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Mainstream, VOL LV No 40 New Delhi September 23, 2017

India and the Evolving New World Order — II

Saturday 23 September 2017, by Kobad Ghandy


This article has been sent to us for publication by the eminent Marxist-Maoist thinker, Kobad Ghandy, from the Visakhapatnam Central Jail where he is currently lodged. He started writing it in Hyderabad Jail and completed it at the Visakhapatnam Central Jail. We have already carried its first part (Evolving New World Order) in Mainstream (September 16, 2017); the following is the second and concluding part.

Part II : India’s Growing US Dependency and the Spirit of 1942

India and the Spirit of 1942 

On this 75th anniversary of the ‘Quit India’ Movement, the Prime Minister declared: “Reignite the spirit of 1942.” Nothing could be closer to the truth. But what exactly was that spirit then; and how is to be understood in today’s situation?

The entire freedom movement was based on Dadabhai Naoroji’s ‘Drain Theory’ where he showed that the British robbed India’s enormous wealth, and reduced it to one of the poorest countries of the world. When the British came to India, our country accounted for 23 per cent of the world GDP; when it left it was just three per cent.15 Though the millions who participated in the ‘Quit India’ satyagrahas, the lakhs of workers who went on strike, the revolt in the Royal Indian Navy and last, but not the least, the great INA rebellion, may not have known the ‘Drain Theory’, they wanted to end British loot and kick them out. What they realised was this ‘loot’, this ‘Drain’ was the major cause of their impoverisation.

What then is the “spirit of 1942” today? The bulk of the political class gives some new interpretations, but the essence seems to have been best captured, surprisingly, by Patanjali advertisements, the Rajya Sabha’s film on the INA, the people of Tamilnadu who boycotted Coke and Pepsi, and the numerous swadeshi/swarajya groups. Patanjali advertisements continuously say: “Similar to the East India Company, the MNCs that loot our country, control approximately Rs 50 lakh crores of the Indian economy... Boycott goods by foreign companies.” Rajiv Dixit’s CDs sold (I am told) in Patanjali shops explain the details which I will touch on later.

So the ‘Drain’ still exists, only its methods have changed. Then it was the British; today it is primarily the US. Then it was through tax, rent and crude capture of Indian markets by cutting off the thumbs of weavers; today it is indirect and invisible through profiteering, currency/interest manipulations, high levels of corruption (with crores flowing to tax havens) and a subtle capturing of Indian markets by the ‘Digital Moguls’ of the US, arms companies, nuclear energy companies and a host of others. The Drain may be even more than in British times resulting in increasing impoverisation with each passing day on the one hand, and greater and greater dependence on the US on the other. No wonder India is ranked 97th amongst 118 countries in the Global Hunger Index, 2016; India dropped from 130 to 131 out of 185 countries in the Human Development Index, 2016; it dropped from 117 to 122 in the World Happiness Index, 2017; on the health front India is 143rd among 188 countries, and ranked 130 out of 155 countries in the UNDP Gender Inequality Index.

After 70 years of independence, India is on par with countries of sub-Saharan Africa, with 58.4 per cent of its children under five anaemic, 35.7 per cent underweight, 38.4 per cent stunted and 21 per cent wasted (Family Health Survey report, 2015-16). This is a result of malnutrition where rural India consumes 550 calories less today than in 1975 as per the National Nutrition Monitoring Bureau report of 2015. The massacre of 70 children in a Gorakhpur public hospital due to corrupt practices in just five days (August 7-11, 2017) is only the tip of the iceberg of what our children face.

On the other hand, the richest 57 billionaires have the same wealth as the bottom 70 per cent. This is over-and-above the huge amounts flowing abroad through legal and illegal means to the MNCs and tax havens.

These contrasting pictures of the poor and the super-rich is the essence of today’s ‘Drain’. And if the spirit of 1942 has to be invoked today, it is to end this ‘Drain’.

And if this drain is to cease, the key factor is to break the chain that incresingly tie us to the West in general and the US and their collaborators here in particular. India is being reduced to a slave of the US with no dignity and self-respect in the community of nations. Even rats desert a sinking ship—the US’ biggest puppets like the Phillipines, Turkey and others kicked the US out when its greed and domination became intolerable.

But not in India; even if they spit in our face, we quietly swallow it, duped by the praise they shower on our leaders—how tolerant we are! India is one of the few countries left in the world that has gone deeper and deeper into the US quicksand ever since Manmohan Singh started the process in 1991-92 under the smokescreen of reforms. This is fraught with great dangers specifically in the emerging international scenario, with US/Western economies in stagnation.

Danger No. 1

: They will squeeze the last paisa out of the blood of the Indian people to recover their declining profits in this crisis situation. The Indian taxpayer is being made to pay huge amounts for outdated defence and nucelar equipment; that too at highly inflated rates. So while the indigenous Tejas Light Combat Aircraft has been rejected, India has signed a deal for 70 outdated F-16 fighters in a Rs 60,000 crore Tata-Lockheed production contract which will help revive Lockheed. In fact, the Defence Ministry has barred Defence PSUs from bidding fighter jets and helicopters and asked our Ordnance factories to exit from production of 87 items.16 Already, India is dependent for 65 per cent of its defence supplies on foreign companies. This is set to increase with the Government of India set to purchase items like rifles, tanks, submarines and of coruse some 250 more fighters from abroad—all this worth over $ 60 billion—a bonanza for the crumbling foreign companies, but a disaster for our five Defence PSUs, four Ordnance factories, 50 DRDO laboratories and four shipyards and, of course, job creation in India.

Similar is the situation on the nuclear energy front. When all countries are doing away with nuclear energy, this government has decided to set up 10 nuclear plants. Already it has struck deals (as three times the cost of indigenous reactors) with the bankrupt companies Westing-house (US) and Avera (French). It is also all set to breathe life into the Japanese giants Toshiba, Hitachi and Mitsubishi which are languishing due to lack of nuclear plant orders. When all these countries have themselves discarded nuclear power for solar/wind power which is cheaper and safer, India will be spending thousands of crores of taxpayers’ money to buy such outdated and discarded equipment.

These are just two examples which infringe on our national security and environment, where the West, due to its own crisis, is dumping outdated goods and equipment in India—either as outright sales or in collaboration with a handful of Indian corporates—but at the cost of our people and country; in fact, at hugely inflated costs.

Danger No. 2

: the US, EU and Japan are flush with funds due to QE and US companies having huge surpluses desperately searching for markets. Just in 2016 America Inc. had cash surpluses of $ 1.7 trillion.17 With interest rates in their own countries near zero and local growth stagnant, all this enormous sum of money in the form of FII and FDI is desperate for markets—and is flooding India with our government guaranteeing big returns.

So, for example, Venture Capital Warbarg Pincus has recently invested $ 4 billion in over 50 companies in India (including PVRs); TPG Capital has bought out our major healthcare chains Fortis and Manipal Health Enterprises; Tigher Global and Softbank controls Flipkart, Larfarge (French) has taken over ACC and Ambujam Cements; FIIs have a controlling interest in Infosys and many other companies, while British Petroleum has a major stake in Reliance. The bulk of the 10,000 Start-Ups are funded by US Venture Capitalist or Private Equity firms. All such investments hardly create any jobs; in fact rationalisation that follows takeovers generally results in job losses. So, while such huge investments infringe on national sovereignty as profits will now flow abroad (the Drain), it gives nothing to India in the form of job creation or anything else. As a result India has been losing jobs rather than creating them. According to the CMIE, 15 lakh jobs were lost due to demonetisation, and according to the Labour Bureau data, 1.6 crore people became jobless in the first one-and-a-half year after Jaitly became the Finance Minister.18

Danger No 3

: Enter the US ‘Digital Moguls, the new ‘Robber Barons’ of this age. While they had already made major inroads into India before demonetisation, these US giants were in crisis due to a saturated US market, their inability to compete in China (the world’s largest market) due to powerful local brands and Europe having strict cyber laws (as witnessed by the recent EU fine of a mind-boggling $ 2.7 billion on Google for breaching EU anti-trust laws), the huge Indian market was the only option left. But with coverage poor to increase thier market it required a major push from the government. This was forcibly achieved even beyond their expectations by first demoneti-sation, then linking nearly every activity to Aadhar and finally GST which will force all business and trade to computerisation. Over-night the market for these US IT conglomerates has increased a thousand-fold in India. But at what cost to the country?? All three steps are destroying all our small and medium businesses and traders, not to mention the farmers and harrassment of the middle classes. And with having poor cyber law and regulation and overly zealous pliant officials, these companies are all set to squeeze the last drop of the Indian people and run away with monopoly profits. And unlike China or even Iran, there are no Indian servers or e-commerce companies to compete and prevent monopoly profits.

This is precisely the high levels of loot to be expected in times of crisis, and unfortunately unlike other countries which refused to acquiesce to their threats, the Indian rulers have gone overboard to welcome them.

Let alone welcome them, the government has employed (no doubt at huge cost) US hatchetmen to devise Indian policy (NITI Aayog) and even to implement it (PWC). Never before in the history of independent India has a person from a US university been so instrumental in devising all the above policies. Arvind Panagariya used only his leave time from Columbia University to head the NITI Aayog and fled back to the US since his leave was over—yet it was the Niti Aayog majorly responsible for all the above-mentioned disastrous policies.

And now the government has appointed a giant US auditing company, PWC, not only for implementation of key projects (like SMART Cities, Digital India, Make in India etc.) but also to investigate black money and even audit the RBI accounts. Incidentally, it was this same PWC that helped Satyam, Vijay Mallya and others cover up their black money trail.

Thus weakened as a nation, India has little respect in the community of nations. On all foreign trips India only gives but takes nothing in return—Rafels, F-16s, nuclear energy deals etc. etc. Quite obviously the Western countries’ leaders and CEOs are thrilled by the huge orders given to them in difficult times. But when it comes to India’s concerns—Pakistan issue, H-IB visas, restricting Indian drugs etc.—not a word is mentioned.

Besides, after LEMOA (a de facto military tie-up) was signed with the US, and India immediatley cut gas purchase from Iran by 20 per cent in spring this year, India is more and more seen as the voice of the US. Sometimes it seems to be more loyal than the king by its absurd boycott of the BRI Conference even though it is a full member (now) of the SCO and an Indian is the chief of the AIIIB.

Besides, its major and single most important foreign policy issue—the isolation of Pakistan—is a dead letter. Its main Arab allies like Saudi Arabia and the UAE have sponsored a Sunni NATO of 41 countries, with Pakistan as not only an important member, but Pakistan’s ex-Army Chief as the Commander-in-Chief of this Islamic Military Alliance. And while India is baying for the blood of Zakir Naik as a terrorist, issuing a red-corner notice, he is getting VIP treatment in Saudi Arabia, Indonesia and a host of other Indian ‘allies’. He is openly travelling and broadcasting from Saudi Arabia, the UAE, African and South-East Asian countries. (These Arab countries even put an ‘Asian Premium’ on oil sold to India.) Even the US has continued (though reduced) its military aid to Pakistan. Even worse, Russia, which till recently had no relationship with Pakistan, has forged a strategic alliance and conducted joint military exercises with it. It is clear that few are listening to India’s anti-Pakistan concerns.

Iran strongly retaliated to the cut in oil/gas imports by India by 20 per cent (instead it is buying 5.4 million barrels of the far more expensive shale oil from the US) by raising the price of gas to India, giving to Gazprom the Farzed-B gasfield which the ONGC was desperate to get, and is even considering diversifying India’s involvement in the Chabahar port by inviting China. So again, the Indian people have to face gas-price hikes because of the government foolishly bowing to US pressure.

Even in South Asia, India’s backyard, after India unilaterally de facto dissolved SAARC last year, all countries—and not just Pakistan—are drawing closer to China. Even Bhutan, an Indian protectorate, is surprisingly silent on the India-China stand-off involving Bhutanese territory. Not a single country in the world has sided with India on this stand-off with the Chinese —not even the US, whom it goes out of its way to please—all are silent, not willing to take sides.

At a time when the US is a declining power, for India to put all its eggs in the US basket is not only foolish but also suicidal. Foolish, because it makes more sense not to side with a declining power (or remain neutral), when stronger economic powers who have the ability to give and not just extract from our country exist. Suicidal, not only because it is resulting in isolation diplomatically, but because it is squeezing the people of even their limited liveli-hood, in order to satiate the unquenchable thirst of the US conglomerates. And, with every step into the US quicksand, we are getting sucked in deeper and deeper, making it more difficult for us to extricate ourselves. What is even worse, India will be used to act as a US hatchetman against anti-US regimes in the region as other puppet regimes.

Today, to live with dignity and self-respect in the community of nations, we need to discard that servility and stand up as a nation in its own right. We need to inculcate the true spirit of the ‘Quit India’ Movement, and not throw to the wind all what our forefathers lived and died for. The need of the hour is for a true swadeshi movement, genuine swarajya and an agenda to build a true self-reliant economy with an independent foreign policy. Let us stand up for our rights in the community of nations and our right to equality in the face of racism and degrading slave labour.

On this 70th anniversary of Indian indepen-dence let us all together put forth a new agenda of true swadeshi, swarajya and self-reliance by:

• giving top priority to agriculture, SMSEs, health and education at the Centre and in States;

• scrapping the massive hike in tax on basic commodities and cottage/indigenous pro-duction imposed through GST;

• preserving the environment—that is, Jal, Jungle, Zameen;

• scrapping subsidies to the big corporates and recovering NPAs by selling their assets;

• revoking all the big foreign contracts and deals;

• preventing forcible digitalisation of the economy and reversing steps that seek to impose it;

• kicking out MNCs and punishing their collaborators;

• and last, but not the least, rooting out corruption in high places and giving back to people the black money looted from them— whether in India or abroad.



15. ‘Era of Darkness’ by Shashi Tharoor.

16. Open, February 27, 2017; EPW, June 2017.

17. Outlook, March 20, 2017.

18. The Hindu, August 6, 2017.

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