Capitalism is the Crisis (Part II)

Corruption, corporate power, inequality must all be curbed
September 1, 2012

India's poor rural majority has benefited little from the country’s economic boom, and in fact has seen its position worsen. The same pro-free-market economic reforms that have made India attractive to Western capital and benefited the urban-based middle and upper classes have increased the impoverishment of the rural population which comprises about 70% of the country’s inhabitants -- or 700 million people, of whom as many as 400 million are now landless. 

These economic reforms were initiated in 1991 by the Congress Party government of Narasimha Rao, whose finance minister, Manmohan Singh, is the current prime minister. The reforms lowered tariff barriers, deregulated industrial operations, privatized state enterprises, and facilitated foreign investment. In agriculture, government subsidies were cut for irrigation, fertilizers, and electricity, and credit from state banks was tightened. The prices of agricultural inputs rose steeply, and this, combined with the flood of cheap food imports into Indian markets, bankrupted thousands of Indian farmers, driving an astounding 270,940 of them to commit suicide between 1995 and 2011.

Vandana Shiva, director of India's Research Foundation for Science, Technology and Ecology, calls these suicides "genocide," and adds: “While being presented as an economic power and the new poster child of globalization, India now is the home of one-third of the world's malnourished children [the largest number]. And the problem of hunger will grow as more peasants are pushed off the land." India is home to about half the world's hungry people, and close to half of all its children under five are malnourished or stunted. More than 50% of Indians are forced to live on less than $1 a day.

Rajagopal PV is the leader of Ekta Parishad [EP--Unity Forum],  a national organization in India and the largest people’s movement, which is focused mainly on land reform issues. EP was created in 1991 and in 2007 organized a march of 25,000 people to New Delhi (India’s capital) where they demanded and were given land for 1.2 million people by the government.  In October 2012, EP aims to bring 100,000 people from all over India to New Delhi in order to demand comprehensive land reform. 

As the movement puts it, “The structural change that Ekta Parishad is calling for is a complete land redistribution to enable the marginalized and downtrodden, to get out of poverty.”  Rajagopal was recently interviewed in India for my forthcoming radio documentary Capitalism is the Crisis.  

What is the main cause of the poverty of Indian farmers which is causing hundreds of thousands of them to commit suicide?

Rajagopal: The government discriminates against farmers in many ways and so ultimately they get frustrated and commit suicide.  There is a total official neglect of agriculture and agro-industries. All these crops such as cotton can be converted into products, in this case clothes, using cottage industries.  Now, after the arrival of globalization, we have lost agriculture and we are also losing village industries. Ultimately, we are left with nothing and therefore the farmers are committing suicide.  So it’s a huge crime that the government is committing.

On the other hand, there is a craze for industry, so all resources are being diverted to it, including water. All the dams constructed in order to irrigate the fields of farmers have been diverted to industries. The cities are becoming bigger and demanding too much water. And with water being a main source for making our farms successful, farms are failing across the country. So when the government is not ready to support agriculture, this is what will happen. Farmers will lose interest in agriculture and start selling the land, and finally end up in slums. 

When they find their crops failing every year and they are not able to repay their loans to the banks, they commit suicide because in India it is a social stigma to be in this position.  In the state of Kerala, for instance, your bankruptcy is publicly announced by men beating drums in front of your house.  If this happens to you, your daughter will not be married, people will not invite you for any function, everybody will ignore you and disassociate themselves from you, and you will feel very isolated.  

To what extent is capitalism, foreign and domestic, responsible for poverty in India?

Rajagopal: This trend of promoting capitalism at the cost of Adivasis [indigenous Indians who number 60 million], Dalits [also called “Harijans” and “Untouchables”], fisherfolk and nomads and all the poor people of India is basically responsible for creating so much poverty and discrimination. Poor people make a living by using natural resources. The fisherfolk depend on water for their living. If you let the trawlers take all the fish from the sea, there’s nothing left for the fisherfolk.  Adivasis live in and near forests, so if the government converts forests into wildlife sanctuaries and national parks and promotes tourism, then the Adivasis have nothing to depend on. 

Farmers live on land and, when the government sets up “Special Economic Zones” [SEZs] and takes the land of the farmers, forcing them out and giving them some money, they also get marginalized. So this policy of selling all the resources of the country, whether it is water, mountains, forests or land, has created a lot of problems for poor people and is creating greater marginalization and poverty. 

The contradiction is that, at the international level, the Indian government commits to fighting poverty and to reducing or eradicating it by 2015; that is the Millennium Development Goal.  But the government’s actions are the opposite to the achievement of this goal. There is increasing poverty in India. In the last 20 years, after the arrival of globalization, we have more and more people migrating from villages to cities. We have a larger number of people committing suicide. We also have a trend whereby we have more and more districts controlled by violent groups, almost like private armies. So we have created not only poverty but also a huge quantum of violence in India, and this is directly affecting the democratic space because people cannot operate freely in those regions. Even social movements are finding it very difficult now. So we create poverty, violence, migration, more slums, and also problems for democracy. The promotion of capitalism is responsible for all this.

By ignoring the masses we are promoting a select group of people and encouraging them to make profits, and that is how we want to show growth. With this strategy, we are making a great blunder. Capital needs to be used in the interests of the masses, and not for a select group of people because they are very powerful.            

Please tell us more about “Special Economic Zones” [SEZs].

Rajagopal: The idea began in China, but there they only have a few dozen SEZs. In India we have hundreds. It involves reserving a large area of land for industrialization, allegedly to create employment. But this land is not always used for industrialization. Much of the land is used for five-star hotels. In many cases, the SEZs have their own security and are like a small country within a country.

Unionization in SEZs is very difficult and, even outside the SEZs, unionization in India generally has become very hard because the conditions of foreign corporations for investment in India are that they should get cheap land, enough electricity, and there should be no trade unions that block their activities. So trade unions have become really, really weak in India. 

The foreign corporations take land and privatize the underground water by drawing it, so all the surrounding land becomes dry; they also create a lot of polluting smoke so that more land is affected and people vacate this land, sell it and leave. We have official pollution control boards in India that are supposed to cancel the permits of those industries that pollute too much, but this is not happening. If you travel through the states of Chattisgarh, Jharkand, and Orissa, you will see how many industries are polluting the entire area.  Everything is black. The rooftops are black, as are the trees, the vegetables, and the paddy fields. You can see that these areas are completely polluted and people cannot live there. The pollution control boards do nothing about this. 

If you have an industrialization process in a highly corrupt system and country, then this is what will happen.  Corruption will increase because all these corporations want the freedom to pollute as well as extract water and other resources.  All kinds of illegal things are happening because it’s a corrupt country. The victims are ordinary people and, in India today, the poor people are being victimized in a big way whereas some people are making money and all the laws of the land are being violated. 

What is the most effective way of reducing poverty in India, especially that of farmers?

Rajagopal: India is basically rural, with 70% of the people living in the countryside [about 700 million people]. Poverty eradication in India can happen only by land redistribution.  That’s a major area; I am not saying that it’s the only one.  Agriculture and agriculture-based industries will be one big area through which you create large-scale employment and help eradicate poverty, but that will happen only when you have a policy shift in that direction. 

Agrarian reform will mean giving land, helping farmers to cultivate the land properly and make a living out of it, creating a fair market system that will take the surplus produced by the farmers and pay them a reasonable price. 

About 8% of Indians [mainly indigenous Indians or Adivasis] depend on forests for their livelihood. They should have the right to collect forest goods and sell these in the market while protecting the forests at the same time. These people are not part of the competitive market system. They love and worship the forests and mountains, and live accordingly. Then there are a large number of fisherfolk who should have rights over water sources so they can fish. The right policy would link natural resources with the hard-working labour force of India. People who are hard-working need to get control over resources. Human resources and natural resources have to come together in order to reduce poverty. 

For this we need decentralized planning. At the moment, all planning and decision-making is centralized, with often negative results. In India, the government is visible only when it comes to punishing people. Officials are sent to villages only for this purpose. I have never seen any official go into a village to help solve the problems of the people. It’s always the punishment-centric, anti-people attitude of the system that prevails, and this needs to change radically if India is to escape from its present national plight of extreme poverty and inequality.

(Asad Ismi is the CCPA Monitor’s international affairs correspondent. He is author of the forthcoming radio documentary “Capitalism is the Crisis.” This is the second of a series of articles on this topic. Many thanks to Chandra Siddan for conducting the interview with Rajagopal, with questions provided by the author. For Asad’s publications visit