MAKE IN INDIA

MAKE IN INDIA

BY ALEXTUSCANO

The NDA government struggling to amend the Land Acquisition law to ease the process of land acquisition.  Labour reforms are the second step to promote rapid industrialization

COPYCAT SARKAR

      Modi's `Plans'                                                  Truth

1. Industrial Corridor                                   1 Four Corridors started by UPA

2. Invest India                                                2.Started by UPA in 2010

3. Make in India                                            3.Contains features already given in'

               ‘National Manufacturing Policy’

4. Government to Business                           4. Launched by the UPA

    (G2B) Portal                                                  Government in January 2013

0ur Prime Minister Narendra Modi has been very creative in coining new slogans, 'Minimum government and maximum governance', 'swachha Bharat Abhiyan', 'Congress mukt Bharat'.  The latest invention of Modi is the slogan, 'Make in India'.

It is not clear what he really means by 'make in India'.  To the best of my understanding the term 'Make in India' is deliberately kept vague by Modi to prevent him from being caught by his own words.   He can escape from any interpretation of the term.  Is he asking the Indians not to import foreign goods and instead 'make in India'?  In that case he will find himself at home with the 'Swadeshi Jagran Manch' and the RSS who are always clamouring for being swadeshi.  When he is trying to open the doors tall and wide for foreign investments to kick start growth he cannot talk about ‘Swadeshi’.  Hence one should safely understand that by ‘'Make in India’ Modi is inviting foreign capital to manufacture in India.

To invite foreign investments to the country the Modi government is thinking of several measures.

Number one measure is amending the ‘land acquisition law’.  This law was passed under the UPA government with a strong support from the opposition in the parliament.    The industrialists are now crying foul as the land acquisition law is creating difficulties for them to easily acquire land.  To meet this demand of the industrialists Modi sarkar wants to remove the bottle necks in the law, such as ‘consent clause’,  ‘environment clearance’ and ‘Impact assessment’.  One should keep in mind that the BJP, which was in opposition in the previous parliament had contributed a lot in making land acquisition difficult for the industrialists by demanding four times of the market value of land as compensation to the farmer.

The second measure that Modi wants to take is 'labour reform'. Obviously this will help the industries to function with peace and without workers resorting to frequent strikes.  In Rajasthan Vasundhara Raje has already taken the so called, bold step in bringing about labour reforms.

Land owners or wage earners?

Both in pursuit of foreign investment and rapid industrialization, the state is acquiring land of the farmers to establish ‘special economic zones’.  The NDA government is now trying to dilute the Land Acquisition law to ease the process of land acquisition.  In this manner more and more farmers will become landless.  Even the environmental clearance will be put on fast track to build industries on the environmentally sensitive areas.

Often the economists have argued that land acquisition for industrialization will generate employment.  The farmers who lose their land will get employment.  Some even say that employment will give the farmers more income than what they would earn by cultivating their land.

The economists miss a crucial point.  They do not realize that when a farmer loses his land he loses his capital, his address, his identity and his food sovereignty.  The farmers have a stake in their land. By ownership of land they are owner of capital which gives them a guaranteed source of earning livelihood.  Once they lose their land they lose their capital; they become wage labourers; they lose their employment guarantee.  They even lose their citizenship.

As a wage labourer one does not have any stake in the capital owned by the capitalists. They are alienated from the capital and the product of their labour.  They get alienated from the mainstream socio-economic and political life of the society.  Politics for them becomes only voting once in five years.

Once his land is lost he becomes just a landless labourer.  He would not be qualified enough to get good quality employment. Most of the people from farming communities get very poor quality of employment.

The hope of getting employment in exchange of land should also be seen in the light of the scenario in employment in India described by Ashok Kumar Panda.

"With the advent of liberalisation and globalization on the dictates of world capitalism the country has witnessed the marginalisation of a substantial section of the working class whereby jobs of perennial nature in government and industrial establishments are managed by contract labour.  On the pretext of following the new economic policies, political parties of various hues have gone for substitution of regular work force with contract labour.  In the country's premier health institution, the All India Institute of Medical Sciences (AIIMS), thousands of contract labourers are employed in place of workers who are required on a permanent basis.  Contract labourers have no security of tenure and are paid only the minimum wage payable to unskilled labour for doing the work of regular employees, who are paid higher wages."  (Ashok Kumar Panda, Front Line November 14, 2014.)

"Contract labour is exposed to severe exploitation, which is marked by a lack of stability and durability of employment; insecurity of tenure; denial of overtime wage; absence of facilities and amenities; absence of safety devices giving rise to accidents; and denial of employment compensation payable to regular employees in the event of their death or disability.  This has pushed a substantial segment of the marginalised working class to penury and abuse of their human rights while private industries have reaped huge profits and unjust enrichment."  (Ashok Kumar Panda, Front Line November 14, 2014.)

Recently it had been reported that R Com put off 34% of their workers (6000 workers) to boost profitability.  And Microsoft terminated 18000 staff. This is a good indication of how the security of land ownership, employment in farmer's own land and food sovereignty will be bartered for insecure employment in industries.

In recent years our economy has boomed to a great level. But the base of ownership of capital has greatly diminished.  Wealth gap is widening.  For the aspiring middle class wages alone are not enough to prosper.  Merely as wage earners they cannot participate in the wealth they create for their owners.  They would like to have a stake in the capital itself.

Gross  Domestic Product or National Income?  ‘Make in India’ or Make for India?

Modi s main agenda is to kick start growth.  In all interviews conducted by electronic media the neoliberal economists talk about how Modi will succeed in his pursuit for growth.  Opening the doors for foreign investments by increasing the limits of foreign invest from 26% to 49% and 51%  is perceived as the way to go forward. If the foreign investors do bite this bate we will have more investments flowing into the country.  This will lead to what they call GROWTH, growth in 'Gross Domestic Product' (GDP).

We need to have a second look at the concept of ‘growth’ in GDP, particularly when it

happens through foreign investment.

Gross Domestic Production (GDP) is defined as total goods and services produced in a given year within the boundary of a nation. There is no distinction made between goods and services produced by foreign capital invested in the country and those produced by the indigenous or national capital owned by the citizens of the country. GDP includes production by national capital and foreign capital.

Here we must speak about another reality called ‘National Income’.  This is a distinct reality from GDP. 'National Income' is what is produced by the national capital.  ‘National Income’ is the wealth of a particular nation.  ‘National income’ does not include product produced by foreign capital. If an industrialist of a foreign country has invested capital in India the product of their industry belongs to the foreign industrialists and is repatriated to their country of origin.  This will be included in the national income of their country.

Hence  National income is GDP minus production by foreign capital.  If Indian industrialists have invested in other overseas countries their product will be repatriated to India and it will include in the 'national income' of India.  In India National income will be calculated as GDP minus production by foreign investment, plus production carried out by Indian industrialists in foreign countries.

To illustrate this further let us take an example.  American Ford or General Motors have invested in India.  The production done by these companies will be included in the GDP of India.  But it will not be included in the 'National Income' of India. Similarly, India's Tata Motors have invested in Nigeria.  The production carried out by Tata Motors in Nigeria will not be included in the GDP of India, but their production will be calculated in the National income of India.  Ford and General Motors repatriate the proceeds of their production to America and it will not be considered as National Income of

India. Similarly the proceeds of Tata Motors' production will be repatriated to India and therefore it will not be considered as part of the National Income of Nigeria.

National Income is equivalent to income from the production of national capital and Indian capital invested abroad.  Hence it means 'National Income is equal to GDP minus income paid to foreign investors, plus income received from Indian investment abroad.

If foreign investment in India is larger than Indian capital invested abroad (in foreign countries) then we have a situation of imbalance in the inflow and outflow of income.

Therefore we can safely say that GDP is not such an impressive category to evaluate the health of a nation's economy.  It is the 'National Income' that will be the wealth of the nation.  The National Income may be much less than the GDP if there is large scale foreign investment in the country compared to its own investment abroad.

If we evaluate the slogan 'Make in India' what we need to examine is whether 'Make in India' is done by the national capital or foreign capital.  If it is done by foreign capital then it will have to be deducted from GDP to arrive at the National Income figure which would be the national wealth.

Another important issue is the outcome of ‘Make in India’.  If make in India is meant for export then the products of make in India will not cater to the needs of the Indian consumers.   If Make in India is done by the foreign capital and for foreign market, then India becomes only a production venue; that will only be polluting Indian environment.

‘Make in India’ will give employment for sure but that will be done at some cost of land acquisition and labour reform.  The so called enabling governance of Modi will acquire land from the farmers and transform them into landless labourers.  Whether these land owners, who would be turned into landless labourers, will be employed in these foreign manufacturing industries, which will employ most sophisticated and automatic technology is a big question.  Then there will be labour reforms to take away the bargaining power of the working class.

It is in this context we should evaluate Modi s pompous slogan 'Make in India'.

GDP is not such an impressive category to evaluate the health of a nation's economy. It is the `National Income' that will be the wealth of the nation