20 YEARS OF GLOBALIZATION:
STOP THE ECONOMIC AND ANTI-LABOUR REFORMS BASED ON LPG AND PUBLISH A WHITE PAPER
Our country is completing 20 years since Globalisation was formally launched in 1991 by the then Finance Minister Dr. Man Mohan Singh through his maiden budget. Since 1991 a series of law and policy reforms were introduced in the country to liberalise agriculture, industry and services. The old LPQ raj (Licence, Permit, Quota raj) was replaced by the new LPG (Liberalisation, Privatisation, Globalisation) raj which is against the constitutional mandate. It spread like a fashion among the intellectuals and the economists, terming themselves as “new Indian” and “global Indian”. Preamble to 8th plan said that globalisation will bring in jobs and erase foreign debt. Traditional idea of all-round ‘development’ was replaced by the idea of unidirectional or one sided ‘growth’. Instead of the traditional manufacturing sector, service, knowledge and corporate sectors together are the new engines of growth. Least importance is given to Agriculture and allied activities. India surrendered to capitalist countries by signing GATT agreement forming WTO.
India is described as the 2nd fastest growing economy. But Indian growth is now termed as “jobless growth”. Inflation has risen to a record height. India is still in stagflation i.e. high inflation but no job growth.
1/4th of Indian workforce is unemployed. Agriculture sector which gives 60% of the total employment showed a negative growth after 1994. Agriculture sector was grossly neglected by the successive Governments whether at the Centre or States. Hence it has become a loss making sector and farmers are becoming debtors. More than 2 lakh Farmers committing suicide has become a curse to the country. After the reforms, large number of small scale industries either became sick or remained closed. Governmental price controls aimed at stabilizing prices through government intervention do not allow derivatives market or forward trading to flourish.
India’s population constitutes one sixth of world population. But our poor population constitutes a third of the world’s poor. IFPRI’s (International Food Policy Research Institute) study on poverty elimination says India ranks 65th position in Global Hunger Index for 2009. In Global Human development Report of UNDP for 2010, India ranks 119th position out of 169. In terms of gender equality, UNDP’s Gender Development Index in 2010 ranked India 122nd among 138 countries. India has the world’s largest literate population. At the same time we have also 1/3rd of the globe’s illiterate population. Official BPL rate is 23% and APL is 77%. But the Unorganised Sector Enterprises Commission of 2004 has found just the reverse statistics. It found that 77% of the population of the country (836 million) has an average income of below 20 Rupees per day. NSSO Report says 55% have an income of Rs.12.5 per day.
It is alarming to note that India’s foreign trade which is the basis of the reforms, is day by day resulting in huge deficit. The foreign trade deficit which was 3810 crores at the beginning of reforms is now 1,84,279 crores. The proponents of globalisation had said that foreign capital would bring more jobs. But according to the Human Development Report, MNCs did not generate jobs as expected.
Labour scenario is also not encouraging. Job security and decent work have become forgone dreams for the workforce. Labour laws and social security laws are tried to be exempted in newly emerging areas like Special Economic Zones, Export Processing Zones, 100% Export Oriented Units, newly emerging IT parks, Textile parks, pharma hubs etc. Labour laws are poorly enforced. India has ratified only 43 out of the 188 ILO conventions and four out of the eight core ILO conventions.
The adverse impact of reforms on unorganised-rural sector is enormous. Unorganised sector contributes 60% of GDP, 68% of income and 60% of savings. The share of Organised sector employment in total employment has declined. When loss of employment and unemployment increased in organised sector, the burden shifted to unorganised sector. Unorganised sector has expanded from 92.07% in 1983 to about 94.1% in 2005. The share of unorganised sector is 53% in China, 44% in Brazil. Unorganised sector is associated with unstable jobs, poor pay, bad working conditions and less opportunities for advancement.
There is a worsening of the quality of employment. Increase in proportion of casual labour is generally treated as an index of deterioration in the quality of employment since casual employment is not associated with job security or other benefits. There is substantial wage gap after the reforms between regular and other workers especially contract labour. Only 1% of casual workers were covered under some type of provident fund scheme. According to the study of OECD and World Bank’s “Country Overview 2006”, inequalities have increased with wider wage disparities over the past decade in India and China.
Contractualisation process which is similar to bonded labour, has increased sharply. In many industries around 80% of regular employments have been converted as contract employment. Due to Structural Adjustment Programme, reforms, closure etc. there has been heavy job loss. In spite of all these, the incidence of strikes is generally on the decline in the post-liberalisation period i.e. after1991. The number of man days lost due to strikes has gone down substantially. Trade unions, especially BMS are the first to sense the onslaught of globalisation on the downtrodden as we are the most proximate social activists interacting close to them. Trade unions need to be more aggressive to increase their bargaining power.
Recent crisis has been the result of globalisation since only globalised and “opened up” areas due to LPG are most affected. Decades of deregulation policies and banking sector failure have been the major causes for the current global financial crisis. Stock market has been raised to a vital position in which it is treated as an indicator of the state of economy. Savings of common man including the pension fund of aged people are lost in the gambling. The capitalistic steps taken by many Governments to check the crisis failed as the steps are the same as that led to the crisis.
India is one of the least affected countries in the world. There were attempts to bring down the control of RBI over banks. Narasimham Committee reports I & II proposed strong de-regulation. But due to opposition from trade unions and other social organisations deregulation did not run amok in India. In 2008 April-May, again the Raghuram Rajan expert committee had recommended adoption of the speculative banking practices of the west in India. Further the Government tried to invest PF amount in risky and speculative share market. Neo liberal idea of SEZ even at the cost of human lives in Nandigram and Singoor was imposed by the Communist Government in West Bengal where it has officially accepted capitalism as the ideology. UPA Government’s aggressive move to conclude Free Trade Agreements (FTA) with Developed Countries including EU would have disastrous consequences on India.
Hence the 16th National Conference of Bharatiya Mazdoor Sangh held at Jalgaon, Maharashtra calls upon the Government of India to:
1. Stop forthwith the economic and labour reforms based on Liberalisation, Privatisation and Globalisation (LPG) and adopt a swadeshi approach for total development.
2. Take stringent measures to curb price rise including banning forward trading.
3. Stop forthwith and withdraw all measures taken on financial de-regulation, Banking reforms and opening up of banking and insurance sectors to foreign capital.
4. Universalise social security and welfare spending and packages should benefit the common man.
5. Instead of providing stimulus package to erring industrialists, allot more budget for social security schemes to all workers of our country, like health protection, pension, gratuity, unemployment allowance etc.
6. Withdraw ban on recruitment and creation of new posts and all types of austerity measures and savings on wage bill of the Government employees and public sector, and regularise services of all temporary employees, contract labour etc.,
7. Convene a round table conference of all those sections including trade unions that have stake in economic matters to discuss about the economic changes sought to be brought about.
8. Publish a white paper on the post-Globalisation scenario.
BRING BACK ILLEGAL MONEY STASHED ABROAD
The subject of illicit money stashed abroad has been under serious discussion for the past few years particularly after the last general election. In view of the issue being vigorously raised by the opposition parties, particularly BJP, the present head of ruling front also could not remain a silent spectator. It also added the subject in their poll agenda. In fact after the election the ruling party made a promise through the Presidential address on 4.6.2009 in the Parliament. But all these announcements seem to be an empty rhetoric, as nothing has been genuinely initiated. The Supreme Court is also vigorously pursuing the matter, in view of many public interest litigations including the one by Sri. Ram Jethmalani. Wiky Leaks, a popular website is also about to announce such names shortly.
Recently Prime minister and Finance minister have announced that names of Indian deposit holders of such money in foreign countries, can not be made public, in view of the legal hurdles. But such doubtful announcements can not be accepted by the general public, as the quantum of such stashed Money seems to be very huge. Prof. Vaidyanathan, Head of the Dept of Finance and Control at the Indian Institute of Management, Bangalore and a visiting faculty at Manchester Business School says that Indian black money, estimated to the tune of $ 1.4 trillion ( Rs 70 lakh crores) is deposited in such tax havens. Global Financial Integrity (GRI) studies show that an average amount of $ 27. 6 billion is going out every year from India. During 2002-06 a sum of $ 136 billion, was stashed abroad. But the ruling front is only trying to dispute the estimated quantum by saying “ The estimates like the one by BJP task force, which put the amount between USD 500 billion and USD 1400 billion and international estimate of USD 462 billion are based on unverifiable assumptions and approximations”. Without showing any real or keen interest to bring back such stashed money, they say the lame excuses like no legal frame available right now etc., Whether it is USD 462 billon (Rs. 20 lakh crores approximately) or USD 500 billon to USD 1.4 trillions, it is the prime duty of the Central Govt to bring back such stashed money to India, as our poor people need money for their education, drinking water, sanitation and other basic amenities.
The Govt is silent, as many of such possible depositors may be some of the unscrupulous of big politicians, bureaucrats (both retired and in service), big traders and big industrialists. One can easily presume that such silence is forced on the ruling front, in view of the following facts.
1. Germany, which could get the details of such deposit holders, by some means, was and is ready to give such details to any country, as announced even in the year 2009. Nobody knows the steps, taken by the Govt of India, to get back such deposited money, as it announced earlier that Germany had given names of such persons, who have such deposits in LGT Bank of Lichtenstein.
2. When U.S, Germany and many other continental countries could get the details from Swiss Bank called UBS, the largest banking institution in Switzerland, why not India, particularly, when Switzerland has very big investments in our country? The Govt of India should even go to the level of compelling Switzerland either to co-operate or face consequences. When U.S. could make UBS Bank of Switzerland to pay a huge sum USD 780 million as fine for its offenses, why not India?
3. It seems that Pakisthan is behind the act of printing Indian currencies and our country, particularly Kerala, becoming a prime location for converting black money into white money . In fact Prof. Vaidhyanathan said recently that our Finance Ministry revealed that an amount of 150 crore rupees, in counterfeit, was seized from a hi-profile person. No political leader has taken any serious step to know the details and tried to make it public. What is the action initiated by the Central Govt in this regard, as there is every possibility of terrorist money being floated in to our country.
4. Our Prime minister and Finance minister say that there is no legal frame available with us to get the stashed money abroad. What is the difficulty with present laws, including Money Laundering Act 2002 ? What is the difficulty in disclosing the names of such account holders?
5. We are part of Egmont Groups, which is an international body to stimulate co-operation among Financial Intelligent Unit ( FIU) across the Globe. Our F.I.U is competent to meet an important equipment of Financial Action Task Force (FATP) and our membership would facilitate and enhance the exchange of informations with others details. It seems that FIU – INDIA is in possession of huge data of cash transactions including suspicious one. What is the action taken by the Govt in this regard?
Prof. Vaidyanathan says that bringing back the trillions of dollars of Indian money, kept in tax havens like Switzerland is no difficulty. But he doubts whether the Govt has “will” to do it.
He also said that recession experienced countries like U.S initiated steps for the recovery of such stashed money of Americans in various Tax havens. We should not wait till recession touches our door.
Therefore B.M.S demands :-
1. The Central Govt should immediately announce the names of such Indian deposit holders of stashed money, since the people have the right to know the culprits. If such deposits are on benamy names, real beneficiaries should be identified and announced to the public. This is important, as the names furnished by Germany to our Govt were said to be benami holders. It was also learnt that some such stashed money holders, died without even informing their own legal heirs to enjoy the booty.
2. The Central Govt should take immediate steps to bring back such stashed Indian money, within a fixed time frame, even by enacting necessary legal frame.
3. The Central Govt is required to take stringent measures so that no further attempt in future is made by any Indian, to take away such money abroad.