Report of the workshop
on “20 Years of Reform in India”
PRAXIS, Bangalore and Indian Social Institute, Bangalore
organized a three days workshop from 27th to 29th July on
“20 Years of Reform in India”. The
workshop tried to evaluate the performance of the Neo Liberal policies that
India had been following since 1990.
Prof. John Itty gave an inaugural speech spelling out the
tenets of ‘Neo Liberal Programme’. He pointed
out that the programme of Privatization, liberalization and globalization was
basically meant for the developed countries like United States of America,
United Kingdom and European countries to find entry into India for investment
and a market. It is meant to take
advantage of cheap labour in India to make super profit and exploit natural
resources and mineral wealth of the country.
Even the financial capital managed to get entry into India to overcome
their economic stagnation.
There was a brief recount of Indian economy from 1950 to
1990, pre-reform era. The significant
fact of the pre-reform era was that there was a socialist nuance to the
economy. Immediately after independence
India took up the challenge of eradication of poverty, production of more food
and industrialization. Indian state was
loud in its opposition to imperialism, feudalism and monopoly capitalism. India
followed a path of five year planning for development. This gave the state a major role in
regulating the economy. India was trying
to follow a model of mixed economy with a share for private sector and a share
of public sector. The state assumed a
great responsibility for irradiation of poverty by playing a role in education
and health system, food security through universal PDS. It undertook several rural development
programmes.
The failure of land reform and gradual shift from self
reliance to import dependence landed India in to economic crisis. The total bankruptcy in the balance of
payment forced India to approach IMF for a massive loan. This loan came with a condition to implement
structural adjustment policy dictated by US controlled IMF.
While reviewing the post reform performance of Indian
economy a constant comparison was made between pre reform economy and post
reform economy.
While India has been praised by the world as the second
largest growing economy the performance of the neo-liberal policy has been
dismal.
On the growth front there is no spectacular
performance. Before 1990 India has seen
8% economic growth. By 1970 Indian
economy has seen massive growth in industry that made her the 9th
most industrialized country in the world at that time. Whatever growth in GDP India is boasting of
today is an imbalance growth. We see more growth in the automobile and consumer durable industry. In 2009-10 the average growth was 10.8% . But the automobile and consumer durable had
26% share. This sector cares only for the middle class and upper middle
class. Performance in agriculture has
been dismal it has gone down to 0.7%. The consumer non durable sector grew only
by 1.5%. Agriculture and consumer non
durable caters for the majority of the population of India.
Through privatization and disinvestment policy the
government has handed over most of the public sector units to the private
capital with a half sung song. Many of these units have been profit making and
were called Nav Ratna units.
Private players are given free entry into
education and health sphere. All social
programmes meant for the upliftment of the poor have been systematically decimated. The integrated rural development programmes
which helped the rural poor to acquire income generating assets have been
turned into part of the MGNREGA where the poor receive only wages for 100 days.
Land acquisition for industrial development,
developing SEZs and mining precious minerals by private and multinational
companies has driven away the adivasies, daliths and farmers to rely on casual
employment and pavement dwelling in the urban centres.
The earlier food security through universal
Public Distribution System has been converted into Targeted PDS as a result
many poor have to buy food grains from open market at high price.
Employment looks rosy only for the IT
employees who have capacity to get into higher studies like engineering. Labour legislations have been amended to
ensure industrial peace for the private sector investors to make huge
profits. The blue collar workers have
been deprived of their trade union rights which they earned through long struggle by
sacrificing their lives. Golden hand shake, VRS has succeeded in bringing
huge population into the ranks of unemployed.
Out sourcing by private companies, employing labourers through
contractors and turning the employees into casual labourers has turned the
employment sector into a nightmare.
The Reform that we would like to see is the reform where the
growth should be directly targeted to eradicate poverty. Instead of searching for market in the foreign
developed countries, which have lost their capacity to import, the government
should look at the internal market. If
the rural development and growth in agriculture takes place it will serve as a
massive market. We have to ensure that
land reform is taken up once again. It
will increase the productivity of farm sector.
There will create massive employment and market for industrial
goods. This means the character of the
state has to be changed. It should play
a major role in the economy to regulate the economy -production and
distribution. The myth of Market being a
perfect regulator should be abandoned.