Thursday, May 21, 2009

Who is Neo-liberal in the Land Acquisition Debate?

R. Ramakumar

One of the most important criticisms of the Left during Elections-2009 was that the government in LF government in West Bengal followed “neo-liberal” policies, which were rejected by the people. The writer who best captured this sentiment was Siddharth Varadarajan. Writing in The Hindu, he notes that the policies of the UPA government heralded the “return of the social democratic paradigm” in India. According to him, the Left parties, instead of encouraging this policy shift, held on to “one free-market policy its rural support base viscerally opposed: land acquisition.” One has to comprehensively reject this allegation.

Siddharth Varadarajan misses two simple facts. One, the effort of the West Bengal government was to ensure that a fair price is paid to the sellers by the purchaser. It was the State government that acquired land from the peasants, on the basis of one of the best rehabilitation packages in India, by regulating the land market in their favour. Two, if at all any argument could be called “free market”, it is the argument of the movements that resisted the West Bengal governments’ attempt to acquire land in Singur. For these movements, the central slogan was the reduction of the role of the state in land acquisition. Let me provide a quote from two prominent spokespersons of the Singur movement:

[Land acquisition] involves a transaction between two private parties, namely the corporation and the land owning peasants without level playing field, and the function of the State should be at least to ensure this transaction is voluntary, particularly because one party in the transaction namely the peasant is economically far weaker. This would mean that the corporations can acquire land at a price at which the peasants are willing to part voluntarily with their land, either individually or through collective decisions, the latter being especially relevant in the case of tribal land. Instead, what has been happening is that the state using force and violence under a cloak of secrecy…(Medha Patkar and Amit Bhaduri, “Industrialization: Which Way Now?”, originally in Ekak Matra, May 2008, Vol. 7, No. 6).

The question is posed in clearer terms by Walter Fernandes, an associate of the Singur movement: “Why should the state acquire land for private companies instead of asking them to buy it through negotiations with the owners?”

The arguments of Patkar and Bhaduri and Fernandez are soaked in neo-liberalism; they are mindlessly towing the neo-liberal argument to create a free land market in India. Compare it with the statements from neo-liberal writers and groups; Bibek Debroy notes:

A free land market does not exist in India, be it in the rural sector or in the urban sector. There is pervasive State intervention. In Britain, the enclosure movement predated the industrial revolution and freed up land markets. Nothing comparable happened in India. Rural land markets are subject to State intervention, primarily but not exclusively, through the colonial Land Acquisition Act. Consequently, free land sales are not always permitted…

Right-wing groups like the New Delhi-based Liberty Institute concur:

The success of the Nano, coupled with the bitter debate over land in Singur, should help us appreciate the urgent need for liberalizing the land market…If the government no longer tries to act as a broker in industrial mergers and acquisitions, there is no reason for it to become a land broker either. But for this to happen, we need to radically liberalize the land market.

The idea that the state should not be involved in land acquisition – allowing a free hand for industrial houses – is a deeply problematic idea. In the absence of the state, small and marginal farmers would meet the same fate as India’s Adivasis, who have historically lost their land to settlers. It is only when the state intervenes that there is any chance of a good deal being worked out for the land sellers; only then can predatory acquisition of land and higher concentration of land ownership be curbed. The intervention of the state, then, becomes an attempt to regulate the market, not promote it as Siddharth Varadarajan argues.

Some tentative notes on Verdict 2009

R. Ramakumar

The results of the 2009 elections to the Parliament have surprised most observers. Indeed, it appears from most reactions that the conclusions to be drawn from the results are straightforward and obvious. Some of the most common reactions from the mainstream commentators are as follows.

First, the electorate has reposed faith in the Congress party, which alone can ensure political stability. The third alternative of the Left raised the spectre of instability and the electorate rejected the option.

Secondly, the results present a clear green signal for economic reforms. Such an analysis comes not just from the thoroughly partisan pink press. Sociologist Shiv Viswanathan beat the pink press; calling the Left a “dog in the manger”, he advised: “it is…a reminder to the Congress that the millstone of CPI (M) politics is no longer there. It is a nudge to remind it about the reforms it has been lackadaisical about.”

Thirdly, the verdict against the Left in Kerala and West Bengal is also a verdict against the “neo-liberal policies” of these State governments.

I believe that the above views are one-sided, if not misplaced.

First, it is accepted that the third alternative put forward by the Left was not seen by the people as a “credible and viable alternative” at the national level. The presence of some parties with not-so-clean pasts in the State-level alliances and the failure to put forward concrete alternative policies before the elections did create ambiguities in peoples’ minds. In part, the loss of votes from sections of religious minorities and other secular-minded people for the Left and the third alternative reflects this lack of conviction about the proposed formation. However, this much cannot be a full reading of the verdict.

It must also be plain to any observer that the success of the UPA in the elections was a result of the failure of the NDA to cobble up a strong coalition. In turn, the failure of the NDA to do so was a result of the decision of many regional parties to cooperate with the third alternative. Among the regional parties that may have been forced to go with the NDA in the absence of a third alternative are the TDP, the AIADMK and the BSP. Significantly, the parties that came into the third alternative together obtained about 21 per cent of the vote share in the elections. In a sense, this was a signal contribution of the Left in the 2009 elections. However, many parties in the third alternative have had a history of being associated with the BJP in the past and there were doubts raised over whether they would move over to the BJP again, if the need arose. This has also contributed to the ambiguities about the third alternative in peoples’ minds. The unintentional outcome was that the ensuing three-cornered fight benefited the Congress party.

Further, the views of the electorate on national issues and national parties are always expressed in an interface with State-level issues and regional parties. This fact renders a simple reading of the stability story problematic. If national stability was indeed an overriding objective of the electorate, one would have to ignore the results from States like Bihar and Orissa. Also, till 2009, voters from West Bengal (and to an extent, Kerala) have preferred to vote for the Left even while national issues have dominated the elections.

The argument that the Left should have tailed the UPA in these elections is a bizarre one. Somnath Chatterjee needs a reminder that the historical basis for the existence of the CPI (M) in India is the struggle to forge an alternative to the bourgeois-landlord party called the Indian National Congress. That is the reason why the CPI (M) considers the resolution of the agrarian question as a national question. The Left would have got ideologically decimated in these elections if it had tailed the UPA in any form.

Secondly, the success of the UPA was aided by the coincidence that economic conditions in India were upbeat between 2004 and 2009. The period between 2004 and 2009 was a period of high economic growth. This growth was fuelled in part by a phenomenal growth in the stock market and FII inflows. However, there was also a growth in the real economy. After 2004-05, agricultural growth had averaged at around 4 per cent per annum till 2007-08. This growth had two sources. One, the growth was price-led, associated with a marked rise in world commodity prices. Two, there was a phenomenal expansion in the supply of rural credit and a moderate rise in public investment after 2004. Even though much of the additional supply of rural credit went to big cultivators and private corporations, the multiplier effects that it might have had on rural demand is likely to have been high. On the top of this, the loan waiver scheme helped peasants – needy or otherwise – to improve their farm finances. Both these initiatives followed consistent pressure exerted by the Left parties on the UPA government.

One source of major disbelief among many Left followers is the poor correlation between farmer suicides and the electoral verdict. This poor correlation cannot be explained away by citing the loan waiver package. Here is my hypothesis. It would be wrong to simply assume that every region in India is equally affected by agrarian distress. In India, just as the development of capitalist relations in agriculture has been biased across crops, classes and regions, the contemporary agrarian crisis has also been uneven across crops, classes and regions. In the midst of such unevenness, one cannot expect to get a neat result that would reveal the anger of sections of peasants towards the Congress party. The good show put up by the Congress party in Vidarbha and parts of Andhra Pradesh are evidence to this pattern. In Vidarbha, particularly, the loan waiver package would have been meaningless if the prices of cotton were not ruling high in 2007 and 2008. The price that prevailed at the harvest of 2008 was Rs 2800 per quintal; after many years of low prices, the prices in 2007 and 2008 were received by farmers with great relief.

Similarly, the National Rural Employment Guarantee Scheme (NREGS) aided the Congress party in garnering votes of the rural poor in the elections. The NREGS was passed after the Left parties and progressive social movements exerted considerable pressure on the UPA government. It is well known that the UPA government was deeply skeptical about introducing the NREGS in the way it exists today and given the first chance, the neo-liberals are likely to cut it to size.

Most importantly, the effects of the global economic crisis, which became most acute by early-2009, were not fully felt by the people at the time of the elections. While most of the developing world was reeling under job losses and bank crashes, India was largely immune to such huge losses. Without doubt, this immunity was due to the refusal of the Left parties to allow the introduction of fuller capital account convertibility and the privatization of banks, insurance companies and pension funds. Again, the Congress party became an unintended beneficiary.

The point I am trying to press is that upbeat economic conditions that aided the Congress party in the 2009 elections have nothing to do with neo-liberal reforms. They were fortuitous on the one hand, and a result of decisive public intervention and regulation on the other. As such, Verdict 2009 can in no way be interpreted as a go ahead for economic reforms.

Thirdly, without doubt, the Left parties have faced substantial setbacks in this election. The setback demands serious introspection coupled with great care not to be shaken by sheer populist criticisms. In particular, results from the Left-ruled States are to be dissected in great detail. To its credit, the CPI (M) in Kerala has shown great frankness and humility in assessment. According to the CPI (M)’s Kerala State secretariat, while the results also reflected a national wave, the loss of votes that traditionally accrued to it cannot be dismissed away. It said that the party would strive hard to work in tune with the aspirations of the masses that stood by it by making appropriate corrections.

For the Left, the results from Kerala are less worrisome than West Bengal. In Kerala, even when the LDF scripted some of its worst electoral performances in recent history, as in 1991 and 2001, its vote share had not fallen below the floor level of 42 to 43 per cent. In 2009 too, the vote share of the LDF did not fall below 42 per cent; the actual share was 42.01 per cent. It is, nevertheless, a different matter that the Left lost significantly with respect to the number of seats. Also, the loss of the LDF in its bastions like Kannur and Vadakara has been shocking. Knee-jerk reactions will not help, and a detailed comment has to wait till the LDF completes its internal review.

A feature of the 2009 elections in Kerala was that the LDF was faced against a strong alliance of all the anti-Left forces. The Janata Dal (S), led by the media moghul M. P. Veerendra Kumar, had moved over to the UDF as part of a long-term political game plan. His popular daily Mathrubhumi was virulent and nasty in its attack on the LDF. The Catholic Church in Kerala had vowed to defeat the LDF in protest against the government’s efforts to regulate fee structures in Church-managed self-financing colleges. Most of the caste-based organizations in the State, which are historically UDF-leaning, were lined up against the LDF on petty issues. Religious fundamentalist organizations like the NDF and the PFI vowed to keep the Muslim votes undivided, and transferred votes in large chunks to the Muslim League.

Even this unscrupulous mahajot against the LDF could not reduce its vote share to below 42 per cent. Between 2004 and 2009, the absolute decline in the number votes that the LDF candidates together polled was only about 2.3 lakhs. The notes on the LDF’s imminent demise are not only premature, but also misplaced given the CPI (M)’s commitment to undertake corrections and turn things around.

The loss of the Left in West Bengal has been the most worrisome. West Bengal has all along been the exception to anti-incumbency sentiments in India, and the number of seats for the Left has declined from 35 to 15. While the national wave in favour of the UPA may have passed West Bengal too, the results reveal more than what they hide.

West Bengal has been the centre of much political action from 2006 onwards. The controversies surrounding Singur and Nandigram, the nexus between the Trinamul Congress, Maoists and a section of the Indian civil society, allegations related to poor governance and neglect of human development had brought the State into India’s political centre stage. It appears that most of these factors played a role in different degrees in the loss of the Left. Here again, the detailed comment would have to wait till the CPI (M)’s State unit comes out with its internal review.