• Demonstration in front of Parliament declares war against capitalist reforms and puts forward the people's agenda

• Facts behind the figures in Chidambaram’s Budget 2004-05:
  Redistributing incomes in favour of the big capitalists and money lending institutions

• What Really is the Difference?

• A very grave and deep-rooted problem gets national attention

• Are peasant suicides mere statistics?

• Oppose deployment of Indian troops in Iraq!

• Saddam Hussein charged by puppet government in court:
  "The real criminal is Bush! "

• US Supreme Court ruling on Guantanamo concentration camp and withdrawal of immunity request in UN:
  The US imperialist terrorists must be brought to justice!

Demonstration in front of Parliament declares war against capitalist reforms and puts forward the people's agenda

While the bourgeois media is going overboard hailing the Manmohan Singh Government and its maiden budget, activists of the working class, peasantry, women and youth are expressing their dissatisfaction and their determination to continue the struggle for a real change.

A militant demonstration marched from the Mandi House circle in New Delhi to the Parliament on July 6, to greet the budget session of Parliament with their declaration of struggle. Over 24 organisations came together to prepare this action. They adopted a joint ‘Declaration of Struggle of the People of India’. We have reproduced this important document in this issue (see box).

The organisations that participated in this joint demonstration included the All India Federation of Trade Unions, All India People’s Resistance Forum, Ankur, Bhagat Singh Disha Manch, Bhartiya Kisaan Union (Haryana), Bigul Mazdoor Dasta, Chelmsford Club Employees Union, Fruit Juice Plant (Rasika) Employees Union, General Kamgaar Union, Hind Naujawan Ekta Sabha, Indian Council of Trade Unions, Jagori, Jan Pratirodh Manch, Lok Raj Sangathan, Mazdoor Ekta Committee, Modern Food Industries Employees Union, National Alliance of Peoples Movements (Delhi), Nepali Jan Adhikaar Suraksha Sangathan (India), People’s Union for Democratic Rights, Pragatisheel Mazdoor Trade Union, Purogami Mahila Sangathan, Samajwadi Jan Parishad, Sandhaan and Yuva Bharat.

Slogans painted on bright red banners and colourful bold placards included the following:

• Workers and peasants declare – Hindostan belongs to us!
• Land, water and forest wealth – they all belong to us!
• Food, shelter, drinking water, electric power, education and health – all are our fundamental birthright!
• We will punish the murderers of 1984 and Gujarat!
• Unite against state terrorism and all the black laws!
• Step up the struggle to defeat the liberalisation, privatisation and globalisation program of the bourgeoisie!
• Fight to reverse the privatisation of Modern Foods, BALCO and other enterprises!
• Reject the alliance with US and Israel!

Speeches at the concluding rally, held on Parliament Street, emphasized that the aim of the people’s struggle is not the replacement of one government of exploiters by another. They declared that the aim of the struggle is to achieve a fundamental, and not cosmetic, change in the orientation of the Indian economy and the nature of political power. The Declaration was read out at the rally and received with great enthusiasm by everyone present.

Mazdoor Ekta Lehar / People’s Voice hails this joint action of the fighting forces as an important milestone in the movement for lifting India out of its present crisis. It shows the determination of the working class, peasantry and other oppressed masses to continue to fight for the people’s agenda, and not fall for the deceptive tactics of the bourgeoisie. It marks an important stage in the development of political unity among various revolutionary forces, around one common program of the toilers, tillers and all the oppressed.

Back to Table of Contents

Facts behind the figures in Chidambaram’s Budget 2004-05:

Redistributing incomes in favour of the big capitalists and money lending institutions

The Budget of the Congress-led UPA Government for 2004-05 was presented to Parliament by Finance Minister Chidambaram on July 8. In his budget speech, the Finance Minister noted that the people’s verdict in the elections is a "vote for change". He said that the people want a "change in national priorities" and in the "focus of governance". However, a careful analysis of the budget data, along with the estimates of the social product and its distribution among the different social classes – shows that there is no change in the class character of the Central Government and the focus of its role in the economy. It shows that the Central Government’s role remains focused on re-distributing incomes – from the poor and middle strata to the rich exploiters – in a manner no different from that of previous governments.

Social Product and its Distribution

The social product, or Gross Domestic Product (GDP), equals the new value added in the Indian economy during the course of one year. It is the result of the combined labour of the workers, peasants and all the working people. The relations under which this labour is performed determines the distribution of the value added.

In the case of India, the relations of production are based on private capitalist ownership of the principal means of social production, alongside state capitalist ownership, individual petty production and the remnants of feudal property and common property resources in the villages. As a result of these relations of production, and the high degree of monopoly in the structure of ownership of capital, the distribution of the social product is extremely uneven among the different classes of Indian society.

At one pole, the big monopoly capitalists and financial institutions, and the large urban and rural landowners, pocket thousands of crores of rupees as profits, interest and rent. The combined claims of these property owners on the social product are classified as ‘property income’ in the National Accounts Statistics. At the other pole is the income earned by those who have no property except their own labour power, which they sell to earn a wage or salary. This is classified as ‘compensation of employees’, or more simply, labour income. In between these two poles, are those who own a small amount of capital and work in their own family farm or petty enterprise. The majority of peasants fall in this category, as do the urban ‘own account’ enterprises and small unregistered shops and businesses of various kinds. The incomes earned by these middle strata are called ‘mixed income of the self-employed’.

The distribution of the social product between the three major classes, as defined above, can be derived from the official National Accounts Statistics that are published every year. The broad picture can be summarized as follows:

• The owners of capital, who make up less than 5% of the Indian population, pocket about 37% of the social product as profits, interest and rent;

• The working class, consisting of all wage and salary earners and constituting about 50% of the population, receives 33% of the social product as labour income; and

• The ‘self employed’ who make up about 45% of the population earn the remaining 30% of the social product.

It is to be noted that the 37% share pocketed as property income is an underestimate, as it excludes the considerable amount of unaccounted or ‘black’ incomes appropriated by the bourgeoisie.

This is the position before the government intervenes with its taxes and non-tax levies and its interest payments, as well as its investments, subsidies and expenditures on public services. The income is already distributed unevenly, in favour of the bourgeoisie, before the government redistributes the incomes further to favour the most powerful propertied interests.

Where the revenues really come from

Government revenue is the claim of the government on the annual social product. These claims take the form of union excise duty, customs duty, sales tax, personal income tax, corporate income tax, other taxes, levies and user charges. The Budget shows the break-up of central government revenue into these different tax instruments. The Budget figures show how the government plans to collect its revenues, but they do not show from whom they will be collected.

Those with regular salary incomes pay personal income tax, and everyone is made to pay indirect taxes on almost everything they purchase for their daily consumption needs. The price of the goods they purchase includes an element of union excise duty, additional cess on this excise, an element of state sales tax, and so on. The bulk of tax revenue is collected in this indirect way, without the people knowing how much is being squeezed from them. Direct taxes collected from the capitalist corporations (corporate income tax) account for less than 20% of the gross revenue collected by the Central Government.

The rate of extraction of tax and non-tax levies – that is, what proportion of their incomes the different classes will be made to pay as government revenue – is not presented to the public. It appears neither in the Budget documents nor in the Economic Survey. It has to be estimated by combining the Budget figures with the estimates of ‘factor incomes’ available in the National Accounts Statistics.

Chart 1 shows the projected distribution of the social product in 2004-05, and the projected extraction of central tax and non-tax revenue from each of the three income earning classes. The rate of taxation is the lowest for the propertied class, which is expected to pay only 9% of their accounted incomes. Once their unaccounted incomes are added, the effective rate of taxation will be even lower. The rate of extraction from the incomes of the peasants and other ‘self-employed’ is projected at 11%. Wage and salary incomes are the most highly taxed. The working class will be made to pay 18% of its income as central government revenue in 2004-05.

The new tax proposals contained in Chidambaram’s budget are not designed to change this skewed structure of tax incidence among the different classes. The ‘education cess’ of 2%, which is to be added on to all direct and indirect taxes, will fall on all classes without changing the incidence structure. Bringing new services under the net and increasing the rate of the service tax will intensify the rate of extraction from the middle strata. While various sops have been given to different business groups, no relief has been offered to those who depend on wage and salary income. Thus, the toiling masses will continue to be taxed more intensely than the propertied class.

Where the Rupee really goes

The budget figures show that the largest claim on the government’s revenue is by those institutions that lend money to the government – the Indian and international banks, insurance companies and other financial institutions, including the World Bank and the Asian Development Bank. According to the Finance Minister’s projections, total revenues to be collected by the Central Government in 2004-05 will amount to Rs. 393,000 crore, of which Rs. 130,000 crore will be paid out as interest payments and Rs. 200,000 crore as principal repayment. Thus, the total debt service payments are projected to consume 84% of gross revenue collected by the Central Government.

Expenditure on ‘defence’ is projected to rise to Rs. 77,000 crore, more than 28% higher than in 2003-04. This steep increase reflects the continued pursuit of the arms race, and the cause of modernising India’s war machine. The total outgo on account of debt servicing and ‘defence’ will together consume more than 100% of the total revenue.

Given that debt servicing and defence are considered as ‘commitments’ that have to be honoured at any cost, these two items really claim the first charge on government revenue; and together, these two claims will exhaust the entire revenue. For all other claims, including the claims of the people for school education, health services, safe drinking water, affordable food supply through the Public Distribution System, roads, irrigation and varied forms of support that the peasants need, the Central Government will have to raise fresh loans. The budget figures show that the central government expects to raise almost as much through new borrowing as it will raise in the form of tax and non-tax revenues.

The official ‘Budget at a Glance’ presents a misleading picture of where the Rupee goes – a picture that shows only 23 paise out of each rupee going towards debt servicing. This is because the official version shows only interest payments, while leaving out the repayment of principal, which is netted out of the new borrowing. Thus, instead of showing Rs. 336,000 crore of new borrowing as an inflow, and Rs. 328,000 crore of debt servicing as an outflow, the charts presented in the official ‘Budget at a Glance’ shows only Rs. 129,500 crore of interest as outflow, and ‘net borrowing’ of Rs. 137,000 crore as inflow. The aim of such a presentation is to hide the real extent to which the government’s finances are dominated by the money lending institutions.

The true picture of where the Rupee comes from and where it goes is shown in Chart 2. It can be seen that the working class and middle strata of society pay more to the government than they receive in the form of public services, whereas the property owners receive more than they pay to the government. The bulk of debt servicing and arms purchase expenditures flow directly into the pockets of the bourgeoisie, as does a major share of the benefits of subsidies and economic services.

Conclusion

The combined effect of the Central Government’s role is to make the toilers and tillers pay to enrich the exploiting minority. It is to rob the poor and the middle strata to fatten the rich. This is the reality, which every successive Finance Minister tries to hide from public view.

As long as the Union of India remains under the clutches of finance capital and the warmongering interests, budgets will not and cannot look any different, except for minor and marginal adjustments. Under these conditions, even the concept of "fiscal responsibility" actually turns out to be nothing more than the commitment to honour the claims of the money lending institutions and give them first charge on public funds. And the often repeated call to "cut the deficit" becomes, in effect, a call to cut back on essential services that the people need, but which are being financed through fresh borrowing, because revenues are eaten up by debt servicing and the war machine.

Back to Table of Contents

What Really is the Difference?

The bourgeois media has hailed Chidambaram’s Budget for 2004-05 as a "budget with a difference". A comparison of the budget estimates he presented on July 8, with the estimates presented by former Finance Minister Jaswant Singh in February prior to the elections, is shown in the table below.

Chidambaram’s budget shows lower projected receipts from privatisation, almost matched by higher projected receipts from recovery of loans. Other than this, the items for which Chidambaram’s forecasts have deviated from Jaswant Singh’s significantly, i.e., by more than 5%, are: (i) gross revenue, (ii) defence expenditure and (iii) plan expenditure. The allocation for plan expenditure includes a lump-sum provision of Rs. 10,000 crore towards implementing the promises included in the Common Minimum Programme of the UPA Government.

Chidambaram hopes to raise Rs. 22,000 crore more from tax and non-tax levies, and spend this mainly for arms purchases and for beginning to implement some CMP promises. The higher revenue forecast is based on optimistic assumptions, such as the continuation of economic growth at over 8% and improved compliance by tax payers. What will happen if the additional revenue actually collected during 2004-05 falls short of the over ambitious target? Either the plans for additional purchase of arms for the war machine must be cut back. Or the implementation of the CMP will have to wait. All indications are that the latter will be the option preferred by the Finance Minister.

Back to Table of Contents

A very grave and deep-rooted problem gets national attention

On June 24, the Andhra Pradesh assembly passed the Andhra Pradesh Agriculture Debt (Moratorium) Bill 2004, initiated by the recently elected government of Andhra Pradesh. By this law, private moneylenders cannot demand repayment of loans outstanding from farmers for the next six months. This law has come in the wake of hundreds of suicides by farmers over the last two or more years. A week following this announcement, the Prime Minister visited the families of farmers who had committed suicide and announced more concessions and relief.

It has been widely reported that one of the immediate reasons for farmers committing suicides has been the harassment by the moneylenders for repayment of loans. Borrowing from the banking system accounts for only a minor portion of the farmers’ borrowings, and the money owed to private moneylenders accounts for over 75% of the total debts of farmers in the state. With successive years of drought dogging the farmers of AP, some of them have accumulated debts running into lakhs and their creditors are many. The Chief Minister also announced an ex-gratia payment of Rs.1 lakh, as part of the relief package, to the families of those who committed suicide. While this measure cannot reverse the deaths, it may provide a breather to bereaved families who are being hounded by the creditors, and it is likely to have some impact on those who might have contemplated suicide.

But there are seroius limitations to the moratorium. In announcing the moratorium for six months, the AP government hopes that the farmers would be in a position to repay their loans after the on-going kharif season. But even if it is a successful season this summer, there is no guarantee that the farmer will be able to meet the moneylender’s demand. More disturbing is the fact that in the face of deep rooted and widespread crisis, neither the compensation for the dead nor the protection from moneylenders addresses the fundamental issue of the extreme insecurity and deprivation faced by the country’s food producers.

A large section of the peasantry who are poor and marginal farmers have chronically faced lack of cheap credit, assured irrigation and quality inputs. In recent decades, under the mantra of economic reforms, the government has withdrawn its earlier proclaimed policy that the nationalised banks must allocate a percentage of their total lending for rural credit at concessional rates. Likewise, the state has withdrawn from providing inputs such as seeds and pesticides. State seed farms have given way to private seed corporations, national and international. On the front of irrigation, farmers have been left to fend for themselves. With more intensive farming and depletion of ground water, even small and marginal farmers are compelled to dig their own borewells. In fact, in several districts of AP, this has been the ruin of the farmers – no water has been found after expending huge sums on the digging of wells. To illustrate, there are reports that in some districts like Nalgonda, farmers have sunk several tubewells (an average of two to every human being in one village!) on their land, but in vain, since no water has been found even at a depth of more than 300 feet. When this is the situation they are faced with, the question needs to be posed – is it at all sustainable for them to borrow from the banks at 12% or whatever is the commercial lending rate? Any credit policy must take into account the interest rates at which peasants can afford to borrow.

Agriculture is a crucial economic activity and those who produce food and essential supplies cannot be left to the mercy of a fickle monsoon and moneylenders. It is the responsibility of the state to ensure that this activity is economically sustainable for the producers and for the country as a whole. In drought years, the government must step in to provide the necessary irrigation; this will require that sustainable irrigation and other soil and groundwater conservation works are carried out. The government must all ensure that crop insurance, quality seeds and other inputs at affordable prices are available. These measures must be prioritised over the claims of finance capital, fertiliser companies and seed corporations. Not a single farmer must feel pressured to take his own life because he cannot provide for himself and his family.

Back to Table of Contents

Are peasant suicides mere statistics?

Dear Editor,

This is regarding the measures announced by Central and AP governments concerning the distressed peasantry. I want to point out that the contrast between the treatment given to rich industrialists and poor peasants is very telling indeed.

The big industrialists and capitalists in our country, who constitute only a small minority of the population, have the government of the day at their beck and call. The success of every major activity of the government is judged from their viewpoint alone, whether it is the national budget or the foreign policy that the government adopts. In fact, before the budget, highly publicized meetings are held with the ‘captains of industry’, when their wish lists are ceremoniously dictated to the government. Even a casual perusal of the newspapers will tell one that it is their reaction which determines whether the government can pass the budget in the way it was proposed, or whether it will be obliged to make amendments in its proposals to accommodate them. "Sensex reacts negatively" is a headline the governments dread like the plague.

Our peasants not only constitute a major section of the population, they are in fact the ones who toil hard to grow food for all. Yet this is the section which has been left by the state and central to face the furies of nature all on its own. This is the section for whom all inputs are being made more expensive every passing year. This is the section that is being left at the mercy of market forces with the result that, when good crops are produced, they have to sell their produce at throwaway prices. When the crops are not good, they lose their lands to the moneylenders and become paupers. Earlier, a good king was one who provided irrigation facilities to his subject. Today, governments couldn’t care less about irrigation, and peasants are forced to sink at huge expense tubewells that inevitably become dry in due course. The poor peasant cannot tug at the Sensex and even his suicide is shrugged off as just another statistic!

It is another matter that the measures announced by the AP and Central governments after so many suicides have taken place will only provide temporary relief at best. The very fact that the rich minority can make the governments toe its line by a mere twitch of the stock markets, while the toiling masses have to commit suicides en masse even to make the governments notice their plight, is itself a condemnation of the system. What kind of political system is this, in which one of the most populous sections of society, and moreover one whose occupation is to provide food for all, has to resort to mass suicides just to make governments take notice of their plight? Why, it is none other than the so-called "democracy"!!

Yours sincerely,
Arvind Kalsekar
Wardha

Back to Table of Contents

Oppose deployment of Indian troops in Iraq!

The Editor

Sir,

The visit of Mr. Richard Armitage, the Deputy Secretary of State of the United States to Delhi in the first half of July 2004 leaves many questions unanswered. There have been conflicting reports in the media of the nature of the visit, and about whether or not there has been a request for Indian troops to be deployed in Iraq, now that there is a supposed UN mandate for Iraq's 'return to sovereignty'. What is most vexing of course is the complete lack of transparency in the policies of the UPA Government in this matter.

Earlier, the Minister for External Affairs, Mr. Natwar Singh, had claimed that since the situation has now changed, the Government is prepared to consider deployment. Soon afterwards, in the wake of the strong protest of Communist allies, he went back on his position. Enquiring minds, therefore, will want to know what the future holds for the Indian policy on this matter.

It has been mentioned in the international media that the NDA Government had enjoyed very strong ties with the US while the UPA Government that is headed by the Congress has the baggage of having been Soviet supporters in the Cold War era. Most of this is rank speculation. The fact of the matter is that the UPA Government is one that is guided by sheer pragmatism, and will seek to chart out a course that is driven by both contention as well as collusion with US imperialism. It will be acting not on the basis of principle but only of convenience. There is the distinct possibility of significant disaster for the people of Iraq and for the Indian Armed Forces. All progressive-minded sections of society should oppose any kind of deployment of Indian troops in Iraq as long as it stays under occupation.

Sincerely,
A.Narayan, Bangalore

Back to Table of Contents

Saddam Hussein charged by puppet government in court:

"The real criminal is Bush! "

On July 1, 2004, Saddam Hussein, deposed leader of Iraq, was produced in a court set up by the puppet Iraqi government and charged with various crimes. The entire exercise was clearly another attempt to legitimise the wholly unjust and illegal invasion and occupation of Iraq and the puppet regime being installed there by the Anglo-American imperialists.

The Anglo-American imperialists had absolutely no justification to invade Iraq last year other than their own self interest. Before blatantly violating the sovereignty of Iraq, they attempted to get legitimacy for their proposed invasion by leveling all kinds of false accusations against the former Iraqi government. The main accusation was the existence of weapons of mass destruction that allegedly posed a threat to the peace of the world. Events have shown that it is actually the US imperialists and their allies who possess and use such weapons, and it is they who are the greatest threat to peace. Tony Blair has publicly admitted on July 6 that such weapons may never be found in Iraq. Justice demands that Bush and Blair be tried and severely punished for misleading people into a war in which tens of thousands have been killed.

The crimes of which Saddam Hussein have been accused of now include the Anfal campaign against Kurds in the late 1980s, using poisonous gas against the Kurds in Halabja in1988, the invasion of Kuwait in 1990, and so on. These are all serious matters indeed. All these were matters of state policy, which the Iraqi people have a right to discuss and judge. However, it is the Iraqi people alone who can legitimately hold their government to account for such issues. It is only they who had the legitimate right to remove Saddam Hussein from power if they wanted and install another leadership or even another political system. However, the invasion and occupation, as well as the current process of establishing a puppet regime and legitimising it, are all about depriving the Iraqi people of their sovereign rights. The trial now being conducted has as its primary aim furthering this unjust process in the interests of the imperialists, not delivering justice to the Iraqi people.

The Anglo-American imperialists had no business to be in Iraq in the first place, let alone incarcerate anyone or put anyone on trial there. The Iraqi people have been making this abundantly clear even before the invasion and every day thereafter, but the occupiers are staying put. The kind of political and economic system that Iraq should have ought to be a matter solely for the Iraqi people to decide. Instead, the occupiers have installed a regime entirely of their own choice, which will set in place a system best suited to further the imperialists' interests. It is this grave injustice which must be rectified first of all, if real justice is to be done to the Iraqi people. The occupiers must be made to quit Iraq forthwith. The Anglo-American chieftains Bush and Blair must be the first ones to be tried and punished for the innumerable crimes they have committed and continue to commit.

The manner in which the so-called trial is being conducted is also very telling. The only reporters in court were from American organisations. Saddam Hussein was not allowed access to lawyers, and the judge even banned the sound of his voice on television. No wonder, since according to the judge himself, "the coalition authority asked me to hold this trial". Whatever wrongs he may have done, Saddam Hussein was not incorrect in asserting that "this is all theatre by Bush to help him with his election campaign. The real criminal is Bush!"

Back to Table of Contents

US Supreme Court ruling on Guantanamo concentration camp and withdrawal of immunity request in UN:

The US imperialist terrorists must be brought to justice!

By a margin of six to three, at the end of June 2004, the US Supreme Court decided that the hundreds of prisoners being held at Guantanamo Bay did have a legal right to challenge their captivity. Thus the arguments being used by the US imperialists to deny the human rights of the people incarcerated in Guantanamo have been shown to be untenable even by their own laws. It is only fair that the US imperialists now be brought to justice for, among other things, the illegal and inhuman treatment of those held in Guantanamo.

The US imperialists, who have proved to be the most gross violators of human rights that mankind has had to endure, have been consistently attempting to get immunity for their personnel from the legal systems of all countries. For example, they vigorously opposed the setting up of the International Criminal Court (ICC) which opened in August 2002 in The Hague (Netherlands) as the first permanent forum for trying people charged with genocide and other crimes against humanity. The Bush administration had threatened European nations with dire consequences if the European Union refused the United States' demand to keep Americans out of the reach of the ICC. The American Service members' Protection Act (ASPA) revoked military assistance to countries that have ratified the ICC treaty unless they concluded a separate bilateral agreement with the United States by July 1, 2003, agreeing never to hand over US personnel to the ICC.

Meanwhile, the manner in which Iraqi people have been tortured and humiliated by the US-led forces has made even more enemies for the US. Two years ago, the UN Security Council was made to pass a resolution granting immunity to members of US armed forces participating in UN ‘peacekeeping’ missions. Last year, three countries -- France, Germany and Syria -- abstained from the vote which extended the immunity by another year. The exemption ran out at the end of June 2004, and the US wanted the Security Council to renew it. But the exposure of the manner in which US forces have behaved in Iraq has made many more members of the UN Security Council oppose this move, and the US has had to drop its plans to get a resolution passed in its favour again.

In recent times, imperialist military forces led by the US have committed genocide and other very serious crimes. These include bombings of unarmed civilians in Vietnam, in the Gulf War, in the Balkans, Iraq and Afghanistan. They also include the rape and murder of people, as well as the killing and torture of prisoners of war and their incarceration in inhuman conditions. All those who cherish human values abhor such crimes. The US imperialist terrorists must be prosecuted and punished for the crimes they have committed against humanity everywhere!

Back to Table of Contents