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Home > 2022 > Diamond Jubilee or Rusted Freedom? (Part II) | Kobad Ghandy

Mainstream, VOL LX No 36 New Delhi, August 27, 2022

Diamond Jubilee or Rusted Freedom? (Part II) | Kobad Ghandy

Friday 26 August 2022, by Kobad Ghandy

This is the second half and concluding part of the article by the same name. In the first section which appeared in the Mainstream, August 20, 2022 we dealt with the: State of the Country as it exists today; the impact on the people and environment; the impact of two centuries of colonial Rule & the process of Globalisation worldwide. In this concluding section, we shall deal with the impact of Globalisation on India and the Swadeshi Alternative. Here we will also give a call to action

Diamond Jubilee or Rusted Freedom? (Part II)

D: Globalisation: Impact on India

Now let us turn to the impact of these policies in India during this period of globalisation with focus on the depth of foreign penetration and resulting loot. While the three phases of globalisation could be categorised as: first the initiation from say 1990 to about 2005; the second, the Great Recession Period from about 2006 to 2019; and the third the Great Reset period from 2020 0nwards — in this article, for want of space, I will just recount the initiation and the present situation in India, while dealing with this globalisation period. Also the earlier period though dealt with by Suniti Kumar Ghosh I will leave it for another day as it was a continuation of the past, yet not in its most aggressive form compared to the colonial or globalisation period.

Globalization; Phase I : 1990 to 2004 

With the decline of the British as a big power and the US stepping into its place, we witness our country becoming the playground of not only the British but more so the US corporations which began to enter the country in a big way dictating terms.

As mentioned in an earlier book written in 2002 “Globalisation: An attack on India’s Sovereignty”:

The problem with the Indian bourgeoisie was that from its very birth it was the illegitimate child of British imperialism and Indian feudalism/traders. Though large in size it never had a totally independent existence of its own. In this period the existing tie-ups have been not only strengthened but also extended. Not only that, in many cases, they have completely taken over the local company, turning the earlier owners into their managers or sales agents. In existing joint ventures (JVs) they have, in numerous cases, reduced the Indian partner to a minority share with no management control, making these compradors even more dependent on them. Wherever there has been any clash of interests the government has always come out on behalf of the TNCs. An example being the introduction of FDI into the print media, which was opposed by major sections of the media world (and even by the parliamentary committee appointed to study the problem and present a report), yet passed by the cabinet. So, Indian big business got tied ever more tightly to the apron strings of international finance capital, with their spokespersons being one of the strongest protagonists of economic reforms. But, even more servile are the top politicians and bureaucrats. With no independent source of wealth generation (except of course, through looting the treasury) they were the most servile to the imperialists who could be bought for a few dollars. In this period of globalisation they have bowed before the imperialists, particularly the US, even more than what was asked for. To prove their loyalty, they have sabotaged their own constitution, they have crudely altered existing laws, they have given gigantic concessions to TNCs, they have gifted our natural wealth and existing PSUs to them at throw-away prices, and have even mortgaged our land to them in the name of promoting exports. They have opened out, and are handing over to them, not only all industry, finance and commerce, but also mining, forestry, water resources, electric power, agriculture, social sector (health and education), media, and even our genetic wealth. By bowing to WTO stipulations, they have allowed a flood of imports, destroying our huge small-scale sector and even agriculture. They have opened out even defense production to foreign capital. Each day, news comes in, of further capitulation. It is for this reason that, unlike Clive, neither Clinton nor Bush has had the necessity to wield the sword.

Post the colonial period, the really vicious attack on our country began with the globalization era introduced through the Man Mohan Singh economic reforms of 1991. The grounds though were being laid since the depression of 1982 which struck the West irretrievably. Since then, we see a direct link between the rise of Hindutva ideology and the aggressive push of the neo-liberal agenda — first by the Congress then the BJP.

The seeds of economic reform were laid in the mid-1980s itself coming out in the open in 1991 when India went bankrupt and had to mortgage its gold reserves to the IMF. Simultaneous to this we witness first the conscious promotion of the Ramayana in 1984 with the very introduction of the TV in India which resulted in a religious revivalist mania. Immediately after this were the anti-sikh pogroms and the attack on the Golden Temple — probably as a subtle/indirect warning to the Hindus to steer clear of the bhakti movement/tradition. After all Guru Nanak’s tenets were a direct threat to Brahminism. This was followed by the opening of the lock of the Babri Masjid and high calibre promotion of the Babri Masjid — Ram Janmabhoomi issue -first by the Congress, then by the BJP.

 Ironically, immediately after the announcement of the economic reforms Advani launched his rathyatra creating mayhem destruction over the entire country finally resulting in the demolishing of the Babri Masjid. Thereby the rulers craftily diverted from the negative impact of the economic reforms being bulldozed through. The Hindutva pot was kept boiling throughout the next two decades by both BJP and Congress and even most regional parties.This finally burst out into the open in the post 2014 period.

This Hindutva was a cover for fake nationalism/patriotism under which to push the sell-out of our country to the foreign barons in the name of economic reforms; as also an important tool of divide and rule in true British style. It is no coincidence that the rise of Hindutva and economic reforms ran parallelly. Both were made for each other. The real policy was to introduce economic reforms together with the enormous pain it would cause; Hindutva was the poison needed to numb that pain and allow for the smooth implementation of reforms. Ofcourse, Brahminism itself has been a continuous tool of all ruling classes, what was new was its aggressive push in the form of Hindutva. As Brahminism dominates the consciousness of most and particularly the upper caste ruling classes (its transition to Hindutva was a reasonably smooth process); and as it is in essence authoritarian, divisive, oppressive, elitist and inhuman — it has been an important tool to wield by all ruling classes throughout history. And any challenge to it has been ruthlessly suppressed; whether it were the Bhakti saints, most of whom were murdered by the orthodox, or the more recent killings of Dhabolkar, Pansare, Kalburgi and Gauri Lankesh.

Globalisation restructured the economy wherein: the market became dependent on foreign trade; where capital was dependent on foreign investment; where technology became dependent on the hi-tech foreign variety; where finance became dependent of global inputs and speculation; where the stock exchanges index pricing got controlled by international speculators; where commodity prices (including agriculture) was determined by international rates; where even the currency, the rupee, got determined by the dollar and its rate of flow into the country; and where even banking, insurance, savings, were all gradually coming under foreign control

The first step towards so-called globalisation had been taken. With the seed planted in the mid and late 1980s itself, and a gestation period of another decade; it was after the collapse of the Soviet Union in 1989, the Balance of Payments crisis in 1991/92 and the second IMF loan in the same year, that the full-fledged onslaught of ‘globalalisation’ began in India. This, of course, was facilitated by the large structural changes that were taking place in the imperialist economies themselves and the leaps in the info-tech revolution.

It mattered little which party was in power. With the introduction of ‘economic reforms’ there was an urgency to bring in the changes with great speed. Whether it was the Congress(I) government from 1991 to 1996; or the UF government from 1996 to 1998; or the first ever BJP-led government at the Centre — all acted with haste, each trying to outdo the other in the speed of implementing ‘reforms’. Even in the States, regional parties sought to compete in giving concessions to the imperialists to attract foreign capital. Servility to imperialism reached new peaks in this period.

There was hardly any sphere of the economy that was untouched by these ‘economic reforms’, whose single purpose was to allow foreign capital to completely envelope the country. So, for example in January 1997 the government announced major amendments in the FIPB guidelines, which opened the door even wider to foreign capital. According to these new guidelines automatic approval could be given by the RBI (without the necessity of FIPB approval) up to 74% foreign equity in nine categories, including electricity generation and transmission, construction, mining services and the basic metals and alloys industries. It also expanded the list of industries for automatic approval involving foreign equity up to 51% to include 16 more categories covering a mixture of consumer goods, services and metallurgical industries.

Also, the UF government in that year’s budget introduced rules to facilitate foreign capital into the MSMEs. In the same month the govt began the process of opening out the insurance sector to foreign capital by allowing foreign participation in Health insurance.

Next the UF govt, besides the FIPB (Foreign Investment Promotion Board) and FIPC (Foreign Investment Promotion Council) in January 1997 set up the ‘Investment Promotion and Infrastructure Development Cell’ and investment promotion ‘windows’ for specific countries. ‘Focus Germany’ and ‘Focus Japan’, among others were operational for investment promotion activities in collaboration with Assocham, FICCI and CII (associations of the big industrialists). As though these steps were not sufficient the UF government proceeded to make sweeping changes in the financial sector and in trade. It made an important change in the law, which substantially facilitated the TNC takeover of Indian industry. It went by the name — ‘The New Takeover Code’. This was a defacto charter for TNCs to takeover of Indian companies. Camouflaged under the call for good ‘corporate governance’ (meaning good business management) this Takeover Code was passed.

In mid-1997 the UF government released the disastrous Tarapore Committee Report. This report put the year 2000 as the date for making the rupee fully convertible on capital account. Full convertibility would result in the government having absolutely no controls over foreign capital which could worm its way into all spheres of activity (even more than what already existed) impacting exchange rates and export/import as also investment possibilities. The disastrous impact of such a step was evident even from an official RBI report, which said, "It needs to be recognised, however, that an open capital account would not only limit the (monetary) authority’s independence in the conduct of exchange rate policy, but would also expose the economy to international shocks."
Then in the 13-day rule of the first BJP govt in 1998 the only decision they took was to issue counter guarantees for the Enron power plant at Dhabol in Maharashtra which was vigorously being opposed by local peasants.

The day after the Pokhran Nuclear tests (May 11 1998), the then Housing minister, Ram Jethmalani announced the opening up of the housing sector to foreign investments. Three days later the Ministry of Steel and Mines approved the mining license for the US-based mining giant Phelps Dodge for prospecting for Copper and allied minerals in Bihar, and also to set up a 100% subsidiary. Then, with surprising speed on terms extremely favourable to the TNCs, counter-guarantees were granted for three fast-track power projects — the Vizag project of the Hindujas (basically foreign — NRI), the Neyvelli project of the US-based ST-CMS Electric Company and the Bhadravati projects of the Japan-collaborated Nippon Denro Ispat. Further, production-sharing contracts were signed in the oil sector for 18 exploration blocks, 11 of which were with TNCs. The government also cleared as many as 34 proposals, 28 of them with TNCs, for prospecting and exploration of minerals, covering 49,000 sq. kms. in the mineral rich states of Bihar, Gujarat, Maharashtra and Rajasthan.

And last but not least, the ‘Swadeshi’ BJP passed a Videshi budget. It promised to double foreign investments by increasing concessions to the imperialists; it gave big grants to attract NRI investment; it decided to open out much of the insurance sector to foreign investment; it decided on the outright sale of many of the country’s PSUs, by allowing as much as 76% of the share-holding to be sold to private capital and TNCs; it reduced customs duty on crude oil by 5% giving a bonanza of some Rs 1,500 crores ($375 million) per year, to the TNC oil companies.... Earlier, in its new Exim policy it entirely capitulated to WTO pressures by allowing imports on 340 additional items, which were earlier on the restricted list. Finally, it servilely accepted all Suzuki’s demands in the Maruti dispute.

Lastly, as the bomb went up the rupee came down.... in just one month after the explosion the rupee got devalued by as much as 6%. BJP’s servility to foreign interests reached such base levels that Yeshwant Sinha, while presenting the 1999 budget, said he was addressing the international audience. Never before, in these 51 years of independence have such high-level secret dealings between the Indian and US governments taken place as reflected in the talks between Jaswant Singh and Strobe Talbott. In just one year, eight meetings took place, shrouded in secrecy, behind the backs of the entire country. But the fruits of these talks, taking place under the pretext of India’s nuclear explosion, were to be seen in the further capitulation of the BJP, not only regarding its readiness to sign the CTBT, but also more particularly in the economic sphere.

Going under the slogan of "second generation reforms", the second round of the BJP-led government since 1999, took a quantum leap forward in the process of liberalisation, privatisation and ‘globalisation’ of the Indian economy. Quite naturally it won immense praise from the so-called "international community", with the US even waiving some of its earlier imposed economic sanctions. The process of rapid sell-out began from day one of its rule; and continued through the budget and post-budget period. The Clinton visit, in 2000, further catalysed the speed of capitulation to US imperialist interests.

It had been a three-pronged attack on the country’s interests. First, a host of bills, acts, legislations, policies, etc., dictated by the WTO/World Bank/TNCs, were rushed through by the cabinet, which gave an even freer hand to foreign capital to dominate and loot our country. Second, there were scandalous sales of Indian public property (PSUs, etc.) to TNCs and FIIs at throwaway prices; no doubt, for a hefty commission. And third, they encouraged and promoted foreign capital (FDI, FIIs, GDRs, etc.) to take over industry, finance and our natural resources, on a scale not seen before. In addition, in the name of a joint fight against ‘terrorism’, the US was invited not only to partake in Indian security-related matters, but the American intelligence agency, the FBI (Federal Bureau of Investigation) was, for the first time ever, allowed to open an office at Delhi ........ thereby further infringing on the sovereignty of our country. While granting concession after concession to the US, the BJP-led government launched gigantic attacks on its own people — through hikes in diesel rates, electricity and water charges, etc.; massive retrenchments and wage-cuts of workers and employees; reduction in subsidies and welfare measures; reduction in small-savings interest rates by as much as 1%; and increasing neglect of the entire rural sector; combined with brutal attacks on peoples’ struggles.

Never before has such urgency been shown to conform to imperialist dictates. Barely two months after coming to power, in the 1999 winter session of parliament, the cabinet introduced as many as 45 new bills. Of these, eight were directed to meeting WTO (World Trade Organisation) stipulations, while the rest also sought to take the Indian economy deeper into the quagmire of ‘globalisation’.

The Bills rushed through were to conform to the TRIPs (Trade Related Aspects of Intellectual Property Rights) Agreement of the WTO. They were the Patent (Amendment) Bill 1999; the Geographical Indication Bill, 1999; the Trade Marks Bill, 1999; the Design Bill 1999; the Coptright (Amendment) Bill 1999; the Plant Varieties and Farmer’s Rights Protection Bill, 1999 (to facilitate the entry of Monsanto and GM seeds); the Semi-conductor Integrated Circuits Layout Design Bill 1999; etc. Then the govt introduced the IRDA Bill (Insurance Regulation Development Authority) to facilitate corporate/foreign penetration into the lucrative insurance sector.

In just the month of March ’99, starting with the budget itself, there was no sphere of the economy that remained untouched by the foreign hand camouflaged with the BJP’s gloves. Trade, investment, financial services, telecom, patents, insurance, export/import, research and development, television viewing, housing, derivatives (speculation) markets, petroleum deregulation, and facilitating a host of TNC takeovers of even PSUs..... in all these spheres outrageous policy changes were introduced that would allow further domination of the Indian economy by foreign capital.

So, for example, in that budget, US agri-business was encouraged, FDI penetration was further liberalized, 74% equity by FDIs was allowed into the chemicals, pharmaceuticals and fertilizer sector, etc. Soon after that budget the BJP took a number of further steps. The BJP-led government then passed the new patent Bill with undue haste. What is even worse was that in the BJP’s final Patent Bill they did not even introduce certain safeguards allowed by the TRIPS. In this the BJP even went against its own Law Commission report, which called for certain changes in the new bill. A US Trade Annual Report openly stated that a change in the Indian patent regime will mean a yearly gain to its pharmaceutical industries of $500 million (Rs 4,000 crores in today’s terms). There would be a similar gain for their agro-chemical industries.

Next, it went ahead and opened up part of the insurance sector to foreign capital, a step that the earlier two governments tried, but failed to do. Opening up this sector has been on the top of the agenda of the powerful foreign financial institutions. This highly lucrative sector gives access to the imperialists of the vast savings of the Indian people. Opening this sector to foreign capital virtually allows people’s savings to be hijacked by the imperialists. A US trade report says the opening out of insurance in India will benefit US industry to the extent of $25 million (Rs 200 crores in today’s terms) in premium revenue each year. The opening up of insurance is part of a highly dangerous WTO treaty to liberalise global trade in financial services. This humiliating treaty was signed by the caretaker Gujral government in December 1997 and was to come into force from March 1999. The worldwide banking and financial services market is believed to be worth $22 trillion a year and the US has been resorting to much global arm-twisting to get the agreement signed. Yet, only 70 countries signed this. Here too, the then UF government in increasing servility to the US, not only signed this treaty but also a bilateral agreement of liberalisation of financial services that went even beyond that signed by countries like Thailand, Indonesia, Malaysia and Brazil. What the UF initiated, the BJP completed; handing over India’s savings to the wolves of finance capital

Then the revised EXIM (export-import) policy 1997-2002, introduced by the Commerce ministry on March 31, ’99 was the worst example of the extent to which the BJP government was prepared to go in selling out the country’s interests. The opening up of imports goes even beyond the demands of the WTO. And the doles to exporters, which were already high in the previous year, increased phenomenally.

Already, most exports were free from income tax, a large number have no excise duty on them, and in fact many items got huge cash subsidies varying from 10% to 20% on the price-value. The new EXIM policy now widened the number of concessions given for exports. If the total of all these grants, subsidies, incentives, cuts in duties, credit facilities, free trade zones, etc. to exporters are to be calculated it would come to not less than Rs 5,000 crores (in today’s terms Rs.1 lakh crores). Such were the additional gifts to exporters through the new EXIM policy, by a government desperately seeking to cut food subsidies and social welfare schemes.

The extent of government renegacy does not end here. Next, on the EXIM front the WTO had demanded that all countries remove quantitative restrictions on imports by the year 2003. In a highly retrograde step, the government struck an agreement with the US, in the first week of Jan. 2000, to remove all Quantitative Restrictions (QRs) on imports by April 2001 — that is, two years before the date set by the WTO. The removal of QRs has been a major point of contention between India and the other imperialist countries. India then went ahead and struck separate agreements with most countries for removal of QRs by 2003. as stipulated by the WTO. Even worse, this new date became applicable to all countries, and would negate the other independent agreements signed. True to this agreement, in the new EXIM (Export-Import) policy announced on March 31, the government abolished QRs on 714 items. These primarily included products reserved for the small-scale sector and agricultural commodities. This resulted in a flood of cheap imports, which had a disastrous impact on both these sectors. In addition, the government allowed second hand capital goods to be freely imported without any license; and further cut the import duty on capital goods from 10% to 5%. So, in other words, the local capital goods industry was also hit.

Next, while the government spent crores each day, fighting over a barren patch of land on the Siachin Glacier, it then handed over truly key industrial belts to the imperialists and their agents. The new EXIM policy says that all Export Processing Zones (EPZs) in the country will be converted into Free Trade Zones (FTZs) on July 1, ’99. Modelled along the lines of the export zones of the UAE, these zones would dispense with customs regulations, and, as the Financial Express states (April 1, ’99) "treatment of EPZs as outside the country’s territory, have a major bearing on the EXIM policy." As announced in end May 2000 the SEZs would be deemed to be a foreign trade territory and goods produced there would have to be IMPORTED by India if they were to be purchased there. No duties, taxes, laws would apply to companies operating in these areas. Yet these companies could process goods within ‘Indian territory’ (outside the SEZs) without any regulations. Hegde further announced that the usual labour laws would not apply in the FTZs, and units in these zones would be exempt from payment of even corporation tax for a full ten years. In other words, this was de facto foreign territory, set up within India, to exploit our cheap labour and utilise the infrastructure set up at government cost (i.e. tax payers’ expense).

Next, FERA (Foreign Exchange Regulation Act) was changed to FEMA (Foreign Exchange Management Act). The former was to restrict foreign investment the latter was to promote it. Diametrically opposite purposes. Restriction helped the growth of local enterprises, particularly MSMEs, while promotion of foreign investment sought to kill them.

Other Bills both houses of parliament passed were to liberalise mining, which removed restrictions on foreign companies’ participation in prospecting and mining. In the first week of April the Union Cabinet decided on the deregulation of the coal and lignite sectors. Thereby the country’s enormous mineral wealth was opened out for loot by the imperialist powers.

Then, a series of legislations were passed that totally handed over the Information Technology sector to the imperialists. The US had been aggressively demanding, at the WTO, that e-commerce be made tax-free. But even before the WTO took a decision, in mid-June the Indian Government decided not to tax e-commerce transactions. In fact, the central minister, Jaitly, boasted that in the past one year the government had drafted six new legislations, including the new telecom policy, the ISP Act and the TRAI Amendment Ordinance. The new telecom policy itself gifted away as much as Rs 2,300 crores(in today’s terms Rs.40,000 crores), to the telecom companies, all of which were TNC-collaborated.

In the March 2001 budget the concessions continued apace and the March 2002 budget further continued the frantic pace of second generation economic reforms:

First, it announced the full convertibility of all deposit schemes of NRI’s (Non-Resident Indians) in India. In other words the huge NRI deposits, amounting to roughly $8 billion (Rs 40,000 crores), was made part of India’s external debt — where interest and repayment charges would now have to be paid in dollars. Not only that, the budget also permitted NRIs to freely repatriate current earnings in India, such as rent, dividend, interest, etc. in foreign exchange. Second, FIIs (Foreign Institutional Investors) was given free play to take over Indian private banks. The sectoral cap of 24% in FII’s portfolio investment in private banking was removed allowing even 100% foreign equity in Indian private banks. In addition, FIIs were also allowed easier access to Indian companies, and to indulge in derivatives trading on the Indian stock market.

Next, to facilitate the take-over of Indian industry, under the banner of Mergers & Acquisitions (M & A), the Takeover Code was first liberalized in 1990, then again in 1994 and finally completely opened out to the ravages of the TNCs on the recommendations of the Bhagwati Committee.

This was at the governmental/policy level. At the level of the big corporates the interlinking with foreign corporates had already been going on apace. The amended laws only quickened the pace. Generally the two are interlinked - the opening up for foreign investment, while hurting agriculture and indigenous industry (mostly MSMEs), facilitates tie-ups between them and India’s big corporates.

So, for example, the Ambanis, by far the biggest industrial house in the country by then - equivalent to 30% of the profits of the entire private sector and 3% of India’s entire GDP — was a direct product of globalisation. His close links with the US imperialists could well be understood even in those days, by the fact that he was the only Indian invited to Clinton’s high-flying parties, and he was the only business person Clinton spent a few hours with personally, during his visit to India in 2000. As a classic case of our big corporates, his swift growth was due to the enormous concessions and favours bestowed on him by successive governments. In fact when TADA was introduced, one of its first usage was against workers in his Gujarat plant. Though a large percentage of his investments are in Gujarat, he was totally silent on the Modi-massacres there. Though his profits have been gigantic, he barely pays 2% as tax. The line of big politicians at Dhirubhai Ambani’s funeral, including the deputy prime minister, Advani, is an indication of the close ties. Pranab Mukherjee was one of the primary promoters of Dhirubhai at the start when he was Finance Minister in 1982-84.

Of his 18 companies then, Reliance had 7 JVs and 40 technical alliances, many with foreigners and its present shareholding pattern has foreign capital (FIIs, GDRs) of 20%, Indian FIs/ Banks etc. of 20%, Ambani’s own capital of 40% and the public of 20%. At Reliance’s giant refinery and petro-chemical complex at Jamnagar (Gujarat), the turnkey construction of the entire complex had been handed over to the American giant — Bechtel that had 200 of its engineers at the construction site. As for the funding of Rs 9,700 crores refinery, over half, or Rs 5,000 crores, was raised in foreign currency. The tie up with imperialist interests was so deep that a large amount of the equipment continued to be imported; the refinery depended on imported crude and other inputs; and it had a whole range of foreign tie-ups with a number of global giants — technology and licenses for the main refinery process came from UOP of the US; Black and Veatch provided technology for the sulphur recovery facility; Linde for the hydrogen manufacturing facility; John Brown, Unipol for the polypropylene facility; and Foster Wheeler for the cooker

Next the Tatas was at that time the second biggest industrial house in India with a turnover in 2001 of Rs 37,197 crores. It had a huge empire of 84 companies, of which 34 were joint ventures with TNCs. Besides the JVs of the pre-globalisation period, it witnessed a spate of collaborations in the 1990s. In 1989 there was the inauguration of the Tata-Honeywell factory in Pune; then in 1993 it launched the Titan watches, which was a JV with the US’s Titan Timeproducts; in 1994 Tata Engineering formed a JV with the US based Cummins Engine Company Inc.; in 1995 an MoU was signed between the Tata Group and the American International Group USA, for insurance; in the same year Tata Electric tied up with the US’s Liebert Corporation; in 1996 Eureka Forbes and Nilfisk entered into a strategic alliance in cleaning systems; in the same year Tata Industries and Bell Canada International signed up for telecom services in A.P.; again in 1996 Inland International (US) and Tata Steel created a JV, Tata-Ryerson; and finally in 2000 the cellular properties of Tata, Birla and AT&T merged into a major JV in the telecom sector. Besides, the much-hyped indigenous car, Indica, was followed up by a new car, Magna, which was the result of a JV between Telco and Peugot Citron. From the above facts it is clear that the Tatas are fully tied in an intricate web with the TNCs, particularly those from the US. In fact, we have already seen they were direct product of the British, like the Birlas.

The Birlas as a family house were divided into three groups, due to a split in the family. Yet A.V.Birla + B.K.Birla was ranked third in the early 2000s. The largest of the three, of the A.V.Birla group, Kumar Mangalam Birla, went headlong into a large number of tie-ups with foreign capital. In 1996-9 the group had two JVs with Power Gen of the UK to build two 1,000 MW coal fired power plants, the AT&T JV in telecoms (with Tata) and the JV with Capital Group in banking. It had also brought in a large amount of foreign capital by raising shares through the GDR route abroad. In the K.K.Birla group, its flagship company, Zuari Agro Chemicals, was jointly promoted by the Birlas and USX Corporation, USA. Zuari entered into the project consultancy and service sector through a 50:50 JV with the UK based Simon Carves. In the C.K.Birla group, its flagship company, Hindustan Motors, went into collaboration with Mitsubishi Motors Corporation, and also invested in a 50:50 JV with General Motors to produce the Opel Astra in India. Also its Orient Papers & Industries went into a JV with LG Electronics Inc. of the US to manufacture white goods in India.

Then the Mahindras group set up JVs with Ford, Singapore Network Service, McCann Erickson, AVL (Austria) and British telecom. Mahindra is also the chairman of the Indian subsidiary of the TNC, Otis Elevators. For its tractor division it set up a JV with the American tractor major Kace. The group has also signed an agreement with Mitsubishi Motor Corporation and Samcor Manufacturing (a Ford-owned South African company), to make mini vans. In the transport sector, the group has an MoU with Sea Land Services Inc. for a 50:50 JV for the multi-model transport and port infrastructure projects. The group had a Rs 360 crore JV with US-based Owens-Cornings, which would manufacture 30,000 tons of glass fibre reinforcements annually. In power the group had tied up with the Canadian power major, Acres International for the new JV company, Mahindra Acres Consulting Engineers, in which M&M had a 51% stake. In its huge $600 million (in todays terms Rs.4,800 crore) 50:50 JV with Ford, M&M had now virtually sold out the bulk of it shares to Ford.

 The new tie-ups of the Godrej group have been with General Electric, the Pilsbury division of GrandMet, Sara Lee and Photo Me.

In the Thapar Group, its company Crompton Greaves, set up a JV with Maersk Data of Denmark for software development; and had also tied up with Exide Electronics Group to make a range of UPS systems.

Jindal’s Rs 1,000 crore 290 MW captive power plant (at the huge Vijaynagar steel plant) has been set up by Jindal Tractebel Power, a JV with the Belgian firm Tractabel. Also, the oxygen plant of the Corex module, was set up by Jindal Praxair, a JV between Jisco and Praxair of the USA.

The list could go on and on, but besides these local collaborators, there were the very powerful NRI groups based abroad and with dual citizenships. Particularly the Mittals and the Hindujas are massive conglomerates and had, in the 1990s begun to play a major role in Indian industry. These tend to be more pro-imperialist than the imperialists themselves. Mittals made much of his money acting as the hatchet man of Suharto in Indonesia, while Hindujas made much of their money as agents of arms dealers. They are basically mafia, who have powerful links with Indian (and British) politicians. Of the three Mittal brothers, L.N. Mittal has a gigantic steel empire stretching across the globe with the Ispat International Holding Company based in the Netherlands. He was at that time the richest Indian in the world valued by the Forbes listing at $2.2 billion (Rs 1,76,000 crores in today’s terms). Though based abroad he had strong connections with India involving former ICICI chairman, N. Vagul, former SAIL chief, M.R. Nair, and former Hindustan Copper chief Ram Shankar Mishra in his business empire.

The Hindujas, had 20 companies that constituted its Rs 3,225 crore empire in India. Through its vast web of international corporate relationships, the group was expecting to build its turnover to Rs 20,000 crore by 2001. The big expansion of its major company, Ashok Leyland, is a JV with Fiat of Italy; in telecom it is tied up with the Shinawatra Corporation and in power with National Power. Besides, the Hindujas have made enormous money as ‘traders’, acting as agents for TNCs as indicated by the Bofors deal. Ironically Hinduja is the co-promotor of the pharma company Astra Zeneca the company that developed the covishield vaccine and has its patent and has one of Mumbai’s major hospitals.

Besides them, there are other big NRIs like Swaraj Paul. The most notorious ofcourse are the Gupta brothers who relocated to South Africa from UP in 1993. The three brothers Atul, Ajay and Rajesh Gupta are businessmen operating in South Africa with close links to President Jacob Zuma and his family. They initially set up a small computer business before taking large stakes in uranium, gold and coal mines, a luxury game lodge, an engineering company, a newspaper and a 24-hour TV news station. They made billions and have huge estates guarded round-the-clock.

The UK has 40 such Indian origin businessmen in their rich list. There were 14 billionaires of Indian origin in Dubai, 10 in London and 8 in the US. There were five Indian-origin business tycoons on the coveted Forbes Singapore Rich List, of 2017. which had combined assets of about $7.33 billion

A vast pool of cheaply available English-speaking scientists, unquestioning and unlimited source of blood, genes, embryos, etc. and a totally pliant government, had even then turned India into a major centre for such deadly research projects. It was promoted by the government itself, by the setting up of the Human Genome Project, to which vast amounts of public funds were allocated. And as much of the scientific work is technical — i.e. mere recording the computer data of the 32,000 genes, with 1.5 million proteins in each — cheaply available Indian scientists are ideal for the American research institutions.

No sphere of the economy was left untouched, including agriculture. We see a massive influx of cheap imports and steps at dismantling the public distribution system which reached its peak with the current three farm laws.

The damage to Indian agriculture was occurring and will deepen as a result of: (a) a forced opening up of the Indian market to agricultural imports; (b) a further reduction in the already abysmally low investment in agriculture; (c) the wrecking of what little ‘food security’ approach in agricultural production has existed since the seventies, and the dismantling of public sector procurement and price support operations and public distribution. These all comprise the chief aspects of globalisation in Indian agriculture

Let us now look at all these three points separately.

First the Flood Of Imports: Having removed all QRs and reduced tariffs on all agricultural imports as per the dictates of the WTO, the flood of imports severely hit agricultural commodity prices pushing thousands of peasantry to suicide.

It was infact in the late 1990s that the government introduced the notorious Monsanto GM seed, bollworm, in cotton growing which ignited the epidemic of farmers’ suicides, first amongst cotton growers, and then to all other crops.

Dismantling of The PDS The World Bank had time-and-again stated the need for winding up the FCI (Food Corporation of India). Once again, in its report titled, India : Foodgrain Marketing Policies — Reforms to Meet Food Security Needs (August 99), the Bank maintained that "India’s food grain procurement, distribution and buffer-stocking policies have repressed the private food grain marketing, under-cutting its potential contribution to long-term food security."

With the privatisation of procurement and public distribution, the situation was ripe to be handed over to TNCs like Cargill, who have been waiting to swoop down on the country. In 1998 itself Cargill entered in to a 3-year extension procurement service agreement with the Punjab Agri Export Corporation Ltd. (Pagrexco). In consultation with Pagrexco it identified places where new centres could be set up. Also, in cooperation with Pagrexco it planned to set up an integrated flourmill in Punjab on the lines of the sick Noida flourmill bought by Cargill, which later expanded its capacity to 500 tons per day. It has also begun contracting directly with the farmer. Cargill would control seeds and fertilisers, it would provide credit and buy back the entire produce. The contracts stipulate that the farmer cannot sell their produce to anyone else.. Already, in 1999, Cargill India Pvt. Ltd then set up two procurement centres at Sahnewal and Abohar in Punjab, and, in that year procured 10,000 tons of wheat. In the next year it procured 25,000 tonnes of wheat and 20,000 tons of rice for export.

 Such bonded systems of farming are the essence of the ‘contract system’ spoken of in the New Agricultural Policy. Besides Cargill, the giant, Reliance, planned to buy 2 lakh acres of agricultural land in Karnataka. Whether it did or not finally is a mystery but it has entered into contract farming agreements with farmers.

Even our cooperative milk producers were not spared and the duty on imports was reduced to zero resulting in a flood of imports. The EU had been dumping lakhs of tonnes of milk into the sea to maintain prices; now they were given a ready market.

In the Slave Trade during the birth of capitalism, blacks were whipped, tied and exported from Africa to America; similarly, indentured labour was sent from India to the West Indies. Nothing so crude is required in the era of imperialism and its new slave trade. Outsourcing of work to India is gaining ground — some of this, as in the IT sector, is refined, others cruder. The ship-breaking yards; the trade in human organs; the use of Indians as experimental guinea pigs; and the use of Indian genes, human embryos and human blood for the growing bioinformatics industry, are a few examples of the extent to which the drive for profits can reduce the imperialists and their Indian agents, to a vampire-like existence. So we find that with globalisation India has become a massive hunting ground for its cheap labour — both hi-tech and the illiterate variety.

And if to all this one adds the spiralling tourist industry (which has more than doubled in size during the very first decade of globalisation) with the growth of sex trade and the marketing of Indian women, it amounts to the most inhuman and demeaning form of profitmaking conjured up by capitalism — a sort of slave-trade of the modern era, without the overt crudity of the past, but as ruthless, vicious, and degrading as that of the medieval ages.

To summarise, we see that the financial attack on our country is taking place in two ways : first, by a direct attack of foreign capital through the TNCs and international financial institutions; second, indirectly, riding on the back of India’s big corporates. In both cases they are facilitated by a class of ministers, top bureaucrats and the vast network of political, intellectual/cultural, media and other agents.
                     

The list of sell outs could go on and on but suffice it to say with each coming day the policies of sell-out are only increasing reaching peak levels with digitalization and the lockdown. The ‘drain theory’ as propounded by R.C. Dutt and Dadabhai Naoroji that ignited the freedom struggle is was even at the turn of the e century as it was earlier. Let us then look at the level of the foreign loot as it existed even around the year 2000:

The major source of visible earnings by the imperialists comes from three basic areas: (i) Interest on the foreign debt (ii) Income (i.e., Dividend, Royalties, technical fees, etc.) on FDI invested in the country. (iii) Returns on the financial markets — i.e. on FIIs, GDRs, Eurobonds etc. Of course, in addition to these, there are technical collaborations, which do not involve capital investment, yet give returns. Also, there are the fat salaries paid to expatriate directors, managers, technicians which too is difficult to estimate.

Here we shall just do a rough calculation of the major sources of drain taking place at the turn of the century. The foreign debt, after the continuous spate of devaluations, would roughly be Rs 4,90,000 crores. If we calculate interest at the conservative rate of 4% the foreign drain due to interest on this debt would amount to Rs 20,000 crores ($4 billion). If to this is added the NRI deposits of roughly $8 billion that has been given huge rates of interest varying from 12% to 15%, with the full right of repatriation, there is a further outflow of about $1bilion yearly.

Next the drain that accrues from income on FDIs: According to then commerce minister Murasoli Maran, investments in collaborations since 1981 alone have amounted to $38 billion; if, to this, we add investments in direct subsidiaries .... at a very conservative figure it could be $12 billion... the total comes to roughly $50 billion. Add to this roughly $10 billion invested prior to 1981and another $20 billion of FDI invested in the last 5 years (including re-investments) till 2002, the total comes to roughly $80 billion.
If we calculate a return on this investment at 16% — which is the minimum rate guaranteed to Enron by the Indian government — the yearly return works out to $13 billion or Rs 64,000 crores. The return is likely to be much higher, when we consider that the US claimed they lost $450 million (Rs 1,800 crores) in just one year on royalties in the pharmaceutical sector, because India had not changed its patent laws. Also, if we consider Maruti, with only a 50% stake, repatriated a huge Rs 285 crores in ten years, on an investment of Rs 103 crores.... i.e. a yearly return at the rate of 28%. And what was guaranteed to Enron was the minimum; most TNCs operating in India make far more than this ‘minimum’.

Now if we turn to the financial sector: the FII quantum was $14.5 billion and GDR / Eurobonds was $ 8.7 billion. The return on FIIs is very high (mostly speculative profits) and has been suggested by some economists at about 20%, while income of GDRs come from dividends and would roughly be, say, 10%. So, the total outflow from these (FIIs + GDRs) sources comes to roughly $4 billion or Rs 19,000 crores.

Thus, at a rough calculation, the total outflow from these three sources alone amounts to $22 billion yearly (nearly Rs 2 lakh crores in today’s terms). 

Besides this, there is an enormous ‘invisible’ flight of capital from the country. First let us look at the trade front. In 1995 studies by three American economists of India’s trade with the US, indicated that the total figure of capital flight from India via this particular route (trade) amounted to between $15 and $20 billion yearly. Two major methods of such extraction are: (i) through highly unfavourable terms of trade and (ii) by under-invoicing and over-invoicing of exports and imports. The terms of trade continue to go against India due to the continuous devaluation of the rupee. With each devaluation the Americans have to pay less dollars for what India exports them, and India has to pay more dollars for what it imports. In the second method TNCs operating in India resort to over and under invoicing as a method of transferring dollars (and profits) to their parent company abroad. So, for example, Coca Cola, could import its concentrate from its parent company at say $1000 a litre, instead of the $10 that it may actually cost. Thereby not only are dollars transferred to America, but also the profit are highly reduced to avoid paying tax in India; as the parent company makes a bumper sale on its concentrate to India, while the Indian company has to make big payments for what costs next to nothing, thereby making losses. Here, Coca Cola resorts to over-invoicing. Similarly with companies exporting to their parent company, they resort to under-invoicing. If by such means only the US gains say $20 billion; if one includes Europe and Japan the figure would be much higher. As the US accounts for only a third of India’s foreign trade, at a conservative estimate would be India losing through this route roughly $30 billion a year. With such windfall gains, it is no wonder that the WTO is aggressively breaking down trade barriers!!

Next, if we look at India’s Brain Drain, here too the loss to the country is enormous, and takes varied forms. First, the Human Development Report of the UNDP (2000) estimated that India loses $2 billion every year by providing cheap university education to professionals who migrate. This does not, of course, include the vast amount of goods and services outsourced to India itself, utilizing the cheap labour. So, for example, of the $10 billion IT exports, more and more is being outsourced to India in recent years. Through such transfers India loses a minimum of $3 billion each year. Now, if one turns to the sphere of research and bioinformatics, once again the loss is huge. In 1996 the Gene Campaign estimated that the US economy gained over $70 billion from "gene imports". Not only has India lost the $700 million yearly in bioinformatics, whose entire gain goes to the US, but also the latter’s attempts at patenting all sorts of Indian produce like Basmati, neem , turmeric and tens of other Indian natural products has led to an enormous loss to the country. So, of the estimate by the Gene Campaign a good part will come from India. Even if we take a nominal loss of over $1 billion the total lost through these means would be another $2 billion. So, the total yearly loss through the Brain Drain would be to the order of $7 billion yearly. 

Then there are the huge sums of money that leave the country illegally seeking tax havens like Switzerland. The IMF had estimated that wealthy Indians have stashed $100 billion in foreign accounts. This is likely to be a gross understatement as the kickbacks alone on defence, at say 5%, would be to the order of $0.6 billion per year. Anyhow, assuming that this amount left the country chiefly in the last three decades, with greater amounts leaving in the liberalized era, it would mean roughly $5 billion leave the country through this route every year. 

Then over and above this there are the other sundry methods of loot, which are difficult to even estimate, unless some serious study is done. There are, for example, the huge salaries paid to foreign technicians and expatriate directors of companies; amounts lost through the cheap sale of assets of PSUs to the TNCs; the gigantic arms deals at inflated rates (like recent Rafale) with massive kickbacks mostly deposited abroad; and numerous other sources of extraction of the country’s wealth.

Now, if we total these figures (not even considering the figures of expatriate families, sale of PSUs, arms deals, etc) we will get a rough picture of the total yearly drain from the country. At a conservative estimate the total flow of money abroad each year from India, at the turn of the century, would have been roughly $ 65 billion. In other words, the country was losing roughly $65 billion each year to the imperialists. To get a rough idea of the size of this drain it would come to about 11.7% of the GDP figure of 2000 ($ 468 bn). This is far greater than that of colonial times which was estimated at 8%. Besides this does not include vast sums siphoned indirectly and not included in the above figures. 

Is it at all possible for any country, least of all an underdeveloped one like India, to develop with such a huge drain on its wealth each year? Unless this is stopped there is no possibility whatsoever of our country’s development!!

Yet this was merely the starting point of the impact of globalisation. The real onslaught has been taking place recently on a scale unimaginable before. Since 2000, the opening up of the economy has increased exponentially so one can imagine what the drain would be today.

Globalisation Today

So far, in the earlier section, we covered the earlier period of globalisation and the massive onslaught on our economy. We estimated that the drain was already more than colonial periods by 2000. But as the world capitalist economies went from one crisis to the next, they engulfed third world countries like India deeper and deeper into their quagmire. Hardly had the dot com bubble burst, that soon the economies again began to slow down resulting in the continued stagnation post the Great Recession of 2009-11. To stabalise their crisis-ridden economies the US/EU/Japan resorted to even more aggressive postures against the third world countries (besides QE & low interest rates) all of which reached peak levels during covid/lockdown.

The foreign penetration now is so widespread that what was mentioned earlier would seem just a fraction of what exists today, specifically post-covid. We have already seen with the massive digitalization of the economy how the MSMEs are being pushed to the wall. At the mere push of a button — whether to purchase, or for online interaction and meets, or for entertainment or for education, or for bank transactions — revenue/commission is siphoned off abroad to the US Digital Moguls, without us even realizing it.

Besides today the corporate world, particularly in India, but also the US, is more a mafia, involved in numerous nefarious activities with their wealth parked in tax havens immune to tax and also vigilance. An extreme case in point is the 3 tonnes of heroin found at Adani’s Mundra port and later hushed up, worth millions of dollars. This saw the light of day so much more must take place that we never hear about. Except for a few industrial houses crony capitalism and fraud/corruption is synonymous to the corporate world today One just has to see the huge bank frauds and the rising NPAs with no action taken to understand the scale of these dubious operations. Also various bankruptcy rules have been concocted to let the fraudsters off scott free, even though they may have usurped thousands of crores of bank deposits and/or advances for flats.

The extent of bank/corporate/politician loot of people’s deposits is best seen in a recent video by Prasun Bajpai entitled “Corporate Debt & Govt Banks”. To mention just a few points from this video:

  • the telecom companies have loans of Rs.6 lakh crores of which Rs.1 lakh crore increased just to pay for 5 G spectrum; of this Jio had Rs.1,75,000 crore, Air Tel Rs. 1,35,000 crore and Vodafone Rs.2, 15,000 crore.
  • Over 50% of the entire bank debt is owned by corporates
  • Just 85 companies have debt of Rs.4 lakh crore from PSBs which are categorized as high risk
  • Adani has a gigantic debt of Rs.2,20,000 crores, which increased a mammoth Rs.70,000 last year; of this 75% is from banks;
  • Trade deficit almost tiples to record $ 30 bn in July
  • It is not only private corporates who are in debt even big public corporates are in huge debt: eg Power Finance Corporation $ 90 million;
    Indian Railway Finace Corporation $ 46 million; LIC Housing Finance $ 26 million
  • Some of the private ones are: L & T Finance Holding, Shri ram transport, India Bull Housing, Chola Mangalam, GMF Infrastructure, Tata Communication
  • He warns that much of these loans are in the manufacturing sector and if these go broke they will bring down the banks with them

Here it is very difficult to estimate the illegal funds funnelled off but this would be essential at some stage as the figure would be far more than what goes legally, given the scale of black operations and huge NPAs from defaults.

The foreign funds come in the form of FPIs, FDIs, PEs, VCs, M & A, tech collaboration and a host of unseen methods, including so-called philanthropic organisations like the Bill and Malinda Gates Foundation (BMFG), Rockefeller Foundation (RF), Clinton Foundation, etc. These funds have such a wide network that they virtually entangle all aspects of Indian life from corporate control, control of banks and financial institutions, control of governments and politicians/bureaucrats, control of the media, control of health and education, control of even the cultural life of the country and most social organisations — either directly or through their vast network of agents in veritably every field. Our politicians become therefore nominal with the main economic agenda determined by their masters. It is for this reason no party at central or state level — or for that matter media, or even liberals and left - dare go against the ‘economic reforms’ being pushed through or for that matter even the Covid agenda of lockdown, masking or vaccines.

In my article in an earlier issue of Mainstream, entitled Lockdown As A Means Of Controlling Covid?, I outlined at length how the entire covid agenda was being dictated by the PHFI (Peoples’ Health Foundation of India), headed by the unscrupulous puppet, Sreenath Reddy (at a salary of Rs1 crore per month, besides perks), with top politicians and corporates on the board, all manipulated by the BMGF and RF in league with the pharma and vaccine majors. Many of the top board and task force members have revolving doors with pharma, medical, top govt and international bodies, not to mention the WHO at their head. They also operate through their trusted agents in the bureaucracy (NITI Ayog representatives, top brass in the RBI and hundreds of IAS, IPS and IFS officers), politicians (most in the ruling and even opposition circles like Man Mohan Singh,), through their stooges in the corporate world (like the Infosys founders, or Ambanis), and not to mention the host of NRIs in top positions abroad with deep pockets in India. We have already seen how even our stock exchanges are controlled and dominated by foreign funds with Indian investors at their mercy.

Before coming to the funds entering the country through the various routes outlined let us first see the controls over the two major corporate houses — Adani & Ambani — who defacto control our country and its politicians. The people may elect the politicians but it is veritably just two families who call the shots. So, let us look at these two upstarts who basically achieved their giant size due to the mutual favours the government bestowed on both.

Take the Ambanis or the Reliance conglomerate first. For decades it has been the Ambanis who have dominated the scene with their control not only over politicians and bureaucrats but also most of the media. The Adanis have just this year shot ahead in wealth and so influence, but the Ambani network built over decades continues to dominate — at least for the moment.

We have seen how the Ambanis grew in the initial phase with govt support and intertwined with US funding and technology. Now we see, particularly during covid a massive tie-up of Reliance companies with mostly US conglomerates. While the entire country was locked up in their homes not even able to step out, the Ambanis, just in this period were super active. On April 23 2020 Facebook bought 10% stake in JIo Platform for $ 5.7 bn (Rs.43,450). On May 9 2020 the US-based VISTA Equity Partners invested Rs.11,367 crores in Jio Platform to give it a 2.2% stake in Jio Platform. On July 15 2020 in an unprecedented 14th consecutive deal US tech giant Google was set to buy another 7.7% stake in Jio Platforms for Rs.33,737 crore. Finally, wireless and tech leader Qualcomm bought a 0.15% stake in Jio Platforms adding to the slew of investments since April 2020 which crossed Rs.1.2 lakh crore taking foreign investment in Jio Platform to 25.24%. The other investors being General Atlantic, KKR, Intel, Saudi Sovereign Fund, Saudi PIF, and Abu Dhabi State Fund. This infusion of funds reduced the debt of Reliance of $ 40 bn by half. The debt of $ 25 bn in the O2C business remained.

In June 2021 Google Cloud and jio Platform announced a new tie-up for 5 G technology [1]. In August Google and Jio teams developed a smartphone, JIoPhone. [2]

Now if we turn to their other major cash spinning venture, Reliance Retail, we find that in Sept 2020 PE Silver Lake of the US acquired a 1.8% stake in Reliance Retail. Then in Sept 2020 KKR invested R.5,500 crore in Reliance Retail (1.3%) and in October yet another US Private Equity, General Atlantic, invested another Rs.3,675 crore in Reliance Retail for a 1% stake taking the total foreign investment to 3.8% (BS Oct 1) On Oct 4 2020 Reliance Retail announced an investment of Rs.7,350, crore by the Singapore Sovereign Wealth Fund.

In the same month, RIL and UAE’s run oil giant Adnoc announced a new petrochemical joint venture to produce chor alkali, ethylene dichloride, and polyvinyl in the middle east. RIL was to invest $ 1.5 bn — the biggest in the middle east

Finally, to cement all these foreign deals the Ambanis made Yasir Al-Rumayyan (chairman of d Aramaco and the governor of the Public Investment Fund of Saudi) an independent director on the board of RIL. Aramaco is a defacto US giant, and so the US noose around the Ambani neck is complete as we have already seen how the massive Jamnagar refinery is dominated by US corporations. With the senior Ambani ailing it is probably the US corporates calling the entire shots through their stooges in RIL.

Now let’s turn to the other Gujarati giant who as we have seen is the fastest growing billionaire in the world and has outpaced not only Ambani but also Bill Gates.

Adani’s foreign entanglement is even deeper, and what is more, shrouded in all sorts of secret and dubious shell companies in off shore tax havens. His entire growth is built on borrowings, networks of shell companies and government largesse’s throwing away infrastructure wealth at throw away prices. No wonder he is the fastest growing billionaire in the world having risen from nowhere though his pre-tax profits are a fraction of what Reliance or TCS earn. Most is probably siphoned out illegally.

Jairus Banaji writes: “So we have a rapidly expanding conglomerate with weak cash flows that funds its growth not through internal accruals but through bank debt and more recently through recourse to the global bond markets. The most interesting part of its financing pattern, however, is the presence of shadowy offshore entities such as the three Mauritius funds whose demat accounts were recently frozen by the National Stock Exchange (NSE). As it turns out, at least 2 of the three Mauritius funds which are said to hold over 90% of their assets in Adani group companies had already been shown in one article from July 2018 to be sub-accounts of a Swiss account held by bank scamster/economic fugitive Nitin Sandesara.......In the half year that saw India’s most devastating health crisis ever, with over one million dying through lack of preparation and countless numbers of families pushed into absolute poverty, a sudden surge in three Adani stocks saw a whopping $43 billion added to Gautam Adani’s wealth! If you want to know how, you have to ask the regulators to find out what’s going on between him and those Sandesara funds.

Mauritius is not alone, of course. An investigation by the Australian Broadcasting Corporation revealed Adani’s Australian operations (the Carmichael coal mine project) to have ‘previously unknown tax haven ties in the British Virgin Islands’. Here the crucial figure is Gautam’s older brother Vinod Adani. His name cropped up in the Panama Papers with no action taken. Vinod has been listed as sole director of a Singapore company, Global Renewable Energy Holding, incorporated as recently as January 2017. In a piece on Gautam Adani’s Australian solar projects, Joshua Robertson told readers: ‘Singapore company filings show Global Renewable Energy Holding Pvt Ltd is owned by Atulya Resources Ltd in the Cayman Islands. Atulya Resources is in turn owned by ARFT Holding Ltd in the British Virgin Islands. Documents held by the Singapore corporate regulator disclose that “the Adani Family” is an ultimate shareholder of ARFT Holding Ltd.’. Again, the India’s Directorate of Revenue Intelligence was able to show back in 2014 that the Adanis were using a shell company in Dubai to siphon hundreds of millions of dollars from the company’s books into Adani family tax havens overseas by over-invoicing purchases of power equipment for their Maharashtra electricity project from Chinese and South Korean vendors and routing the extra money to the Mauritius account of one Electrogen Infra Holding Private Ltd. (EIF). It cited a letter from EIF to its bankers dated 26/04/12 proving that ‘Shri Vinod Shantilal Adani had a direct control over the activities of EIF through Asankhya Resources Family Trust (ARFT)’. As the Guardian’s South Asia correspondent, Michael Safi, noted at the time, the equipment bought from Hyundai Heavy Industries involved an average mark-up (invoice inflation) of 400% and that bought from three Chinese companies 860%!  [3]

These fact are also corroborated by Suchetra Dalal in her magazine MoneyLife in an article on July 16 2021 entitled “The Story of the Adani Scam - Full case study”.

This then is how the Adanis make their illicit wealth much of which is used politically and the rest stashed away abroad in tax havens. Other connections are as dubious which came to light in June 2021 when it was discovered that the Adani Group had sizable investments of foreign funds — Albula Investment Fund, Cresta Fund and APMS Investment Fund. [4] A month earlier it was reported that Adani Green was to have investment of $ 3.5 bn from Soft-bank promoted SB Energy. [5] And the Gangavaram Port bought from the DVS Raju family had extensive stake of PE Warburg Pincus. [6] Additionally ACSA (Airports Company South Africa) and the Bidvest Group (is a South African giant conglomerate with international connections where 68% of its shares are owned by intuitional investors) hold respectively 10% and 13.5 % share in MIAL (Mumbai International Airport Ltd).

Adani’s massive gas industry is tied up with Total, the French Giant and is called Adani Total Gas. In this the foreign promoter (Total) owns 37% and FII’s own another 18% making it a defacto foreign company. Total, a French Company is the world’s fourth-largest privately-owned oil and gas producer in the world. Total has a notorious reputation in the erstwhile French colonies and ironically on its latest all French board there is one Indian - Namita Shah who is executive vice president. Namita Shah is the cofounder of Presolv360, a legal tech company in India, recognized by the Department of Justice, Government of India, which specializes in online commercial dispute resolution via electronic arbitration and mediation. She is close to the Modi establishment and so not surprisingly to the Adani Group. In addition to this, recently, the Adani Group and France’s TotalEnergies have entered into a new partnership to jointly create one of the world’s largest green hydrogen ecosystems. In this strategic alliance TotalEnergies will acquire 25% minority interest in Adani New Industries Ltd from Adani Enterprises Ltd. ANIL’s ambition is to invest $ 50 bn over the next 10 years in green hydrogen and associated ecosystem. [7]

And finally, Adani in collaboration with Wilmer group has entered agriculture in a big way. Wilmar International Limited is Asia’s leading agribusiness group and a multinational ranked 211 on the Fortune 500 latest listing. It ranks amongst the largest listed companies by market capitalisation on the Singapore Exchange. It is a Singaporean investment holding company that provides management services to its 400+ subsidiary companies. At the core of Wilmar’s strategy is an integrated agribusiness model that encompasses the entire value chain of the agricultural commodity business, from cultivation and milling of palm oil and sugarcane, to processing, branding and distribution of a wide range of edible food products in consumer, medium and bulk packaging, animal feeds and industrial agri-products such as oleochemicals and biodiesel. It has over 500 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries and regions. Supported by a multinational workforce of about 100,000 people, but with a notorious reputation. Wilmar controls nearly 30 per cent of the world’s edible oil business, with its tentacles spread across continents.

Wilmar has come under criticism for its exploitation of child labour and slave labour, as well as unsafe working conditions on its plantations amidst other worker mistreatment incidents. In 2012, Wilmar was named the world’s least environmentally friendly company. On 30 November 2016, Amnesty International published a report into working conditions on the Wilmar International plantations and refineries in Indonesia. It alleged human rights abuses, including "forced labour, low pay, exposure to toxic chemicals and discrimination against women". According to Amnesty International, Wilmar International profited from 8 to 14-year-old child labour and forced labour. Some workers were extorted, threatened or not paid for work. Some workers suffered severe injuries from exposure to herbicides containing paraquat. Yet, Wilmar customers include FAMSA, ADM, Colgate-Palmolive, Elevance, Kellogg’s, Nestlé, Procter & Gamble, Reckitt Benckiser and Unilever. Wilmar palm oil is used in popular products like Magnum ice-cream, Colgate toothpaste, Dove (toiletries), Knorr soup, KitKat, Pantene shampoo, Ariel, and Pot Noodle.

In Adani-Wilmar the foreign promoter, Wilmer, has a 44% shareholding and FIIs 1.5%. Combined they control the company though Adani’s share is also 44%. In the financial year 2021-22 Adani — Wilmer spent a mere 0.7% on its employees and gave a 155% return to its investors 88% of whom are the two promoters. It has purchased a host of companies like Ruchi Soya and Kohinoor Rice and is the second largest FMCG company in India and 85% of its FMCG business is edible oils an essential item used in every home.

So we see that by far the two biggest conglomerates in India which seem to determine our political future are themselves very little Indian, not only intertwined and dominated by foreign corporates but also have the bulk of their money and wealth stashed away abroad. Even their property and houses. We have already seen that the older corporate houses have long since been dominated by foreign capital, as also the recent upstart Poonawalla who miraculously rose to 4th position on the back of millions of deaths — relocating to London renting one of the most expensive properties there. Poonawalla and most vaccine makers in India have been deeply dependent of Bill Gates funding and have a close relation with the BMGF.

The best example, though, is INFOSYS where the company has majority FPI holdings at 33%and the promoters and their families at 13% are deeply interwoven with the foreign sharks. It is no wonder that one of them, Nandan Nilekani, was the architect of the digitalisation of the economy getting the Aadhar promoted. He also has deep links with the Bill Gates type and played a major role in promoting their agenda through PHFI during covid/lockdown. The other, Narayan Murthy, illicitly floated the company ‘Cloudtail’ which was one of the largest sellers on Amazon India. The annual report for 2020/21 showed that Cloudtail paid Amazon fees of £ 95 million, almost 10 times more than what the Indian business reported in profits. According to an analysis, corporation tax paid was a meagre £ 8 lakhs per annum compared to £ 798 million in revenue when averaged over the last four years. Cloudtail is a joint-venture between Narayan Murthy’s Cataraman Ventures and Amazon India. It is owned by a holding company, Prione Business Services, which is owned 76% by Catamaran Ventures and 24% by Amazon. [8] Why such a web of companies and interlinking board members if not to hide the reality. Most of those on the board of Cloudtail and Catamaran are former Amazon executives like, Rajesh Jindal, Sumit Sahay, and Ranjit Babu. Guardian reported that the structure raises questions whether Cloudtail is really an asset of Amazon — and whether the Murthy’s are the name lenders. The deal between Amazon and Catamaran gives the US company the option of buying Cloudtail, if Indian FDI laws change. The clause would land the Murthy family a huge windfall.

But it is not only these corporate houses that act as the major vehicle of foreign capital to loot our country our top bureaucrats and politicians are most willing accomplices changing the laws to facilitate their penetration. We have already seen what happened in the late 1990s and early 2000s, but in the last monsoon session of Parliament numerous new Bills and Acts were bulldozed through under the cover of covid/lockdown. For details see my article on ‘lockdown’ in Mainstream [9] and for the political/bureaucratic involvement through PHFI see my article on the Great Reset [10] where I have given facts to show how the philanthropic bodies of the US operate through a vast network in India, most noticeable during lockdown/covid.

Now if we turn to our Banks here too, we find they are also being taken over by the foreign intuitional investors. In just the first covid year FPI stake in private banks shot up phenomenally between March 2020 and December 2020. In just these 10 months, while the entire country was panic stricken and isolated in their houses, the FPIs came bulldozing aggressively not only into our stock exchanges but also banks taking defacto control. A few examples of the increase in FPIs in these 10 months of 2020 are: [11]

Bardhan Bank from 13% to 35%; Yes Bank from 2% to 15%; RBL Bank from 25% to 32%; Kotak Mahinder from 39% to 45%; Axis Bank from 45% to 51%; ICICI Bank from 44% to 47%; HDFC Bank from 37% to 39%....

Then too the top personnel of these banks have dubious records and intertwining links to international financial institutions. For example the most notorious bank PNB (Punjab National Bank), involved in the bulk of the fraudulent big loans and resulting NPAs, is at the centre of this scandal. Board members of PNB Housing Finance Ltd, who have links to PE giant Carlyle Group, decided to issue shares worth Rs.4,000 crores to investors including Carlyle and former HDFC Bank MD, Aditya Puri (who joined Carlyle as senior advisor). Carlyle has a 50% stake in PNBHFL and a 26% stake in SBI Card. One Hardayal Prasad who was MD & CEO of SBI Cards took voluntary retirement and joined PNBHFL as MD and CEO. Prasad who had a remuneration of Rs.68 lakhs in 2018-19 was hired at a fixed salary by PNBHFL of Rs.1.91 crores plus a performance related variable pay of Rs.1.12 crores plus 5.5 lakh ESOP (stock options) at the then market price. Similar were the links of Neeraj Madan Vyas with SBI Cards, PNBHFL and private equity GE and Carlyle. In fact when the controversial Rs.4000 share allotment by PNBHFL took place 23 senior executive raked in Rs.13 crore by selling their shares whose prices had doubled. Of course, in India no insider trading case!!! [12]

So, it is not just the private banks that are taken over, but even the public sector banks are deeply intertwined with foreign investors. And if the Indian board members are raking in fortunes one can just imagine what the Carlyles and GEs are making — as it is they who control the shots.

Next let’s turn to the extent of direct foreign investments in India which comes in the form of FPIs FDIs Private Equity, Venture Capitalists, etc. The Foreign Investment Promotion Board (FIPB) was replaced by the Foreign Investment Facilitation Portal (FIFP) to speed up the FDI inflow in the country. FIFP replaced FIPB in May, 2017. Earlier if the Foreign Direct Investment (FDI) amount exceeds Rs3,000 crore then it must be approved by the finance minister and subsequently by the Cabinet Committee on Economic Affairs (CCEA) on the recommendations of the FIPB. Currently (2019), only 11 sectors, including defense, small arms and retail trading, require government approval for FDI and about 91 to 95% FDI proposals are under the automatic route.

Earlier 50% of Foreign Portfolio investments came through what were called P-Notes. These were conveniently devised by the GOI for the foreign investors to hide their identity. As a result the absolute value of P-Notes investments in 2007 was Rs.4.5 trillion But this route dropped drastically when SEBI brought some transparency in 2007. Anyhow 50% of FPI money comes from tax havens Mauritius and Luxemburg together with the US. India has witnessed a massive turnaround in foreign portfolio investment (FPI) flows. There has been a relentless inflow since February-May 2020, and inflows reached $36.8 billion in FY2021 — only second to the $42.2 billion in FY2015.

Next if one looks at net FDI inflows into India in 2015-16 it was $36 bn; in 2016-17 it was $ 36 bn; in 2017-18 it was $ 30 billion in 2018-19 it was $ 31 bn; in 2019-20 it was 43 bn and in 2020-21 it was 44 bn. [13]

Much of the PE/VC funds are used to take over Indian companies or invest in IPOs. The extent to which this is the case can be seen that just in the quarter ending Sept 2020 they increased by 6% over the same quarter in the previous year, which was $ 21.6 bn. That would amount to nearly $ 100 bn in the entire financial year 2020-21.

All these vast funds give huge returns to the imperialists far beyond what they could imagine in their home country. So for example, even the interest rates vary drastically in the two countries - while there it fluctuated between zero and two percent, here it more between 5-7 percent. The returns from the stock exchange would be mindboggling as it is de-facto manipulated by them each time selling when it is high and buying when it is low. While it is a gamble for the Indian investor for them it an assured 20-25% return if not more. Then in production with wages so low compared to the west the profit margins guaranteed are exceedingly high. So in all ways it is a win-win situation for them. And the greater their crisis the more they will squeeze out of countries like India.

Then even if we turn to our currency, foreign exchange, exports-imports and gold stock we see a similar situation. They determine oil prices and while the US companies in Saudi, Kuwait etc costs $ 10 per barrel to produce the oil, they sell it around the world at anything between $ 30 to $120 per barrel. Currently India is importing it at $ 95 per barrel. Imagine the profit to those companies and loss to the Indian taxpayer. And India is one of the largest importers of oil in the world. The same is with gas. Not only that with their ability to manipulate the value of the rupee against the dollar, we have to pay more for imports in dollar terms and get less for our exports.

Though gold is the only secure hedge against fluctuating currency rates though our gold stock rose to 613 tonnes as much as 361 tonnes of it was held abroad. The RBI reported that as of March 2020 gold reserves with it valued at $ 478 bn of which $ 263 bn was invested in securities abroad and $ 147 bn was deposited with other central banks. [14] In other words India earns at the low rates abroad on securities and is also at risk of losing the bulk of its gold in times of uncertainty or war. Why cannot India even stock its own gold within the country. It is inconceivable that any self-respecting country would keep its gold stock with other countries.

Not only that India is known to offer huge inflated rates on military purchases from the west as seen earlier by the French Rafale fighter jets bought at over double the price. These lucrative deals are used not only for kickbacks but also to buy diplomatic ties with the west. With their economies in the doldrums they salivate with such large deals at high prices at the cost of the Indian taxpayer. So, at the peak of the in August 2020 it signed a deal for the purchase of Phalcon aircrafts from Israel for $ 1 bn. [15] Then India purchased Israeli spyware at a huge cost - $5 lakh installation fee, followed by $ 6,50,000 to spy on just ten phones and further $ 8 lakhs for every additional 100 targets. So it costs India for just 110 targets $ 20 lakhs or Rs. 15 crores. [16] In fact it was reported that out of an annual trade of $ 4.9 bn each year with Israel, military purchases accounted to over a billion dollars. [17] These include Tavor X 95 rifles and $200 million contract for Israeli Spice bombs.

In addition, India’s weapons procurement from the United States jumped from meagre $ 6.2 million to a whopping $ 3.4-billion in the final year of the Donald Trump administration, according to official data. [18]

India was the fifth largest military spender according to a report released by SIPRI in April 2017 [19]. India on April 6 inked deals worth $2 billion to buy advanced surface-to-air missile systems from Israel. Israel Aerospace Industries (IAI) will provide the Indian Army with advanced MRSAM systems to take down hostile aircraft and missiles. It is the single largest contract in Israel’s defence industry history. India signed a $8.7-billion deal with France for 36 Rafale warplanes in September2017. India was negotiating the purchase of 321 launchers and 8,356 fire-and-forget missiles with the Israeli firm Rafael Advanced Systems Ltd for $ 500 million. India was in the final stages of closing a $5.1-billion deal with South Korea for building 12 mine counter-measure vessels (MCMVs) in the country. In 2015, India ordered $3.1 billion worth of 22 Boeing AH-64E Apache Longbow attack helicopters and 15 Chinook heavy-lift choppers from the US. In Sept 2020 India ordered $ 310 million worth of rifles from abroad (we cannot make our own simple rifle) [20], including the NATO produced Sig Sauer SG 516 assault rifle. On all these imports India pays heavy commissions and most are at inflated rates to enable larger kickbacks.

But this is not all. A huge amount of wealth leaves the country through the brain drain. Indian students spend $7 billion or around ₹ 45,000 crore per year on foreign education because of "sub-standard" quality of higher education in the country, according to a study by industry body Assocham and Mumbai-based Tata Institute of Social Sciences done in 2015. Interestingly, the money spent on foreign education is nearly 60 per cent of the funds Finance Minister Arun Jaitley had allocated to the education sector for the next fiscal.

Even as the number of Indian students opting for higher education overseas grows annually, their abroad spending is set to grow from current annual $28 billion to $80 billion by 2024, the latest ’Higher Education Abroad’ report by consulting firm RedSeer estimates.

According to the report, the number of Indian students opting for higher education abroad grew from 440,000 in 2016 to 770,000 in 2019 and is set to grow further to roughly 1.8 million by 2024, resulting in an increased overseas spending on higher education. [21]

In the five years before 2021, nearly 22 lakh Indian students went abroad. As per the Ministry of External Affairs report, as of the end of January 2021, there were more than 11.33 lakh Indian students studying in as many as 99 countries.

And it is not just students who are fleeing the country and spending vast sums abroad which if spent here could have enriched our economy. Millionaires have been fleeing in hoards with their wealth. Thus, the startling data that nearly 9.3 lakh people surrendered their Indian passports since 2015 till today [22]. Any surprise that 23,000 dollar-denominated millionaires have left India between 2014 and 2018 alone? And rich Indians are not just sending their money abroad: 8,000 Indian millionaires are also expected to pack their bags and move elsewhere this year. [23]The average age of an Indian settling abroad is 38 years; they are at the zenith of their entrepreneurial enterprise. That is an enormous loss of human capital. [24] In fact India has the largest diaspora in the world & as per the Ministry of External Affairs, there are 3.2 Crores or 32 million Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) residing outside India. Wealthy Indians are investing abroad at record rates, data from the country’s central bank reveals. In the 2021-22 financial year, Indians ploughed $1.69bn directly into foreign bank deposits, equity and debt instruments, and buying property outside the country, according to the Reserve Bank of India (RBI). That is almost 40 percent higher than the figure for 2020-21 and nearly six times the $292m that Indians invested abroad in real estate, deposits, debt and equity in 2014-15. [25] He cited New Zealand and Dubai as examples. In all, Indians spent nearly $113m in buying real estate abroad in 2021-22, compared with about $63m the previous year.

So, our millionaires have no compunction of developing other countries — they sent their children abroad paying phenomenal sums (rather than investing in good education here), flee the country at the drop of a hat, park their gains in foreign tax havens and contribute to the development of London, Dubai, Singapore, US etc and not our country. People like the Nirav Modi and Choksi even rob our banks and enjoy 7-star lives abroad. And it is all these robber barons (led by the 2As and their hangers on) and NRIs who wax eloquent on nationalism and patriotism while selling our country. It is they who are the chief enemies of India’s growth agenda and the biggest traitors to our country — the modern-day Jagat Seths. Also, it is in their houses that we will witness 5-star life styles with all imported structures (even their flooring will be Italian marble not Indian marble) and even cars adding to western markets and killing our own. It is also a rampage as though Adani and Ambani empires are not enough (even in Ambani malls one finds mostly big label foreign brands and tie up with apparel giants like Marks and Spencer’s), foreign brands like Ikea and Decathlons are swamping the markets with cheap goods wiping out local entrepreneurs.

So what is Indian left. Everything is tied up with foreign control resulting in a level of ‘drain’ of our wealth abroad that would even embarrass Dadabhai Naraoji, who would be turning in his grave seeing what is taking place in the country today. That too 75 years after independence. And the above does not include the vast sums siphoned off to tax havens by all and sundry politician, bureaucrat, film/sport star, big corporates, etc and their stooges in top positions.

E: Towards a Swadeshi Alternative

It is apparent that there is a link between section A and B (see previous issue). The backwardness of our country and the impoverisations of the bulk of its people is resultant from the massive drain of wealth going abroad by both legal and illegal means.

Today in India, after 75 years of independence, we find that our major big businesses are controlled by foreign corporates and financiers; that the bulk of our laws and policies are dictated by and for them; that the bulk of our ruling elite seek not advance of the country but amassing wealth by any means (legally or illegally) and stashing away major amounts abroad.

 I was, infact, shocked to find that even in Mumbai’s top malls, like Phoenix, Reliance, Jio, as also many upmarket chains, most of the products marketed are foreign brands thereby creating a huge market for foreign goods rather than local. And even if there were a few ‘local’ it was more TNCs in India or ones collaborated with them like Colgate, Pepsodent, ITC, Pepsi, etc. I found that the super elite are not satisfied with Indian (Rajasthani) marble flooring, they rip up the floors and spend crores on Italian marble and all their fittings are from abroad. It reminds me of the Raj Kapoor song of the mid-1950s (Shree 420) which went “mera joota hai Japani, mera boot ........sar pe lal topi Rusi, phir bhi dil hai hindusthani”. Today even the dil is not ‘Hindustani’ and Hindustani is worn on one’s sleeves making more noise than substance. It were these same fake hindusthanis who were in the forefront of flag waving during the Aug 15 celebrations who measure their patriotism, not by how much they oppose the loot from India, but, by how hysteric they can be against Muslims and few symbolic actions. Most of their forefathers were British collaborators as D. Raja and some others have brought out.

And as we commemorate this Mahotsav, we are waving the Indian flag to what purpose? To celebrate this pathetic state of affairs? One can understand a Naveen Jindal, of the Flag Foundation of India pushing this agenda as his family has amassed a fortune of $ 14.5 billion and the matriarch of the family is listed 349th in the Forbes billionaire list of April 2020. They have much to celebrate; but about the rest of us? Does not what this foundation’s chairperson say sound hollow to the bulk of India who cannot eke out even a minimum existence.

The flag inspires us to do our respective jobs well and dedicate ourselves to nation-building. If every Indian does their job well nothing can stop India from becoming a prosperous nation” said Naveen Jindal at the flag waving function in Delhi on August 7 2022. Yes, what he meant, was I will do my job well and continue to make billions and you Dalits must do your job well and continue to clean the toilets well. Not a word for our freedom fighters and the goals they stood for; not a word about the foreign loot taking place; not a word about the huge drain to tax havens by his friends, cronies and probably himself; and not a word about the massive corruption taking place destroying the very moral fabric of the country. Most important not a word about swadeshi (which independence was all about) — and this is not surprising as his prestigious Jindal School of Management is tied to the University of Texas and his major flagship companies have foreign investments of 10 to 20% and has collaboration with Tractebel of Belgium and Praxair of US. Quite naturally not a word against the massive drain taking place abroad which is in fact the main reason for retarding India from becoming a prosperous nation and not the question of doing one’s job well.

From the figures just mentioned the current yearly drain (legal) would come to:

On FPIs at roughly $ 40 bn a year; at the stock exchange as it is they who manipulate it the returns would be at least 25% i.e. $ 10 bn a year

On FDIs at also about $ 40 bn a year; again taking the Enron minimum figure of 16% guaranteed by the GoI the return would be $ 6.4 bn a year

ON PE/VC funds of about $100 bn per year the returns at about 20% (little higher than the minimum) the figure would be $20 bn a year 

On oil imports considering the cost of production of Saudi/Kuwait/US oil is $ 10 a barrel and India imports 4 million bpd at an average price of say $ 70 per barrel (today it is $ 96 per barrel) that would cost us in excess of the genuine market price $ 50 per barrel (if one gives them a 100% profit margin) or $ 200 million per day or $ 73 bn per year i.e. $ 73 billion per year at the minimum (at today’s crude oil rates it would be $304 million per day or $ 110 bn per year) is drained to the oil producing countries in excess of a reasonable market price. In addition as the value of the rupee falls the dollar payments go up.

Then in 2021 foreign military purchases was $ 6 billion all of which flows abroad
Then Indian students spent $ 7 bn per year on foreign education and another $ 28 bn on spending abroad making a total of $ 35 bn yearly, roughly doubling by 2024.
Then Indians legally ploughed $ 1.7 bn into foreign banks, equity, real estate etc in 2020/21.

Besides these, consider the 9.3 lakh people who have given up their Indian citizenship since 2015 till now (of which are 31,000 were millionaires). Assuming each family took abroad an average of $ 1 million. That would mean a flight for about 4 lakh families over the 5 years of $ 400 bn over 5 years or an average of $ 80 bn per year.
The biggest amount of drain, difficult to estimate is from the digital moguls operating here which would be massive but is mostly siphoned off secretly. If we see the bulk of our economic policies have been to further their interests, one could understand the magnitude of the issue. First demonetisation, then GST, then lockdown and numerous government policies in nearly all spheres from agriculture to MSMEs to all bill payments and even fines. The digital market is a monolith being forced on the people. The Gross value of digital payments in FY 21 was Rs.320 lakh crores [26] All the digital moguls like Amazon, Google, Facebook, Uber, Microsoft, Netflix etc showed either small profits or infact losses, which is unrealistic given that India is their biggest market outside the US and EU. In our calculation we will take an average estimate of how much they siphon off through this huge revenue, without paying a paisa of tax as they show losses. Given that the chiefs of Google, Microsoft, Twitter are all Indians drawing fat salaries between $ 50 million and $ 1 billion in the US one can imagine the importance these companies attach to the Indian market. So, if we ignore the official figures they show, in order to avoid paying any tax in India, let us assume they earn profits of 1% on their revenue. So, on a digital revenue of Rs. 320 lakh crores in India, if we can calculate even a minimum profit of 1% they would suck away a profit of $ 40 bn per year. This would be a very conservative figure and is likely to be much more. The GoI turns a blind eye to the huge loot taking place by these Moguls and even to the massive tax avoidance. They even encourage these companies by pushing people forcibly to digital payments, with little or no attempt up to put local servers as many countries have done like China, Russia and Iran. Are such policies nationalistic or anti-national?

Finally, unlike the earlier calculation we have not been able to estimate the amount going abroad through export-import (but it would be huge given the example of Adani mentioned earlier) and more particularly we have not been able to as yet estimate monies reaching tax havens by all and sundry crorepatis (and not only the shell cos of the corporates). Also not considered the indirect drain through the fabulous salaries, perks and ESOP (stock options) to foreigners (many of Indian origin but foreign citizens).
So, the yearly drain abroad in 2020/21 would come to about: 10 + 6.4+20+73 (lower figure) +6 +35+1.7 +80 + 40 = roughly $ 273 billion. If the invisible figures (i.e. through export/import, payment to expatriates, flight to tax havens of black money generated, etc) were added/estimated it would easily double to over $500 bn yearly flight from the country. That is about 17% of India’s present GDP of over $ 3 trillion leaves the country every year. Is it at all possible for India to prosper as Jindal says with such a huge flight of our wealth to foreign shores, just by doing our work sincerely?

So, during the colonial period the drain was estimated at 8%; at the turn of the century, it went up to roughly 12% of GDP and now it is estimated at a minimum of 17% of GDP — probably much more as invisibles now are enormous. Given the corruption levels of today and crony capitalism at its worst the final estimates of capital flight will require much research, but are likely to be mindboggling.

 In this scenario the first step towards a true celebration of India’s diamond jubilee to make it a genuine Azadi Ka Amrit Mahotsav is for all Indians not to fall prey to mere tokinism like waving the flag but to vow to struggle to prevent capital/wealth flight from the country. In essence carry forward the spirit of our freedom fighters and build our country on true swadeshi.

But who today is talking about this true spirit of our freedom fighters? The ruling establishment are talking about some esoteric ‘panch pran’ (five resolutions) and nari shakti at a time they release and felicitate the rapists and butchers of Bilkis Bano’s family. Then Modi and Kejriwal talk of making India a developed country by 2047 on our 100th anniversary without any real road map. The opposition and many a liberal/left speak about the death of secularism, democracy and the undermining of the constitution; but not a word on the neoliberal economy and the loot of our country for which our freedom fighters gave their lives. What then should have been the true agenda today if we were to really up hold the values and traditions of our heroic freedom fighters who gave their lives to free us from the colonial yoke?

Let us see first the standpoint of the government, then that of the opposition parties/lefts/liberals and finally what should be the road map necessary to really make India a developed country by 2047.

First the government. While the PM was waxing eloquent of stree shakti from the ramparts of the Red Fort the government in Gujarat was busy releasing the murderers of the most gruesome Bilkis Bano rape and murder case [27]. At the same time a Kerala High Court judge granted anticipatory bail to a well-known poet & writer from the ultra-left, against a molestation charge by a dalit writer saying “it is highly unbelievable that he will touch the body of a victim knowing she was member of the scheduled caste”. This well-known writer was no less than the judge as, in another similar case he presented sexually provocative photos of the girl as evidence of “loose character”. Here we are not going into the merits or demerits of the case all we are presenting is the attitude of misogyny of both the judge and the writer. So, while the country is talking about stree shakti we find rapists being felicitated, judges, CPM govt and a left artist with dubious attitudes to women.

And as for the panch prans, they couldn’t be more abstract. The first pran is to think big and at scale. For whom the Adanis, Ambanis and digital Moguls or for the masses of the Indian people. The second pran is for ‘decolonising the mind’ — not seeking external validation where India is being condemned for its poor performance on all fronts. While ignoring such data being presented they themselves are allowing the West to take over our country and also encouraging their cronies, like the Nirav Modis, Ambanis, Poonawallas, to flee the country in hordes with their wealth. The third pran is to uphold our civilisational heritage, without one mention of those who betrayed the country time and again to foreign invaders; and totally ignoring the great 3000 year democratic/peoples’ traditions of the non-Brahmin movement, starting from the Lokayatas/Charvakas in 700 B.C. The fourth pran is for unity and togetherness while fuelling the worst divide our country has ever seen, both communally and caste wise. The fifth pran is that of the ‘citizens duties’, suppose a la Jindal, while turning a blind eye to the high levels of corruption right at the top where the bulk of the politicians and bureaucrats are busier making money than doing their ’duties’.

And as for the opposition, while as aggressively taking up the campaign ‘har Ghar Tiranga’ they only talk of the undermining of the constitution with regards to the issue of secularism and democracy. The CPI(ML) Liberation went so far as to call for carrying out this campaign vigorously but that flags should be distributed free and not charged for. Beside, few took notice that the Flag Code was changed about a year earlier, to allow the flag to be made from polyester rather than Khadi — taking away orders from the small producers and giving them to the big corporates. In fact, just recently Reliance became the biggest Polyester company in the world. And, according to CAIT, the har ghar tiranga generated Rs.500 crore business for 30 crore flags. This infact goes against the very heart of the freedom struggle where Gandhi promoted khadi and the spinning of cotton in opposition to the factory-made Lancashire cloth. There would be no problem in such a campaign if the flags were made of khadi and came with the building of a mass movement for real swadeshi and a boycott for foreign/Ambani/Adani goods. But not one in the opposition raised this issue. Besides, as stated by Sarosh Bana “A 2020 study from the World Economic Forum estimated that 220 million people in India sustained on an expenditure level of less than Rs 32 (40 US cents) per day. Purchasing a flag would thus dent their daily budget”. [28]

There is not much point repeating ad nauseum about secularism and fascism when the roots of these two phenomena lie in the economic base of the growing neo-liberal policies. To oppose the attacks on secularism/democracy is meaningless unles the economic basis that drives it is confronted. We have already seen how the rise of hindutva was, nothing but the aggressive face of Brahminism which has existed for centuries, which took root with the rise of the neo-liberal economy. The seeds of this were sown not by the BJP/RSS but but none other than Rajiv Gandhi by opening the locks of the Babri masjid to promote communalism; and unleashing the anti-sikh pogrom, pandering to the sentiments of the orthodox hindus who hated the bhakti saints of which Guru Nanak was the most vocal representative. It is precisely this poisonous mix of rabid communalism coupled with vicious Brahminism (anti-dalit, patriarchy, etc) that make the explosive cocktail of Hindutva. It was Rajiv Gandhi who perfected that art! This is conveniently forgotten by the opposition of all types while attacking Hindutva. 

Why are all the opposition silent on the foreign loot today when that is the essence of the tradition of our freedom fighters? Why are they silent of the importance of swadeshi the essence of the freedom struggle? Why do they too moron-like wave the tiranga without linking it to these great anti-imperialist and anti-colonial traditions of the people of our country. At least on this occasion let us not fall prey to the agenda of the ruling establishment and take up the real issue of the welfare of the masses linked to the present economic policies. Turn the ‘Har ghar Tiranga’ into such a mass movement for swadeshi; boycotting polyester and promoting khadi.

Besides as Suraj Yengde says in his column in Indian Express “Independence rarely means anything to those still forced to carry night soil on their heads. The quality of independence comes with liberty and freedom — both of which are still frightening thoughts for Dalits to exercise. A dalit riding a mare sends shivers of fear in the minds of oppressor castes. A dalit girl going to school in a village ........” [29]

Last but not least, is it possible to build India into a developed economy by 2047 while allowing the present ‘drain’ on our wealth abroad to continue unabated? Yes, as Modi and Kejriwal say let’s go ahead in that direction, but to do so adopting is only possible by having an agenda primarily aimed at maintaining the wealth generated in our country and promoting a true swadeshi alternative. For that the following policies need to be adopted as a start:

  • All those big corporates that have foreign domination and controls be handed over to peoples’ cooperatives (Bajaj, Thermax and some other such big companies could be seen as possible alternatives to crony capitalism);
  • to conduct foreign trade on a more equal footing, including in oil; prevent the linking of the rupee and the stock exchanges to the US $ and US funds;
  • restore our gold to our own country;
  • build our own servers as many other countries have done and oust all the US digital moguls from the country;
  • rely on indigenous defense equipment and stop mortgaging our security to foreign contractors like Israel, US or even Russia;
  • promote our MSME sector and particularly micro industries who are the main employers;
  • restore our environment — soil, forests, water resources, air — and create a robust healthy environment;
  • make health care and education not only free but of high standard;
  • invest heavily in irrigation to tap and preserve our water resources;
  • instead of freebies (i.e. the formula of Universal Basic Income promoted by Klaus Schwab) invest in gainful employment and agriculture so that all can get a reasonable income;
  • reduce prices on essentials and raise taxes on the super-rich and corporates;
  • end corruption, particularly those taking place at high levels, and stop this drain of illegal wealth. According to Arun Kumar [30] The black incomes being outside the tax net reduces resource availability to the government. If the black incomes currently estimated at above 60% of GDP could be brought into the tax net, the tax/GDP ratio could rise by 24%. (ie the black economy is the tune of $ 2 trillion or $ 3.2 lakh crore.) This ratio is around 17% now and is one of the lowest in the world. And this official estimate must way below the real figure.
  • follow a policy of decentralisation giving more power to the states and local bodies — both fiscal and political.
  • Finally, and most importantly put an end to the foreign drain on our economy
    With such or similar policies there is no doubt that Indian can become a developed country by the year 2047. But is Modi or Kejriwal willing to push such an agenda? Unlikely. In addition, together with this, at the social plane to facilitate the process there would be a need to establish true democracy by smashing Brahminism not just structurally but also ideologically. While many in the opposition wax eloquent against the sabotage of democracy, which to an extent is true, they are unable to understand that in India no democracy is possible without annihilating Brahminism and the caste system.

Of course, these can only be a long-term goal to set for ourselves to achieve. Immediately on this Aug 15 2022 let us remember the great sacrifices of those who gave their lives for the freedom of our country, learn lessons from the betrayers, and call for a genuine independent India, free from the foreign stranglehold.

On this occasion let us start a new freedom struggle and as a first step call for:

  • Britain to pay India a token amount of £ 1 billion as reparations; to be used strictly for people’s welfare; particularly in the sphere of health, nutrition and immunity building
  • Continue the farmers boycott on Ambani and Adani and extend it to Amazon, Walmart and a couple of others
  • Promote the sale of small indigenous/local produce by MSMEs and famers’/artisan cooperatives and individuals
  • Scrap all laws/Acts/Bills that favour foreign entry/collaboration/domination
  • Ban entry of western cabal representatives (and their Foundations)
     in the country and promote true people to people relations with all countries on an equal footing.
  • Rebuild our ecology and reverse all laws that facilitate the destruction of our environment.

While these can be the general call on this Azadi Ka Amrit Mahotsav, the first two could be the action taken to initiate India’s second Freedom Struggle
Let us immediately mobilise the people of the entire country from today to:

 Demand £ 1 bn reparation from the British; for this one can also mobilise the NRI population of over 3 crores.

Boycott Ambani, Adani, Amazon, Walmart (Flipkart) to start with.

August 22, 2022


[1The Times of India June 25 2021

[2Business Line August 17 2021

[4Indian Express June 15 2021

[5The Times of India May 20 2021

[6The Times of India March 2021

[7Indian Express June 15 2022

[8The Guardian; June 14 2021

[9Feb 19, 2022 Mainstream

[10Aug 21 2021 and Aug 27 2021 issues of Mainstream

[11Indian Express June 14 2021

[12Indian Express June 25 2021

[13Indian Express May 18 2021

[14Indian Express June 26 2021

[15Indian Express August 27 2020

[16Indian Express July 21 2021

[17Business Standard Sept 25 2021

[18The Week, Dec 9th 2020

[19April 17 2017 Hindustan Times

[20September 29, 2020, Global Data

[21Business Standard September 25, 2021; by Vinay Umarji 

[22Al Jazeera, 2 Aug 2022Aug 2022; Why are wealthy Indians taking their money out of the country? by Charu Sudan Kasturi

[23ibid

[24Money Control; July 26, 2022 The Great Brain Drain; Sanjay Jha

[25Al Jazeera, 2 Aug 2022Aug 2022; Why are wealthy Indians taking their money out of the country? by Charu Sudan Kasturi

[26Indian Express July 30 2022

[27The Bilkis Bano case is only the tip of the iceberg. The psychology of upper caste pride and ego create the consciousness that the other SC, ST, Muslim are dispensable - killed murdered raped, tortured anything, it does not matter - there is no feeling of remorse. Internally they would even be celebrating the event. No other country in the world would treat their own people like this. The best example of this was the attitude towards the migrants during the first lock down by both the Centre and UP and other state governments (in varying degrees of callousness). After all, the bulk of the migrants were dalits, tribals or muslims. If the people did not intervene with humanitarian assistance like food, shelter etc lakhs more may have died either of starvation or exhaustion trying to reach their homes. Bilkis Bano and the release of the 11 with a felicitation is only the tip of the iceberg in this brahminical system where large parts of the people are infected with this ideology which permeates down the caste ladder. Unlike those who promote identity politics it is not brahmins per se who think like that, as there are many liberal/progressive ones, but that ideology and those who represent and promote it in every sphere of activity — social relations, politics, education, even food and clothes. The gruesome brutality of the murders - she was 5 months pregnant when raped at the age of 21, her 3 yr old child’s head was smashed, all the women members of her family including mother were raped and seven family members murdered — means nothing to such people even though all this was done by neighbours. Unless the caste system and Brahminical ideology that breeds it is smashed from its roots there is no hope for a humane existence, let alone democracy in this country - at least not for the majority. The members of the panel who released them with a unanimous decision stated “they are brahmins and men of sanskar”........That explains it all.

[28National Herald August 15, 2022

[29Suraj Yengde, What India needs at 75: A museum of untouchability, Indian Express, Aug 21, 2022 https://indianexpress.com/article/opinion/columns/suraj-yengde-writes-what-india-needs-at-75-a-museum-of-untouchability-8102202/

[30Mainstream, August 13, 2022

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