Enemies of the Republic

Assume that Kasab and other terrorists attacked only the Chhatrapati Shivaji Train station and, say, Dharavi slums. The reaction of the elites would have been one of commiseration. But they attacked the core of Indian business that shook the Page Three crowd. The entire media and State sprung into action.The Federation of Indian Chambers of Commerce and Industry (Ficci) had even prepared a document on the terrorism threat from Pakistan.

The Naxals are creating mayhem and killing innocents too. But as this happens in the backwaters of East of Kanpur (EoK), we only have slovenly debates and discussions about dealing with them.One set of useful idiots — in the words of Lenin — supporting the Maoists are arguing about means and ends in the air-conditioned TV studios of Delhi.

Make no mistake and have no illusions. The aim of Maoists is to “uproot the current republic run by comprador bourgeoisie and establish the dictatorship of the proletariat”. Their means are savage and the goal is brutal dictatorship. The ‘jholawalas’ will not have multiple TV stations to debate when Maoists come to power. There will be just one station propagating the party line.

Some senile experts want the government to have a dialogue with the insurgents. Should it be about handing over the republic to the rebels?Some years ago, the Andhra Pradesh government had an elaborate dialogue with the People’s War Group (PWG). All that happened was the collection of truckloads of medicines, cotton and other surgical accessories. Also the ammunition was replenished. It is standard procedure ofterrorist organisations: Go for talks when the going is tough and prepare for the next round of offensive.

The political class has blood on its hands — blood of innocent Indians. This class which operates under the three-B system of bow, bribe and blackmail thinks it can deal with Maoists in the same fashion. Congress leader Digvijay Singh who was chief minister of Madhya Pradesh for 10 years talks about the need for development and talks of Maoists not attacking temples and mutts when they have killed Swami Laxmananada Saraswathi working for tribals in Orissa. Rashtriya Janata Dal (RJD) leader Lalu Prasad who was chief minister of Bihar and a Union minister talks about Naxals killing only police informers as if that is an acceptable thing. Let us not worry about inanities of rootless wonders like Mani Shankar Aiyars.

Even mainstream left parties like the CPI and CPM are behaving like Luddites to prevent any industries coming up in EoK. Trinamool Congress leader Mamata Banerjee is playing the dangerous game of riding the Naxal tiger to become chief minister of West Bengal.

The political class is so short-sighted that it does not see the global encouragement to Maoist groups. Suddenly, the Church of England found sacredness in the Nyamgiri hills in Orissa and it has started a movement to prevent any mining there. DuringBritish rule the same church did not discover this sacredness. The Bishop of Jharkand in an interview supports Maoist as saviours of the poor and says they never harm the Church.

What then are the State and corporations to do? Arrest all sympathisers of the Naxals since they want to destroy this republic and make it treason under our statutes. They should be put in solitary confinement with a one-book (Little Red Book of Mao) library which used to be practiced during the Great Proletarian Cultural Revolution (GPCR) in China. Most of the leaders of Maoists are from two districts of Andhra Pradesh. It should not be difficult for special forces to locate them and “neutralise” them as the Americans call it.

Students Islamic Movement of India (SIMI) is a banned organisation but not All India Students Association (AISA), the student wing of the Maoists functioning from the Jawaharlal Nehru University (JNU) in Delhi. The army should be asked to de-mine the entire Naxal corridor. Top 200 corporations should each start 100 Industrial Training Institutes (ITIs) in the EoK belt and hand over the running of these 20,000 ITIs to the army. Let the home ministry publish the sources of funds of the human rights groups, particularly their foreign sources. There should be a massive police recruitment drive. If these things are done, then it will be possible to uproot the Maoists in about 20 years.

Can the current government do it? Does it have the political will?Our home minister is sincere but he lacks credibility within his own party. Also he cannot speak in Hindi and the EoK problem (about which he himself has written extensively when out of power) requires oratorical skills in Hindi. He at the least needs a number two who is very fluent in Hindi and the local dialects of EoK.

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The interest on loans was kept low, so that borrowing-led consumption can be accelerated. Of course, as India, China and many East Asian and Arab countries are financing the US economy by investing in their treasury bills for rates lower than three per cent and it became an economic axiom that US consumption is the key to global growth. The lack of savings by households impacts not only on the current situation but also the inter-temporal distribution of wealth.

We can use a thumb rule that whenever the savings rate of a society is less than 10 per cent of its disposable income (with stable taxation and inflation), the society is getting into difficulties. Many households began to rely more on social security, and this liability, in some countries, is not, or is inadequately, funded. This, in turn, has created substantial issues of solvency of government and its ability to take care of the old-age security of its citizens.

This, coupled with the declining population growth rate and longevity of current population, is creating an explosive situation of bankrupt state exchequer and lower accretion to the social security fund from blow. Consumption-driven society is turning to be a “Responsibility Denial” society. The consumers are feted and savers are frowned upon. But the wheel is slowly but surely turning.

Suddenly, the good old virtues of saving and thrift are becoming the fashion from Alberta to Auckland. The limits to consumption-led growth are realised. On a global scale, the consumption-led growth of some countries such as the US are supported by saving countries in the developing world. But how long can these anomalies continue? There are debates and discussions about the “virtues of savings” in the Western media and among economists.

The savings of the different sectors of the economy — government, private corporate sector and households — for the different decades starting with the 1950sare given in Table 2.

The savings rate of the economy has doubled from the 1950s to the 1980s, from around 9 per cent to around 18 per cent and it has increased to around 24 per cent in 2000-2001.

This phenomenal increase in savings has been achieved through the efforts of the household sector, which accounts for nearly 90 per cent of the national savings. This savings rate of the households is without considering investment in gold by households, since the Government economists consider that as consumption. Actually, purchase of gold is an insurance and pension product for the lower classes and if we include that, our savings rate will be higher by another 2 percentage points.

In this context, Partnership and Proprietorship enterprises involved in business are also included as households. If we consider only the disposable income of households, the saving rate as a percentage of that will be more than 40. We are becoming a saving society, which is the main driver of the economy. Because of this, the dependence on FDI and FII is significantly lower.

It is at this juncture, we find experts and corporates in India suggesting that the middle-class should consume more. Shopping is made a virtue and a lifestyle statement. The hidden persuaders (advertising) are in the open. Plastic credit cards are offered for the asking (many times without even asking!) and consuming is made the modern mantra. It is consume or perish which will slowly turn into consume and perish!

The Government is discouraging savings by keeping many a rate low and removing tax breaks for saving. But the Indian middle-class needs saving much more than anyone else in the world. We do not have universal medical care and, hence, during old age the cost of healthcare has to be borne by the middle-class.

We do not have universal social security. Of more than 400 million workforce in the country, only some 20 million government employees (Central plus State and local governments) and around 40 million private employees (who are covered by Employees Provident Fund — EPF — schemes) have retirement benefits. Large number of middle-class and poorer segments are not covered by any social security schemes.

The age composition of the elderly, as estimated by the Census office, for different decades is given in Table 3. Nearly 7 per cent of the population is above 60 years of age.

Table 4 shows population projections. It says that the population above 60 years is expected to be 7.5 per cent by 2006, reaching 9 per cent by 2016. This indicates that a substantial portion of elderly need to be taken care of. As per Census 2001, there were more than 403 million total workforce consisting of 311 million rural and 92 million urban workers.

The social security coverage of most of the agricultural and non-industrial workers is inadequate. This is one area where the policy-planners and society need to focus rather than on consumerism. Their savings can only protect them. Western economics start with the premise that “Wants are unlimited and resources are limited”. Our civilisational ethos is based on “limited wants” in the context of conserving for the future and conserving the nature.

It has cross sectional advantage of nurturing nature and inter-temporal benefit of taking care of elderly and planning for social security in old age. The greed-based market economy may not offer solutions to the problems of multitude if the focus is only on consumption-driven society. The fear-based totalitarian systems such as communism have also failed. It is necessary to evolve a third way which is environment-friendly and takes into account intergenerational equity not by the fiat of the State but by the suasion of social norms.

Time to move away from consumption-driven economy to savings nurturing society.

Otherwise, we will prove that the only lesson we learnt from the economic history of the plastic-addicted debt-ridden western society is our refusal to learn any lessons at all.


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