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Mainstream, VOL XLIX, No 1, December 25, 2010 (Annual 2010)

Indian Bourgeoisie in Post-Colonial Setting

Friday 31 December 2010, by Kripa Shankar

The Indian bourgeoisie had its genesis in the colonial order created by the British in the interest of their imperialist designs. They transplanted the European type of feudalism on Indian soil. Under British rule zamindars were owners of the bulk of the land and were free to raise revenue exactions beyond any limit. And their greed and tyranny knew no bounds. The British deliberately destroyed the handicrafts, mainly cotton textiles, to make room for British manufactures. Rural India was in ruins as a consequence and a large part of the population was almost without any livelihood. They also introduced British jurisprudence, wholly alien to our ethos. India since time immemorial had a communitarian order where the community managed the natural resources and resolved all conflicts. In this communitarian order everyone had an assured livelihood and no one was alienated as the community looked after every member. It had a value system where caring and sharing governed the behaviour of one and all. The villages were self-governing republics with no interference from the king. The British destroyed all this with one stroke, so to say.

India, which was the richest country prior to the advent of the British, became one of the poorest where famine haunted the land. Marx has succinctly observed: “All the civil wars, invasions, revolutions, conquest, famines, strangely complex rapid and destructive as the successive actions in Hindustan may appear, did not go deeper than the surface. England has broken down the entire framework of Indian society, without any symptom of reconstruction yet appearing. This loss of his old world with no gain of a new one imparts a particular kind of melancholy to the present misery of the Hindu and separates Hindustan, ruled by British, from all its ancient traditions and from the whole of its past history.”1

The British created a colonial structure which destroyed the old value system and as a result man became wolf to man. The predators, who included zamindars, big landowners, traders and the usurious moneylenders, now roamed the countryside. The bureaucracy created by them considered itself more British than the British. A commercial bourgeoisie had also come up linked to the requirements of the metropolitan economy. Railways were developed to facilitate this process and a nascent industrial bourgeoisie also appeared on the scene, closely linked to the metropolitan one. An English educated class was also promoted to man the lower rungs of the administration. The native bourgeoisie, though a product of the colonial order, now sought more space and political power. It could mobilise the vast peasant masses who had been pauperised. Mass mobilisation by the colonial bourgeoisie was only a ploy to pressurise the British to concede more power. It was not meant to confront the British but was utilised as a bargaining counter.

The Second World War weakened the position of the British imperialists and the latter considered it to be the better part of valour to retreat and hand over power to the bourgeoisie which was their creation and which in no case would harm the imperialist interests.

Thus a bourgeoisie came to power in India at a time when the world market was already divided by powerful countries and new entrants could not challenge their supremacy. A process of industrialisation was to be initiated by the new rulers but it was also clear that unless the domestic market increased with rapid growth in the purchasing power of the public, no sustained process of industrial growth could be initiated. The problem, in the first instance, was to provide remunerative job opportunities to the vast landed poor and landless persons in the rural areas. The Britishers had ravaged all the natural resources. The restoration, renovation and rejuvenation of these resources should have been on the priority list as it could provide millions of job opportunities within the rural areas and raise the income level of the people in those areas. All that was required was to resuscitate the village Panchayats to undertake these on a war footing. A nation which had waged a struggle for independence and where the people had sacrificed a lot was impatient to launch the second war of independence in the form of reconstructing the country. Nothing could stand in their onward march only if there was a determined leadership to galvanise the latent forces. But the classes on whom power was bestowed, so to say, by the British constituted a collegium of vested interests for whom the preservation of the status quo was more important. If the people were to be empowered to take their destiny in their own hands and collectively plan and implement all developmental activities with full popular participation, it would create a new ferment which would be detrimental to the entrenched vested interests. If the people are awakened and on the march it would eventually change the power equation. Although zamindari was abolished—and this brought great relief to the working peasantry—no land redistribution was undertaken. At present the land owned by the top one per cent of the rural households is equal to the land held by the bottom 60 per cent of the households.

The bureaucracy was further entrenched as all developmental activities were to be implemented by them. This bureaucracy has now degenerated as one of the most corrupt bureaucracies in the world. As a matter of fact it is the bureaucracy which decides major policies as, by and large, the political leadership has no vision of any sort and lacks competence. The Members of Parliament and State Legislatures are more interested in winning the election next time for which they patronise all sorts of anti-social elements and amass wealth through dubious means. Criminals have found new ground of entering politics because of their money and muscle-power. At present more than one-third of MPs and MLA have criminal cases pending against them.

THE Indian bourgeoisie, because of historical reasons, is so constituted that it cannot perform any of the tasks associated with a bourgeois transformation. It has not taken by the horns the pre-capitalist exploiters like big landowners, traders in agricultural commodities, usurious moneylenders, middlemen and brokers to pave the way for bourgeois transformation. Even banishing illiteracy has not found favour as what it fears most is an enlightened mass. A mass steeped in ignorance, superstition, bigotry and divided on caste, communal and regional identities will be desirable for a degenerated ruling class.

The bourgeoisie in the developed countries not only eliminated the feudal order but also undertook measures towards modernisation of their economies. The state played a notable role in mobilising resources. Even when they have reached high levels of development the tax-GDP ratio in such countries is generally twice that of India which ranks very low in economic and social development. Public expenditure on education and health as a percentage of the GDP is twice in the developed world. But the state in India taxes the rich at low rates and various taxes falling on the rich like wealth tax, inheritance tax, gift tax have either been abolished or not introduced at all. Besides, there is the grand scheme of tax exemptions. According to the Budget figures the revenue foregone through these exemptions has been over Rs 5,00,000 crores in the current year which is more than 80 per cent of the tax revenue of the Central Government. If these exemptions are withdrawn the need for annual borrowings of the same magnitude will not be required. The huge indebtedness on which the Central Government pays an annual interest of Rs 3,00,000 crores will cease to grow. But the bourgeois state prefers to borrow rather than tax the rich. It is well aware of the huge amount of black money that is siphoned off to Swiss banks but does nothing to prevent it. Because of huge tax avoidance and tax evasion the black money is estimated to be more than one-third of the Gross Domestic Product, a big part of which is stashed in foreign banks. The Global Financial Integrity Report 2008 has estimated that roughly Rs 1,00,000 crores goes out of the country every year. A gentleman in the horse-racing business in Pune is supposed to have stashed $ 8 billion in Swiss banks. The income tax arrears of this gentleman are Rs 37,000 crores, according to the Income Tax Department. India is now the largest importer of gold in the world. Every year India imports 800 tonnes of gold which is partly used to keep the black money in shape of gold bars. Charles Sobhraj once remarked that if there is any heaven for criminals, it is India. He should now add the richest Indians in the list.

The rich in India are averse to invest in production of wage goods as the majority is poor and has no purchasing power. According to the Reserve Bank of India, industries, by and large, are utilising only about 70 per cent of the capacity in most cases. This is an underestimate because the RBI estimates the utilisation capacity not on the basis of installed capacity but on the basis of highest production in any month. Given this scenario the capitalist will not invest, by and large, in manufacturing. The latter accounts for only 16 per cent of the GDP and employment in manufacturing is now lower than what it was two decades back, according to the Economic Survey 2009-10, pp. A-52. Huge profits are now earned in trading activity like the share market, commodity market, commodity futures market, real estate and other financial services where crores are earned not through the production process but by a click of the mouse on the computer. The annual turnover in the share market is nearly Rs 2,00,00,000 crores and the daily turnover in commodities future market is over Rs 70,00,000 crores. But the amount mobilised for investment through issue of initial shares was only Rs 23,098 crores in 2009, according to the Economic Survey 2009-10, p. 107. The Indian bourgeoisie can only generate crony capitalism where speculation is the main activity. Wealth gets concentrated in fewer hands and this further fuels speculative activities. A higher growth rate becomes possible through machinations of finance capital rather than production activities. This is reflected in lower growth in agricultural and manufacturing activities.

Due to the pampering of richer classes public investment is not only low but whatever is spent largely benefits the state bureaucracy which is all powerful and actually controls the political class. Take the case of public expenditure on major and medium irrigation works (canal irrigation). The combined expenditure by the Central and State governments in 2008-09 was over Rs 40,000 crores but the irrigated area through canals declined to 16,313 hectares. This figure is lower than what it was two decades back. The bulk of the amount goes into the pockets of the bureaucracy in the shape of salary and other allowances. Likewise only 40 per cent of the Rs 60,000 crore budget of the public distribution system reaches the poor. If the entire PDS budget is distributed as cash to the BPL households, each household will get Rs 10,000 in cash. But it will deprive the corrupt to corner the money.

The basic contradiction in India is between the vast labouring masses and financial predators. The bourgeoisie cannot undo this contradiction; hence it is likely to take the shape of an industry-military-bureaucracy complex ruling the country. Unable to resolve any of the contradictions, the ruling bourgeoisie is increasi-ngly depending on international capital to bail it out. There is a symbiotic relationship between the two and this is being vigorously strengthened by the ruling classes which is steadfastly pursuing such a course. A decadent bourgeoisie has no other option. It can only produce a dehumanised, alienated and sick society where, according to poets, “wealth accumulates and men decay” and where “virtue itself of vice must pardon beg”. The motto of this degenerated bourgeoisie is “get rich quick and throw the other man in the ditch”. This will devour all that is good and human in our society.


1. Marx, Karl, The First War of Independence, Moscow.

The author is an Honorary Fellow, G.B. Pant Social Science Institute, Allahabad.

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