultants from Europe or North America. The story repeats in different spheres, including the policy making at the highest echelons. The various organs of the Indian State (and media) seem to have been reduced to mere hands that execute, not the heads that originate ideas and programmes. Whilst the slogan is ???Swadeshi??? the thought process is entirely ???Videshi???! Selling the Family Jewels Common sense, if not business expertise, will suggest that one gets rid of loss- making units and keeps profitable one. Another principle that is obvious is that if an asset earning income is sold, then another asset capable of earning a similar amount should be created or acquired. Believe it or not, what this government is doing is exactly the opposite. And what is worse, it is claiming it as a great achievement. Whilst the most profitable and super profit generating companies have been sold, nothing has been done to either revive or dispose of the loss- making assets. The government motto seems to be: ???Privatization of profits and Nationalization of losses??. And the money earned by selling the family jewels is being squandered away to meet revenue deficits. This is treachery to the preceding generations and a crime against the future generations. Not a single new asset has been created, nor has there been any modernization and up-gradation of public sector enterprises. Neither has there been retirement of public debt. Indeed, the gains of a reduction in debt:GDP ratio witnessed in the first half of the nineties have been completely reversed thereafter. The debt:GDP ratio which stood at 55.31% in 1990/91 had declined to 49% in 1996/97 but has now climbed back to the level of 55.36% in 2001/02. The proceeds of the sale of the public sector units have been treated like any other revenue of government. The access to easy money generated by selling of national assets has contributed to the environment where austerity is no longer in fashion, where attempts to curb useless consumption expenditure are at a discount and where the socially desirable option of raising resources through taxing the rich and the resourceful is easily given up. The situation is reflected in growing revenue deficits and declining tax: GDP ratio over the past few years. All these indicate delinquency in financial management. What are the types of companies that are being sold out as a priority? These are companies dealing with natural resources ?? Aluminum - BALCO, Zinc ?? HZL. The sale of NALCO would have proceeded apace but for the resistance put up by the people. Government attempted privatisation of the Indian Oil Corporation, but the Supreme Court ruling stalled their plan. The next priority is public services like communications followed by public services like electricity. The government sold 45 % of its stakes in the VSNL to the Tatas for a sum of Rs. 2,591 crores even when VSNL had cash reserves of more than Rs. 3,000 crores at the time of disinvestment. The Tatas paid less than the cash reserves of VSNL; moreover, the Rs.2,591 crores that they spent in acquiring VSNL were actually loaned by government owned financial institutions and banks. The first step that the new Tata Management took was to siphon off Rs.1, 200 crores out of VSNL for another Tata company viz. Tata Telecom. The sale of VSNL, IPCL etc. was justified made on the basis of a strategic partner being able to bring greater efficiency to the enterprise. Thus by purchasing 26 % of the equity, the management control was obtained by big private parties. The justification given for this was that the sale was governed by a shareholders agreement and the interests of the Government as the majority shareholder were well protected. But within a few months, the shareholding of the Government was sold off through a public offer in case of IPCL. By adopting this route, very vital, profitable and critical public sector units are being handed over to select private monopolies. Modern foods and ITDC were sold as ongoing companies and not as land, plant and machinery and other immovable assets. Modern foods and ITDC had prime properties in metropolitan and other important cities where if a factory or hotel was sold as just land and building, more money would have been fetched. The Lodhi hotel in the heart of Delhi was sold in a similar fashion and the new buyers have demolished the building and are rebuilding the hotel. The same is the story with most of the other public sector hotels sold off. More blatant and brazen is what happened with the Centaur Hotel in Mumbai. A few months after it was sold to a private party, that buyer sold it off to another party and made a clean profit of Rs. 30 crores. The criticism that this deal generated found its vindication in the report of no less an authority than the Comptroller and Auditor General (CAG) himself. But the Minister arrogantly dismissed CAG??s objections, saying that CAG??s calculations were ???idiotic??.! This is the track record and ground reality - a sharp contrast with government??s solemn announcement in the Parliament that the policy of disinvestment is aimed at: - Modernization and upgradation of Public Sector Enterprises; Creation of new assets; Generation of employment; and Retiring of public debt. Not a single objective has been attempted, much less achieved. Any further comment is superfluous. Foreign Exchange Reserves of more than a US $100 billion: Whose money is it, where is it and what is it doing? Government is boasting that over 100 billion dollars of reserves have accumulated in its kitty. Let us see examine the merit of the claim. True, the forex reserves have been accumulating over the last few years; the pace of accumulation has accelerated recently. If a country exports goods and services more than it imports, if its receipts abroad exceed its outward payments, it will earn surplus on its external account which it can use for stepping up domestic investment. In that situation, there will be no large accumulation of reserves, as the surplus would have been used up in buying investment equipment and technology from abroad. If reserves accumulate fast, as they have been doing, it should be a matter of concern, not gratification. Because that implies that either the surplus on external account is of such a nature that it can not be transformed into additional investment in the economy; or the economy itself is stagnating and there is no additional demand for investment; or, the government is constrained to maintain high reserves for policy reasons such as discouraging rapid appreciation of the rupee and/or maintaining confidence of the foreign investors, particularly, short- term investors and speculators, in the capital markets. In fact, all these factors are at work in our economy. The investment to GDP ratio is a good indication of a growing economy. This ratio has, in fact, declined to 24 percent recently which shows that the economy is not on a trajectory of rapid and sustained growth. While the reserves have risen, so has the pool of volatile foreign capital parked in the country. Thus, the cumulative net figure for NRI deposits and portfolio investment flows by end November 2003 was $ 62.8 billion, i.e., nearly 2/3 of the reserves. The volatile foreign capital, i.e., inflows brought in by foreign investors for essentially speculative/arbitrage purposes in the capital markets or inflows like deposits from non-resident Indians, tend to flow out at short notice depending on the ???confidence level???, a highly subjective perception, notoriously fickle and often guided by a ???herd mentality???. These ???inflows??? can easily and rapidly turn into ???outflows???. Such capital can not be, by definition, invested in infrastructure or building productive capacity. Worse s! till, in order that they do not so ???flow out??? and create a foreign exchange crisis of the South ??East Asian variety, the government is obliged to maintain very liberal external financial policies. In other words, the foreign financial investors (not the social and economic priorities of the country) call the tune as far as the government policies are concerned. So large reserves are maintained to facilitate maintenance of a liberal external financial policy environment; and the liberal financial policy environment adds to reserves of this type. It becomes a phenomenon feeding on itself, with little relevance to real needs of the economy at large. The large reserves generate upward pressure on the exchange rate of the rupee that can affect the exports adversely. To avoid which, the government is constrained to mop up foreign exchange in large quantities that further adds to reserves. If the reserves are not helping the economy at large, whom are they benefiting? Clearly, the large reserves enable maintenance of a liberal trade and exchange regime that is what we have been witnessing for some years. A handful of the rich can import what they wish, including all the luxuries. They can make foreign tours at will. They can send their children (who fail to get admission to any worthwhile institutions of higher education in the country) abroad where they can buy ??? foreign degrees??? with ???foreign??? money. And now they can legally keep up to twelve lakh rupees in a foreign bank account. Of course, in the name of their companies and businesses, they can even acquire real estate abroad. Only recently, our finance minister exhorted the Indian business community to invest abroad! Obviously, in his thinking, the need of foreign countries is greater than our own, when it comes to investment! In order to maintain the confidence of foreign investors and speculators in the capital markets, it becomes necessary to invest large amounts of these reserves in American and European banks, in the US treasury papers, at rates of interest far lower than the returns that are earned by foreign investors and speculators who bring in the money into in the Indian capital markets! Thus countries like India building big forex reserves, in fact, contribute, at considerable financial and economic cost to themselves, to solving the problem of the external account deficit of the United States. It is the United States of America that is shinning with our money! Not too long ago the South East Asian ???tigers??? followed similar policies. And we have seen with what disastrous results. The government that so far they have avoided such a disaster is taking credit. But the inexorable logic of the process spares none. And a crisis in external finance does not always come with a long prior warning. Even the pound sterling was brought to its knees by speculators in foreign exchange markets not too long ago. In sum, the phenomenon of large foreign exchange reserves and all that it implies is matter of a grave concern, not a thing to be euphoric about. Can we keep India together? Any form of economic development of a nation is possible only if there is an atmosphere of harmony and goodwill. First the nation must remain together; only then can there be any form of economic development or progress. Therefore this question ???Can we keep India together???? is the most vital question. India is a land of almost every religion on earth, dozens of languages and hundreds of dialects. There is only one way to keep this land together and free of violence and civil war, and that is by ensuring balanced and equitable economic growth, social justice and communal and social harmony. Let us look at the track record on these counts. Unbalanced and Inequitable Growth Out of the 15 States (Jharkhand, Uttaranchal and Chattisgarh are here being counted as part of Bihar, U.P. and M.P.) which together account for over 95 % of the population, there is an advanced group of eight (Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab, Tamil Nadu) with 42 % of the country??s population favoured with 67 % of all investment proposals, domestic and foreign. The backward group of seven states (Assam, Bihar, Uttar Pradesh, Madhya Pradesh, Orissa, Rajasthan, West Bengal) with 54 % of the population has 28 % of investment proposals. Between the richest three States (Maharashtra, Punjab, Haryana) and the poorest three (Bihar, Orissa, Assam) divergences have increased. Average per capita income of the latter group, which was 43 % of that of the former group in 1980/81, came down to 27% by 1995/96. The Gini coefficient (a statistical measure of disparity: the higher its value, the higher is the divergence) for inter-State inequality was 0.1! 6 in 1986/87 and it rose to 0.23 in 1997/98, showing that rich states were getting richer and the poor, poorer. The two most populous States (UP, Bihar) with over a quarter of the country??s population have lagged further behind while the two fastest growing States (Maharashtra, Gujarat) have shown much better than average performances. Recently we have also witnessed the regional tensions leading to violent eruptions. The trigger was provided by the rampant unemployment prevailing in the heartland of populous India. Biharis seeking to participate in the process for recruitment to low paid menial jobs in Indian Railways were hounded out both in Assam and in Maharashtra. In Assam events took a more sinister turn: anti-Bihari riots erupted leading to killings of scores of Biharis who had settled in Assam for generations. It is a straw in the evil wind that is already blowing in the wake of the kind of economic policies that are being pursued. Inciting Communal conflict Let us see where we stand in regard to communal harmony. The facts speak for themselves. There has been communal violence and riots in every year since the NDA government led by the BJP came to power in 1999. In 1999, there were 52 riots in which 43 people were killed and 248 injured. In 2000, there were 24 riots in which 91 people were killed and 165 injured. In 2001, there were 27 riots in which 56 were killed and 158 injured. In 2002, 27 riots that took place were utterly overshadowed by the terrible pogrom in Gujarat that killed an estimated total of over 2000, with several thousands more injured and around 140,000 people displaced. In 2003, there were 67 riots in which 58 people were killed and 611 injured. In most of these riots the Sangh Pariwar organisations i.e. RSS, VHP, Bajrang Dal and BJP were involved. No effective action has been taken to punish those guilty of the Gujarat pogrom. A lot was said by those in high places to rationalize, if not condone, what happe! ned in Gujarat. Not only that, the chief minister of that state was publicly lauded as one of the best chief ministers by the Deputy Prime Minister and Home minister of the country. Gross failure on the Social front In regard to social sector, the Citizens Social Charter recently prepared under the aegis of the Council for Social Development, has provided a powerful critique which is summarized below: Half of the people in the country live in poverty and the majority even does not get the minimum wages required for bare survival. Very little progress has been made in effectively reaching out to the most vulnerable and marginalised groups ?? the children, and the homeless, the landless, the disadvantaged castes, classes and social religious groups and those physically and mentally challenged. The government has miserably failed in taking adequate measures towards enabling all its citizens to exercise the entitlements established by the Constitution and as interpreted by the Courts, covering life and livelihood, health and education, food and nutrition, shelter, land and water and other common property resources, security and information. Measures to ensure these entitlements have often been diluted in the name of macro-economic stability and development, strategies linked with liberalization and globalization and under the pressure of international financial institutions and multinational corporations. The government has also failed to protect the land ownership, land rights and the security of the agriculture base of the dalits, adivasis and backward classes. The government has encouraged policies and practices for the corporatisation of agriculture holdings, conversion of agriculture land for non-agricultural purposes and alienation of the land holdings of the tribal communities. The government has failed to uphold the Constitutional principle of equal worth of all citizens and safeguard the plural and secular character of the Indian Society. Communities and groups that are weak and vulnerable owing to caste, tribe, class, religion etc, have seen their rights trampled by various forms of social injustice and exploitation. There have been increasing instances, sometimes with the active connivance of the State, of violence against minorities, dalits, backward castes and tribals and adivasi communities. The failure of the government to ensure education to every citizen has denied knowledge and opportunity to millions of people and undermined national potential and productivity. The government has failed to ensure that all children have equal access to learning opportunities and services throughout their childhood years with quality and substance guaranteed by a set of common standards. The government has followed the double standard of pretending to be universalizing education rights while limiting the poorest children to sub-standard non-formal schemes that deny equal access to learning and knowledge. The government has failed to uphold the national pledge of mobilizing and committing essential resources to fund education on the scale and standard required. The government??s failure to restore and strengthen the common school system, provide adequate resources to discharge its responsibilities for ensuring right to education as enshrined in the Constitution and encouraging, on the ground of paucity of resources at the disposal of the State, parallel streams which are inferior and discriminatory have introduced stark inequities and grave distortions in the education system. Confining the right to education under the 86th Constitutional amendment to the age group 6 to 14 will deprive the youngest child the full opportunity for taking the first steps towards its development and will force the older child prematurely into adult roles. It will in a sense curb the right of the child to learning throughout childhood. The health situation in the country is depressing, with primary health care of acceptable quality remaining outside the reach of the majority of the people, with gross inequity in the provision of health services and with the continuing scourge of diseases like malaria, tuberculosis, polio, which have been conquered in most parts of the world. This is reflected in the high rate of infant mortality in India ?? 70 per thousand as compared to 7 in high income countries and 39 in medium income countries; high maternal mortality rate at 440 per 100,000 live births as compared to 60 in Sri Lanka and around 46 in Thailand and Malaysia; and in the low percentage of births attended by trained health personnel which was 35 in India as compared to 99 in high income countries and 52 in middle income countries. In South East Asia it ranged from 56 to 96, and even in Zimbabwe the percentage was 84. Post Script We shall feel well rewarded if this pamphlet can convince even a small fraction of our fellow citizens that in carrying out its Shinning India propaganda blitzkrieg, the Government is guilty of misleading the people and cynically making them pay for the spin. Notes: We are grateful to a multiplicity of sources from which the facts and figures mentioned in the pamphlet have been obtained. These include the following: q Various articles/papers written by P. Sainath, Jaya Mehta, C.P. Chandrashekhar, Asghar Ali Engineer, Utsa Patnaik, C. Rangarajan, and D.K. Srivastava, Kannan Srinivasan q UNDP Human Development Reports q NCAER data q Planning Commission??s Report of Special Group on Targeting Ten Million Employment Opportunities Per Year q Social Charter prepared under the aegis of Council for Social Development, M.S. Swaminathan Research Foundation q Economic and Political Weekly, Tribune, The HinduIndiatimes Email now powered by APIC Advantage. Help! 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