While there is undeniably an economic boom and growth in India, it only really touches the 3% of the best off. The fact that 52% of the Indian children are malnourished shows the hugely unequal character of the boom. The poorest sections of working class are made to suffer. A major portion of their hard-earned meagre incomes are spent on rent, electricity, fuel and other daily needs. They only can afford one full meal a day.
The situation in rural areas is far worse because of the bleak situation in the agriculture economy. Peasants go to the cities in search of some work. But they can only work in the construction sites or as domestic helps, where they earn less than a dollar a day.
India has changed since the advent of aggressive neo-liberal ‘reforms’ of the 1990s. It is claimed the masses benefited from these reforms. Yet, only rich people’s life-style and living standards changed. But the real issues are who and how many are gaining from the growth? The National Sample Survey Organization estimated poverty in India declined by a mere 0.74% during the 11-year period that ended in 2004-05. Furthermore, income disparities are widening.
In January 2007, even according to the government figures, the price of pulses were 25% higher over the previous year, oil-seeds 21% more, cereals 9% higher, and food, as a whole, almost 9% more expensive at the wholesale level. The official inflation rate went above 6%, earlier this month, compared with 3.6% for the same period last year. This is a drastic situation for working people.
Millions in terrible conditions
Because the IT industry in India is booming, many shopkeepers charge prices that may be affordable for the relatively high waged call-centre workers but which most people cannot afford. All basic goods and commodity prices have gone up. But even supposedly high-waged government employees, and other trade union-organised workers, cannot pay for many goods. Due to ‘liberalisation’ and globalisation, since the 1990s, price rises hit the poorest much far worse. As a result, most Indians have less to eat. Economic growth boosted profits and earned more income for the rich but for the working class it depresses real wages and creates more inequalities.
According to the Indian Planning Commission, many more workers are now in non-union sectors, like garment making, and other private firms, where cheap labour is ruthlessly exploited. Their wages are very low. They face huge price hikes and no guarantee of work.
The government is under pressure from big corporations to change labour laws, to allow more retrenchment of the existing labour force and to make way for cheap labour. This kind of ‘boom’ will only create jobs for the highly educated and profits for the rich. For the poorest workers there is no job security.
Most economic growth takes place in the service sector, which needs college educated workers. But India spends a mere 3.8% of its GDP on education and 46% of the over 15 years old population is illiterate. With 388 million children under 15 years, India is facing a major challenge in education. 54% of adults in India cannot read or write. These stark facts tell the real situation in the sub-continent.
How many youth can afford education, when they cannot afford one meal a day?
Today, the nature of investment by the big corporation is capital intensive, especially in the high return areas, such as the service sector. But the amount of jobs created is meagre. In total, the IT service sector created less than one million direct jobs.
How to explain the boom?
The continuation of the one-sided boom is a legacy of brutal liberalisation and linked to the world economic situation, the domination of multinational companies and their practices. India is plagued by high levels of peasant mortality rates, mass unemployment, low wage levels, and a huge gap between the rich and poor. While the rich becoming richer, we also see the most exploited and downtrodden class getting poorer. This suffering and exploitation will steel them to struggle and to fight back. They witness this boom with horror. The working class and poor will overthrow this rotten system. Things are not going to remain the same. Socialists in India must explain to the working masses why they are super-exploited and build an effective, militant class alternative to capitalism.