Covid crisis shows capitalism offers Indian working class no future – Part1

In India the corona crisis has cast a harsh light on the cruel reality of capitalism in the country. For millions starvation is now a real threat. The ‘great revealer’ has exposed the rottenness not only of the pro-capitalist politicians and parties, but also of the existing so-called left parties. The communist parties have accelerated their decades-long retreat from offering a programme that can aid the working class in organising struggle against the crushing of their living standards, and the attempts to divide them and undermine their potential mass strength.

Covid-19 related deaths and the disease’s impact on millions of lives in India are grossly under-reported. Even so the official figures show that over seven million have been infected and over 100,000 have died so far. India ranks among the top three worst-affected countries in the world. The privatised health sector has made the crisis much worse for workers and poor people. Patients can be charged anything from £1,800 to £10,000 per day for treatment. This in a country where the average male wage in an urban area is under £7 a day. In rural areas it is an abysmal £1 a day. This does not include half the population of India who are not part of the regular salaried work force – estimated at 47.6%.

The poverty and rotten socio-economic conditions in India have made the crisis worse. The government’s policies are a factor in the worsening situation. Well-known economist Jayati Ghosh pointed out that “the most destructive effects of Covid-19 in India have not been the result of the disease, but the nature of the government response.” She points out how the brutal lockdown was done made the majority of workers much more vulnerable to disease in general, let alone Covid-19. In India, 95% of all workers are in the informal sector. Low-waged workers – one third of the urban population – are crowded into conditions where social distancing is a luxury.

Initially, tens of thousands of urban workers were forced to gather in large groups in a desperate attempt to return home. The conditions were so bad that more than 100 workers died on train journeys back home. Many were stuck without food, shelter or any means of transport to return to their homes. Not only were they were denied food but also brutally attacked by the police. Over 90% of the migrant workers did not receive their wages during the lockdown and 96% did not receive any food rations or cash handouts.

The authorities closed down infected households – at times sealing off the doors with wooden boards marked ‘corona’, effectively imprisoning families inside and worsening the stigma attached to the disease. Therefore the combination of fear of being outcast, high medical fees, etc., meant tens of thousands have not been tested despite experiencing strong symptoms. For the owners of small businesses, street vendors and daily wage earners, lives have been shattered completely.

Returning to their previous role for many or even most of the more than 140 million who lost their jobs is just a dream. Decades of neo-liberal reform have shattered farming, which previously sustained a significant rural population. Those who were forced to return to rural homes are pushed back into further penury with no hope of improving their lives. In effect, starvation is becoming a pandemic that is capable of killing more people than Covid-19. Though proper statistics do not exist for this year, death by hunger is becoming widespread. The year 2019 registered the highest suicide rate in India for a decade with over 100,000 killing themselves, particularly in rural areas. This year it is likely to be higher, including among workers. Stress-related deaths, including through alcohol abuse, are also on the increase.

These deteriorating conditions are further flaming the already existing divisions, particularly on gender and caste lines. Women, who bear the brunt of the deterioration in living standards, have been stripped of any economic independence that they may have had, and are further pushed back into situations where feudal family ties dominate their lives. The stigma linked to Covid-19 is being used to legitimise caste-based discrimination and violence. Attacks against the most oppressed Dalits and Adithivasis increased by 72%, according to some reports.

The government claim that it is spending 10% of GDP ($266 Billion) on Covid-19 relief proved to be utterly bogus propaganda. This amount includes $22.6 billion that was already spent for the initial stimulus package of cash transfers of £10 for 30 million elderly, £15 for women in rural areas and for providing food rations for some of the people . This, of course, had no impact due to its minuscule scale. A new package, however, had no intention of improving on this, and rather was aimed at bailing out big and medium-sized businesses. Even the loans made available for medium-sized businesses were not taken up as many went bankrupt. They don’t have any way of restarting. A significant sum of this amount will not be spent on workers or the poor, or on improving market demand, but rather will simply be “available” to borrow for businesses. The main beneficiaries are big businesses, including through the writing off of the “bad debts” of the big capitalists, who have been the priority of the Modi government throughout. Even the chief minister of Telangana, K. Chandrashekar Rao, who called for shooting down the people who break the lockdown curfew rules, called this package 100% bogus and said: “It is nothing but cheating, deceiving and a numbers game”. The actual value of the package is believed to be less than 2% of GDP – the lowest for any Asian country.

In addition, Modi wasted no time in “using the crisis” to launch an attack on rights of labour, farmers’ and other democratic rights. Under the new industrial relations code, small firms no longer have to follow any guidelines in sacking workers or in the conditions they provide. The new laws, in some circumstances, also make it impossible for workers to be part of a union or to form a union. With few exceptions, almost all the labour laws in the country are to be changed in the interest of the capitalists. One of the brutal attacks on farmers and agriculture came in the form of the agriculture bill passed by the parliament in October. This bill removed any price protection and protection against hoarding that farmers had – i.e. all of the gains that previous generations had secured. It will allow big food corporations, multi-nationals and supermarkets to be directly involved in deciding how food commodities are produced and prices fixed. These bills removed any state intervention in the purchase of land and relaxed regulations needed to protect the environment before setting up industries. In effect, the Modi regime has made it easier for the capitalists to loot and plunder the natural resources of India without any benefit for farmers. This has now led to countrywide protests and anger among all sections of society. Even the minister for the food processing industry in the Modi government resigned, stating that the bills are “anti-farmer”.

In addition, privatisation of parts of the railways, defence sector, banking sector, etc., has now been accelerated. In August, the foreign direct investment (FDI) policy was also changed to allow foreign companies to have direct control of a number of sectors including coal mining. This had been impossible for the Modi government to enact before Covid.

Despite these neoliberal offensives, none of the bold predictions made by the Modi regime have come to pass. The economic survey published in January prior to the budget predicted over 6% growth, and the Chinese model of “Assemble in India for the world” was promised. But unemployment has instead reached an historical high and now the growth in manufacturing has come to a halt – if it is not already declining. Major auto-manufacturers, from Maruti to Tata Motors, have shut down many factories. Samsung, LG and various other tech industries have also enacted closures. The FDI came mainly from the investment in the service industry and from the social media multinationals, such as Facebook, Google, etc., from the US.

The Modi government’s hopes of benefiting from the de-coupling between the US and China has not materialised. India simply does not have the infrastructure or manufacturing base to replace China to become an assembling hub of the world. Providing much lower wages and even greater opportunities to exploit India’s labour with no restriction, on its own will not be sufficient. India cannot match the Chinese state in its ability to invest in large-scale infrastructure projects and in developing supply chains. Instead, construction and manufacturing have contracted significantly, contributing to the historical shrinkage of GDP by 23.9% in the second quarter of 2020. This major contraction is not just down to Covid-19 as the Indian economy was heading towards recession even before that. There will not be an automatic return back to growth let alone a “bounce back much faster than in the past”, as Ila Patnaik, a former economic adviser to the government, argues. She is wrong in assuming that the recession was caused “solely by a pandemic” and that after lockdown the recovery will be faster.

There is no sign of an end to the Covid-19 crisis as some expect a third wave to hit by mid-2021. The Indian government is attempting to prepare the population to put up with death and destruction, on the basis that keeping the economy open means greater hope of reviving it. But this will not result in a speedy return to normality – that is impossible, meagre as that ambition is. The small bounce-back we may see will be temporary, as the economic crisis is much deeper and connected to a lack of demand in general and the global crisis of capitalism. Manmohan Singh, former Prime Minister and the person responsible for opening the Indian economy for neo-liberal plunder in the 1990s as finance minister, believes that India can borrow its way out of recession. Taking the Pakistani road to become a debt-dependent economy will further devastate public services and living conditions that are already falling apart. As the recent CWI statement pointed out, these measures proposed by capitalist governments cannot resolve the underlying causes of the crisis. Particularly in the neo-colonial countries, massive class polarisation has already devastated the conditions for workers and poor people. More borrowing, which is likely to happen, will be paralleled with increased attacks on work and living conditions. This will further increase the lack of demand that is mounting. Kicking the can down the road with the hope of recovery “sometime in the future” has not helped even the major economies like the UK that now have a larger debt than the size of its economy. Even those promoting “borrow now and worry about the future tomorrow”, admit that it will worsen conditions, maintain unemployment and decrease overall economic output.

Part 2 Will be published tomorrow.

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