GANDHI AIMS AT "NORMALIZATION" The most recent period in India has been marked by various attempts by the government to consolidate its position economically and politically. Virtually. complete industrial peace has enabled the bourgeoisie to increase production considerably. In turn, the government has offered the bourgeoisie a number of concessions in order to make the most of the situation. The bumper harvest and the negative rate of inflation, both of which have contributed to the relative quiescence of the masses, have enabled the government to take maximum advantage of the emergency and thus consolidate itself politically. The government's fundamental political project is to centralize political power and redefine bourgeois political norms. In the realm of foreign policy, the Indira Gandhi government has moved with remarkable speed and astuteness to normalize relations with its neighbors and has emerged as the key state providing stability in the subcontinental region. Industrial production excluding small-scale industries registered a growth of 5.6% during the year 1975-76. (The growth rate is on the order of 7% if the small-scale industries are included.) The major element stimulating industrial growth (which was only 2.5% the previous to working-class activity imposed by the emergency measures. Regardless of their annoyance at some "negative effects of the emergency, " such as "lack of democracy, " bourgeois commentators have unanimously hailed the increase of industrial production as one of the major achievements of the emergency. Industrial peace has indeed been remarkable. According to the Commerce Research Bureau, days lost in strikes declined from 17.1 million during the first half of 1975 to 4.46 million during the second half of that year. Days lost during the first four months of 1976 were 2.34 million, a decrease of 83% compared with the corresponding period of 1975. The industrial peace, coupled with the negative rate of 22
Indira Gandhi by S. BHAGAT inflation, gave the government enough maneuvering room to accede to most of the demands of the bourgeoisie in its March 1975 budget. (See I PRECOR, No. 51, May 13, 1976.) The credit squeeze has also been relaxed since the budget was adopted. There were cuts in direct taxation and excise reliefs for a wide range of durable consumer goods; excise relief was also granted on goods to those industries that produced an excess over the production of a selected base year; new licences were to be granted without the usual bureaucratic wrangles; import controls were relaxed; investment allowances were granted. All these measures have helped the industrial bourgeoisie's efforts to step up production. The government's basic approach to industrial development is in consonance with a World Bank report which isolated the basic problem as the narrowness of the Indian market. Recent trends in government policy also provide clear indications of the regime's economic thinking, which is that the key to further industrialization lies in intensifying the inequality of incomes and wealth in order to ease the problems of lack of markets for an industrial sector already marked by excess capacity. The creation of a. market for durable consumer goods ( the end products of industrialization) is the only way out for a bourgeoisie facing saturated demand for mass consumption goods like cotton textiles, barring radical changes in income distribution. Therein lies the basic cause of the crisis of the textile industry. Since the radical cuts in direct taxation decreed in the budget, the government has released incomes from dividends and has sought to counter potentially inflationary effects by further withholding of the impounded DA (Dearness Allowances) from the working class through compulsory insurance and compulsory deposits and through offering workers shares in industry's schemes. The result is further imbalance in incomes, but the problem remains nonetheless.
There are crises in the jute, automobile, textile, and some durables consumer goods industries as well. The textile crisis is illustrative of the sort of problems the government is facing. Textiles are the largest single component of Indian industry, accounting for 20% of the volume of total industrial production. Thus, a crisis in this sector has effects on the machine, chemical, and cotton-producing sectors. In its attempts to control the prices of essential goods, the government has insisted on large-scale production of cheap cloth at controlled prices, below cost. Thus, textile industrialists want one of two things - reduction in the production of controlled cloth (and possibly higher prices as well) or heavy retrenchment, including layoffs, in order to lower production costs. The government thus faces a dilemma: either weaken its anti-inflationary strategy or launch a direct onslaught against the textile workers, traditionally the best organized workers. Moreover, these workers represent an important base for the Communist party of India (CPI, the pro-Moscow CP), a party which has acted within the working class as the apologist for and advocate of the policies of the government. But even the CPI would find it difficult to play this role if massive layoffs occurred. The most likely alternative solution would be to grant subsidies to the textile companies, but this would not deal with the root of the problem. On the question of layoffs the government may be unsure of how to evaluate the importance of its support from the CPl versus the economic need for retrenchment. As far as rising prices are concerned, however, the government is quite conscious of the effects of inflation on the working masses. The wholesale price index began dropping as of October 1974, and there is no doubt that the bumper harvest of 1975-76 also contributed to the steep price declines. Thus, the wholesale price index dropped thirty points, falling from 310 to 280, beThis ch the from thing of the uffered by the woken tween October 1975 and March 1976. To a large extent, this offset the cut in real wages suffered by the workers This, apart from the emergency measures, must be considered a major factor in the passivity of the working class. Within this general context, the way the government has handled the situation of cooking oil is instructive. Although there was a record crop of groundnut, thus guaranteeing a good supply of oil for the coming season, an artificially generated scarcity produced an upward trend in prices. (The witholding of stocks by farmers and traders increased prices in general and pressured the government, via the black market, to raise its procurement prices.) Instead of going after the traders responsible for this, the government released some of its own stocks in an effort to bring prices down. In addition, a policy of importing oil has been adopted in order to build up buffer stocks for "peak periods." This sort of policy has not been restricted to cooking oil. It has also been applied energetically for grain, where the import policy, combined with the bumper harvest, has enabled the government to accumulate a reserve stock of 17 million metric tons. On the whole, then, government policy has been to assure an adequate supply of essential foodstuffs, importing them if necessary, and to hold prices stable. It is interesting to note that imports are being sustained at the expense of materials like steel. (India has now become a net exporter of
This policy of expediency, although temporary, is bound to have effects on long-term industrialization programs. The government's idea is to prevent the balance of payments deficit from worsening. And in fact the situation has improved during the past year, the deficit declining by about 1, 000 million rupees during the year 1975-76. In any event, the government is not especially worried about the balance of payments, since it presently commands healthy foreign exchange reserves. Because of incentives for non-resident Indians to deposit the ir foreign savings in India, reserves have actually doubled. But while the foreign exchange supply is no cause for concern, the reappearance of inflation has undoubtedly given the ministers concerned some sleepless nights. A clear upward trend had been noticeable since March 1976. By July the price declines of the earlier period had been offset by equivalent rises. Thus, in July 1976 prices were only 1.7% lower than in July 1975. But during the fifteen weeks ending July 3, 1976, prices had risen 8.1%, with the prices of food articles increasing 10.7%. Most bourgeois commentators attribute this inflationary trend to four factors: artificial scarcity of commodities; imbalance between supply (measured by national income) and demand (measured by money supply); high procurement prices due to effective pressure exerted on the federal government by rural elites acting through state governments; ihe parallel economy. We have seen how the government has timidly attempted to resolve the first problem. As for the second factor, the government has no choice but to continue printing more money and relaxing the credit structure because of its inability to mobilize sufficient domestic resources to finance government spending. The third point has been explained earlier. As for the fourth, simply related it amounts to this: Because of the range of fiscal and licencing restrictions, there is a possibility of garnering large untaxed profits by utilizing part of (undeclared) industrial capacity for the production of inputs and outputs to be sold to customers and industries whose own incomes in turn derive from participating in production and distribution in the parallel economy thus built up. This is an economy that produces a whole range of goods and generates incomes and profits that can either be ploughed back into maintaining the parallel economy (thus helping it to develop a self-perpetuating dynamic) or be ultimately expressed in conspicuous consumption, such as the purchase of land and the construction of palatial buildings and residences. This parallel economy serves to drive up the prices of land, materials, and various inputs and outputs, and this has an obvious impact on the general inflationary tendency.
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INDIA The state cannot view this untaxed and uncontrolled economy within an economy with equanimity. At the same time, the scope of potential state intervention is limited by the participation of all sections of the bourgeoisie in this parallel economy, for the profits are too large to be forfeited. In addition, the money generated in the parallel economy is a major source of funding for the ruling Congress party. Agricultural policy In the domain of agricultural production, the government has pinned its hopes on the strategy of the "green revolution, "aimed at bolstering production of crops other than wheat. The long-term strategy has not changed since 1969. This is revealed by repeated statements by government officials and bourgeois commentators that since it was possible to double wheat production in the five years following 1969, the same can be done with rice. In this context it is interesting to look briefly at the twenty-point program that has been the major axis of the government's agricultural strategy. This program can best be summed up as limited measures to strengthen capitalist development, limited social welfare measures, and liberal doses of well-publicized iokenism. Thus, we have seen some genuine efforts to eliminate bonded labor and other precapitalist relations, but the brunt of the measures to facilitate capitalist development lie outside the program. As noted earlier, the state has not acknowledged the failure of the "green revolution. " On ihe contrary, its policy reveals clear pieferences for intensifying income imbalances so as to enable investment by rich and middle farmers aimed at stimulating outputs. In other words, while the government retains its confidence in the green revolution, it promotes the twenty-point program largely as a social welfare measure, for example, granting consumption loans from rural banks, organizing well-publicized sharing of surplus lands, etc. In reality, even if projected land redistribution were fully implemented, it would cover only 0.25% of the total cultivated land area. The rural banks program is especially helpful in highlighting the bankruptcy of the twenty-point program. Rural indebtedness cannot be eased through imposing a debt moratorium unless alternative credit sources are provided at the same time. But the rural poor find considerable difficulty in obtaining the funds they need, despite the fact that the government has a nationalized banking sector at its disposal and has hailed the formation of rural banks. The village credit cooperatives are controlled by the rural elite. The resulting difficulties have been admitted even by the government. The funds that have been raised for consumption loans amount to a meager 17.5 million rupees, which fits in nicely with the government's strategy of increasing inequality and its anticipation of food shortages during the coming two to three years. Two alternatives are available to the government: 1) release the food stocks it has been carefully building up and simultaneously lower food prices, which would be tantamount to a permanent redistribution of income from the upper classes to the 24 lower; 2) release food stocks at the same or higher prices and provide consumption loans to the poor to buy grain, that is, loans that must be paid back with interest, which ultimately amounts to a redistribution of income from poor to rich. The latter strategy is the one that has been preferred by the government. Political consolidation The relative stability and the economic upturn have allowed the government to strengthen its political position. In fact, the past period has been one of consolidation of the rule of the Indian bourgeoisie and of further moves toward the redefinition of bourgeois political norms. The overall aim is to move toward further centralization in a country whose political history has been characterized by powerful centrifugal forces. All the various constitutional amendments essentially seek to provide a new set of rules for the coming period. The government has been quite astute in getting these amendments onto the statute books. The controlled press has been carefully used to give advance indication of government plans so as to gauge reaction and prepare public opinion at the same time. This in spite of the Corgress party's overwhelming majority in parliament and in spite of the emergency regulations. Basically, the constitutional amendments seek to widen the scope of repression and thus represent a logical extension of the selective repression previously carried out through the Maintenance of Internal Security Act and the Defense of India Regulations (repressive laws of colonial origin). The government wants to strengthen the executive first by further separating the executive and legislature and then by curbing the powers of the judiciary, which is supposed to provide an "independent check" of the other branches according to the "normal" bourgeois political framework. Ostensibly, this project is aimed at removing obstacles to the implementation of "progressive reforms. " But the real trend is toward a stronger state. The reforms are empty of content and the "fundamental duties" and "fundamental rights, " violation of which entails summary punishment with no legal redress, are so vague (for example, acting "against the common good") that any opposition by any individual, party, group, or association can be declared to be "communal, pro-caste, disruptive, "etc. The new "reforms" give the state free rein to declare any criticism of its policies, however mild, a violation of the consitution and hence subject to punishment. Centralization of state power has also been a prominent feature of the past period. The increase of the power of the federal government in relation to the state governments is a case in point. This is most clearly illustrated by the government's maneuvers in the state of Tamil Nadu. The successful imposition of federal rule over this state has been accompanied by a concerted campaign to erode the base of the DMK, which supports regional autonomy. The confidence the DMK had previously enjoyed has been shattered by revelations of corrupt
practices (real or otherwise) on the part of the DMK leadership. The central government now enjoys unprecedented prestige in Tamil Nadu, which further shifts the balance of forces against regional autonomist movements. This has even allowed the Swaran Sangh Committee to contemplate constitutionally curbing the powers of the regional states. The idea that agriculture should be under the jurisdiction of the central state has been floated, for example. This would have far-reaching implications for the balance of forces between the big bourgeoisie and the rural elites.
MPAIEN •OF • INDIAN OLITICAL PRISONERS RIPP There have also been attempts at vertical centralization of the trade unions through bringing them all under the umbrella of the Indian National Trade Union Congress (INTUC), the government-controlled union federation. The regime has repeatedly raised the idea of grouping the INTUC, the Hind Mazdoor Sabha (HMS, a union federation previously linked to the Socialist party but now controlled by the Congress party), and the All-India Trade Union Congress (AITUC, controlled by the CPI) under one umbrella structure. In its shortsightedness the CPI sees this not so much as an undermining of its trade-union base but rather as a means of gaining a protective cover for its own union. It has thus ardently supported the government proposal. Workers are also being urged to support projects of "workers' participation, " a not very subtly disguised method of helping management to raise labor productivity. At the same time, those unions that are against the government are facing a concerted attack by the unions controlled by the Congress party aimed at dislodging them from their base. The form this attack takes ranges from propaganda to actual physical assaults, depending on the local relationship All in all, the maneuvers of the government indicate that it is trying to define a certain role for the opposition. Since the left parties are out of the picture -the CPI being an ardent government lap dog and the Communist party-Marxist (CPM, an "independent" CP with leftist pretensions) leading a schizophrenic existence since the declaration of the emergency - these overtures have been aimed at the other parties. The most determined efforts were directed at the Socialist party, for two reasons. First, the SP has been the most outspoken opponent of the emergency; second, it was the key party in the potential emergence of any united opposition of the type Jaya Prakesh Narayan has been contemplating.
The SP was in that position mainly because George Fernandes, a trade-union leader regarded by the government as beyond redemption, was able to mobilize the SP in a campaign of satyagraha (non-violent civil disobedience), essentially a policy of courting arrests. All sections of the JP supported this action, but the failure of the campaign led to a depletion of cadre from the party's ranks and opened up internal divisions. The rightist faction, led by M.G. Gore, wanted all actions called off and pressed for a rapprochment with the government. And the government did make overtures in this direction. Trial balloons were floated virtually asking the opposition to participate in prospective fraudulent elections in January 1976. But Fernandes was able to recognize the trap, call for a boycott, and carry the SP with him. The government had to back off from an election. But the SP's shift in tactics in late 1975 from satyagraha to terrorism alienated many of the "rightist" SP members. In addition, the amateur manner in which the SP actions were carried out led to the erosion of Fernandes's support and ultimately to his arrest and the isolation of his associates. The government now realizes that the SP has no real strength and the prospect of a united opposition is dead. But this does not mean that the government has abandoned its project for a "controlled opposition. " It is essential to maintain a democratic facade that can act as a safety valve to channel future discontent. It is evident that the government is aware of the implications an upturn of the mass movement would have. The fact that the government is pushing its measures through not in response to current mass struggles but in preparation for future ones indicates that the bourgeoisie has grasped the lessons of a series of mass struggles (culminating in the 1974 railway strike) better than the leadership of the working class. Even though the railway strike remained under the hegemony of the traditional left and Social Democratic parties, it nevertheless represented working-class unity on a national scale for the first time in India's history. The potential was quickly grasped by the government, as was the danger inherent in a weak state. The government has since used the classic tactic of putting the petty bourgeoisie forward to buffer the thrust of working-class activity. The importance of preventing disruption within the petty bourgeoisie and of wooing it away from the Jan Sangh party (a far-right formation) and the Jaya Prakesh Narayan movement goes a long way to explaining the dual thrust of the emergency: against the parties of the right as well as against the working class. But in a country in which the petty bourgeoisie has significant social weight and vociferously defends its traditions, this problem cannot be solved so easily. It is in this context that we must understand the significant mobilization of the Youh Congres under it new rings
INDIA star, Sanjay Gandhi, the son of the prime minister. Essentially, Sanjay and his team are trying to extend the success achieved by the Congress party youth in establishing a dynamic organization in West Bengal. In the state of Maharashtra a deal was made with the communalist and semifascist Shiv sena, even at the cost of alienating "left" Congress members. Elsewhere the Youth Congress is getting some practical experience. The slum clearance and family planning programs in Delhi, for instance, witnessed high participation by YC members. In Kerala the YC has been extremely active in waging physical attacks on CPM cadres. The Youth Congress is attempting to build itself up into an effective paramilitary force that can handle the mass movement in the future. The left parties find themselves in total disarray in the present situation. We have already described the evolution of the SP. As for the CPI, it is clear that although the party as a whole remains the main supporter of Congress policies, elements within it are unhappy about the leadership's excessively close association with the government. In particular, dissatisfaction has been expressed at the policies of Sanjay Gandhi and the Youth Congress. But it cannot be said that anything has yet crystallized. Indeed, the party has shifted even further to the right, under the impetus of Moscow. A recent CPI council meeting adopted the line of consolidating the "patriotic and democratic forces" instead of the older formulation, "left and democratic forces. " The CPI has at least been consistent. The same cannot be said of the CPM. The CPM leadership has been unable to put forward a clear political line because it has been unable to identify a "progressive section of the bourgeoisie" with which to ally. The lack of a clear line has given rise to internal dissatisfaction. At the last Central Committee meeting three factions seemed to emerge. One supported closing ranks with the CPl. The second called for a more active stance in opposition to the emergency. The third, which won a majority, wanted to adopt a wait-and-see attitude. The second faction was effectively purged. In the meantime, since the Central Committee was unable to reach a consensus, decided to solicit views from the rank and file and act accordingly. It is difficult to say whether this attempt to placate the younger CPM cadres and simultaneously escape the responsibilities of leadership was successful or not. In any event, it is known that the CPM has held discussions with the CPI leadership. The latter apparently insisted that the CPM completely halt its attacks on government policies and measures. The CPM responded with a sarcastic statement indicating that it had no intention of breaking the "matrimonial ties that have been established between the CPl and the Congress party since 1970. " In other words, nothing and the CPM remains suspended without any Foreign policy The Indian state has effectively utilized its relative stability at home to normalize relations on a wide front 26 externally. There is a twofold purpose here, defensive and offensive. The resolution or "de-activation" of outstanding problems with Pakistan, Bangladesh, and Misoram means the downplaying or removal of sources of conflict among the bourgeoisies of the subcontinent, which will inevitably serve to weaken them in class confrontations with their own mass movements. In one sense, the basis for interbourgeois subcontinental rivalry, primarily between India and Pakistan, was largely removed by the 1971 Bangladesh war, which decisively resolved the question of the respective strength of the Pakistani and Indian bourgeoisies in favor of the latter. Once this question had been resolved it remained only for Pakistan to accept the new relationship of forces and turn to the advantages of Realpolitik. The "normalization" of Indian relations with China, the strengthening of Indo-Iranian ties, and Indian posturing on such issues as the proposed "Third World News Agency, " as well as Gandhi's promotion of "third world" attempts to prevent "colonization of the resources of the sea" by industrial countries, add up to a newly asserted Indian role as the major "independent" subcontinental power. The "normalization" of relations with China and the attempts to improve relations with the United States serve important purposes for the Indian bourgeoisie. This policy both lessens chances of conflict between India and China, which would serve no useful purpose for the Indian bourgeoisie, and tacitly affirms India's "independence" from the Soviet Union. What the Indian bourgeoisie wants is an affirmation on the part of the three major powers - the United States, China, and the Soviet Union - that the subcontinent and South Asia in general represent a legitimate Indian "sphere of influence. The Indo-Iranian ties represent a statement that the respective bourgeoisies have "come, of age. " Given a declining world imperialism and the crisis of the bureaucracies in the Soviet Union and China, it is inevitable that countries like Iran, India, and Brazil should step forward to claim hegemony over their respective geopolitical spheres of interest. The Iranian connection also serves important economic purposes for the Indian bourgeoisie. Bilateral political and trade agreements give the Indian ruling class an edge in the competition for a share of the Middle Eastern market. Additional benefits are provided by the influx of Iranian capital at relatively favorable terms for the Indian bourgeoisie. But it is primarily as a market that the Iranian connection is valued. In sum, with a "stabilized" position at home the Indian bourgeoisie has established its "responsibility" in the eyes of world counterrevolutionary forces. In view of the "vacuum" created by the twin crises of imperialism and Stalinism and the weakness of a revolutionary focus, the Indo-Iranian axis is becoming a major antirevolutionary pole in South and West Asia. November 1976