Introducing India

India is a semi-feudal, semi-colonial country which means that its economy is not a capitalist economy. Distorted growth has postponed the emergence of a national economy with division of labour on a national scale. About seventy to seventy five per cent of the population is engaged in agriculture, which is predominently semi-feudal. The so-called organised sector of the Indian working class accounts for only eight per cent of the total working population, which is only about three per cent of the total population. The unorganised sector covering mainly agriculture, household industry, trade etc. accounts for ninty per cent of the unorganised sector, where agriculture alone accounts for seventy five per cent. Of the eight per cent organised sector, the industrial sector including the manufacturing, mining, electricity and gas account only for 39 per cent. Ninety per cent of the manufacturing concerns employ less than twenty persons and about sixty per cent of such concerns are located in rural areas.

According to the 1991 census, 300 million constitute the working population, out of which only 27 million belong to the organised sector. Thus, the organised working class movement represents a small minority. This section, therefore, is not only not able to launch a struggle against the wage-labour system, but also finds it hard to even retain the economic gains already achieved through past struggles.

Imperialism sustains the present semi-colonial, semi-feudal conditions of the Indian society and, therefore, transformation of the present social structure is a necessary condition for total freedom from imperialsim. The bourgeoisie in the classical era of capitalism demolished feudalism and then proceeded to crush the embroyonic proletariat. Aristocracy was destroyed in France and in England it was absorbed into the bourgeoisie. But the Indian bourgeoisie which arrived too late on the scene aligned with feudalism and also aligned with imperialism. Stalin said as early as in 1925, "The fundamental and new features of the conditions of life in colonies like India is not only that national bourgeoisie (i.e. bourgeoisie as a whole) has split up into a revolutionary party and a compromising party, but primarily that the compromising section of this bourgeoisie has already managed, in the main, to strike a deal with imperialism. Fearing revolution more than it fears imperialism, and concerned more about its money-bags than about the interests of its own country, this section of the bourgeoisie, the richest and most influential section, is going over entirely to the camp of the irreconcilable enemies of the revolution, it is forming block with imperialism against the workers and peasants of its own country" (Vol. 7).

This does not mean that a capitalist sector, though weak, does not exist at all. So, India, for that matter any other country in the third world, cannot satisfactorily fit into the framework of a case study on subjects like changes in the composition of the working class, changes between primary, secondary and tertiary sectors, changes in the qualification of the workers, the age and sex of the workers etc. This does not mean that the changes that have been taking place in the advanced capitalist countries are not reflected or affect the small and weak capitalist sector and naturally the consequences on the conditions of the working class.

We have seen that the Indian economy has to broaden segments; the organised and the unorganised; and about 90 percent of the total working force belong to the unorganised sector and a mere less than 10 per cent to the organised sector. The public sector employs about 65 per cent of the total organised section. The annual rate of increase in employment till 1980 has been 3.5 per cent in Public sector and a mere 0.4 per cent in the private sector.

Public sector industries form an important part of the industrial complex in India. A major part of the capital invested in this sector is state capital. There is fusion of foreign finance capital, native monopoly and bureaucratic capital. Thus, on all counts, the so-called public sector industries are at the service of imperialists and their compradors to loot the vast resources of the state and to strengthen their hold on the economy of our country.

The very fact that it was the Indian big bourgeoisie like Birlas and Tatas, which assigned a big role to the public sector to build the infrastructure like Railways, communications etc. which requires massive investements, for the growth of the private sector and for increasing profits. In fact, after the world economic crisis of 1929-30 and the consequences of the Second World War, world capitalism found the need for state intervention and the idea was public sector.

Capitalist nationalisation is different from nationalisation in a socialist state. A semi-colonial, semi-feudal India is no exception. Capitalist nationalisation of the expenditure and stabilisation and expansion of the capitalist concerns.

Having laid down the infrastructure like transport, communications, power etc. and also certain key industries like steel, coal, machine tools etc., with the resources collected from the people, the Indian bourgeoisie is no more interested in the industrial front of the public sector. At the same time they do not mind the financial institutions pour into their coffers the resources collected from various sources. Now, the comprador big-bourgeois, big landlord class, being subservient to imperialsim, are offering this sector too to imperialists and their compradors in India resulting in unfettered entry and expansion of foreign banks in India; Privatisation in essence means handing over the properties of the Public Sector to private capital.

In India, major sections of the present monopoly bourgeoisie were managing agents of foreign goods up to the transfer of power in 1947 and in the early period after ....Indian capitalists mainly were off-shoots of traditional merchantile and usurious communities and not products of free competition. On the otherhand, foreign monopolies were mainly interested in exporting capital and not goods. For the Indian bourgeoisie this was one way for resource mobilisation. At the same time, for capital mobilisation for national level ventures they had to resort to social mobilisation on national scale and therefore the inevitable role of the state. Most corporate Companies effectively control the organisation with less than 5 per cent share. The bureaucrat financial institutions invest in equity shares and hold ranging from 25 to 60 per cent of the capital. Thus with less than 5 per cent and in certain case with just one per cent, they claim hereditary rights of ownership.

In India, there is not only a fusion of finance (bank) capital and productive capital, but also a fusion of private capital and bureaucrat monopoly capital. The Indian industries were not born out of the struggle against either to old mode of production or foreign exploitation or amongst themselves in an atmosphere of free competition. This is the inbuilt weakness of Indian capitalism.

In the context of this inherent weakness, the developments of capitalism in India was bound to be distorted. A major feature of this distortion is the fact that unlike in the Western countries Indian captialism possessed a monopoly character almost from the very inception - a monopolistic development from above i.e. directly under the auspices of imperialism and the state.

The most fundamental role of bureaucratic finance capital in India is that of concentration and centralisation of capital. By mobilising savings from the public it centralises capital and presents withdrawal and erosion of capital - usually in the non-profitable units. It also enables monopolisation of capital. By siphoning surplus from monopoly sector to monopoly sector it fosters the development of monopoly capital in India. The Indian capitalism being underdeveloped as it is, lacking internal dynamism and resources for growth is being artificially fostered by the state through the bureaucratic finance capital. The most significant role played by the bureaucratic finance capital is financing and promoting private sector industrial development. Another important function of finance capital is that of providing export-credit. Loans from the imperialist finance capital constitutes quite a considerable portion in the bureaucrat finance capital in India. The bureaucrat finance capital function as a conduit for imperialist finance capital which controls Indian economy. In creating a market for foreign monopolists and in making their technology and capital goods availabe for Indian economy. In creating a market for foreign monopolists and in making their technology and capital goods available for Indian monopolists it raises foreign currency resources to finance the foreign currency requirement of the latter for imports. In this process it also acts as an agent of the imperialist financial capital. Thus it makes not only individual monopolists but the whole of bureaucratic-monopoly capital of India comprador of the imperialist finance capital. The acceptance and implementation of the IMF conditionalities bear testimony to this.

By the end of 1970 the stagnation in Indian economy assurmed its full shape and industrial growth, whatever, came to a stagnation point. The domestic market had exhausted over years. Monopoly exploitation and pauperisation of the masses offered no prospect for industrial growth. In 1979-80 economy suffered a serious setback. It was in such a situation that the Indian monopoly bourgeoisie which has been keeping an eye on the export market decided to give a new lease of life to the economy and to bring about a major shift in the strategy towards modernisation for an export led growth in the economy. It was in this context that the government approached: the IMF for a 5 billion dollar loan which was granted with a set of conditions. In accordance with these conditions and the above mentioned strategy, a new industrial policy resolution was declared in 1982.

This strategy suits the interests of imperialists who want to relocate some of their labour intensive industries to certain third world countries. Moreover, they want to transfer some intermediate technology to "relatively developed" third world countries through joint ventures. To create market for their high technology capital goods they want to export them to certain countries like India which can absorb them and to balance the terms of trade and to buy those goods cheap. Thus they are effecting a structural change in the relationship between them and third world countries and trying to further integrate their economies with imperialist economy via industrialising countries" like South Korea, Taiwan, Hongkong and Singapore.

May 1998