Capitalist Profits rose while People suffered in 2020-21

The financial year 2020-21 was a period when the majority of people in the country went through untold suffering. Crores of working people suffered due to the Corona Virus and due to the national and state level lockdowns. The total size of the economy, measured by the annual value added or Gross Domestic Product (GDP), contracted from Rs. 204 lakh crore in the previous year to Rs 197 lakh crore in 2020-21. Adjusting for inflation in commodity prices, this means a contraction of 8 to 10 percent in productive activity.

The financial results reported by 1100 listed capitalist companies for the year 2020-21 show that their combined net profits were 58 percent higher than in the previous year[1]. Net profits had declined in the previous year, 2019-20. Thus the pandemic and lockdowns actually benefited the owners of the biggest capitalist companies in the country. These are monopoly companies, which control major shares of the market for industrial goods and commercial services.

Several factors have influenced the huge recovery in monopoly capitalist profits during the pandemic year. The most important factor has been the measures taken by capitalist owners to cut down their wage and rental bills.

Capitalist companies used the conditions of lockdown to cut down the number of workers employed, and in several cases, cut monthly wages as well. Many service providing companies made their employees work from home. They managed to increase the daily working hours and thereby extract more surplus value per human-day of work. They cut down on office space and saved on rent.

The Reserve Bank of India came to the assistance of the capitalist companies by cutting down the rate of interest it charges on advances to commercial banks. This led to a reduction in the interest cost for capitalist borrowers.

Movements in international prices also played a role. The drastic decline in the international price of crude oil during April-September 2020, for instance, boosted the profits of the petroleum refining industry. Recovery in international metal prices during the second half of the year boosted the profits of the steel and aluminum industries in our country.

What do all these facts, taken together, show? They show that the lockdowns imposed in the name of fighting against the Corona Virus have served the biggest capitalist companies in the country to intensify the exploitation of the working class and boost their profits. Under the cover of fighting against the virus, the ruling capitalist class, headed by the monopoly houses, is escalating its offensive against the livelihood and rights of the workers, peasants and all other toiling people.

[1] Money Control, 1st June, 2021; https://www.moneycontrol.com/news/business/economy/5-factors-that-led-to-a-rise-of-corporate-profit-to-gdp-ratio-to-a-10-year-high-6974761.html

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  1. This Article reveals the extent to which Indian Big capitalists have made huge profits in the midst of devastating Coronavirus pandemic and the Lockdown imposed by the Indian Government. As the article says, it is absolutely true that considerable portion of the Capitalists profits is boosted by enmass downsizing of work force, increasing the work load and working hours of workers, and also cutting down of their wages and other benefits.

    H’ble Modi also has offered various massive tax cuts and subsidies to the big capitalists to increase their profits. Modi and his government very “Boldly” brought various anti-worker Acts such as the 4 Labour codes cancelling all the labour laws and workers’ rights, removing all restrictions on the limit of working hours, right to strike, etc. to the delight of Indian big capitalists. Thanks to the H’ble PM, the regular working hours in many large scale Engineering Industries have also become minimum of 12 hours a day. Workers are being terminated everyday and the real situation for the workers is very brutal and barbaric.

    Simultaneously brutal attacks on the Peasants are going on as shown by the enactment of 3 anti-Peasant Laws by Modi under the command of big capitalists such as Tata and Ambanis.

    The Biggest democracy in the World, does not permit any voice to be raised against all these criminal deeds of the capitalists and their government. UAPA and other such black laws are used against all those who resist these injustices and they are put in prison or killed.

    Under such terrible conditions prevailing in the country, it is very disappointing and pathetic to see that the so called ‘recognized’ communist parties are trying to save this democracy, instead of calling for the overthrow of this entire political and economic system. If this is not the ripe time for the overthrow of this anti-people regime and establishment of workers’ and peasants’ rule, when is it going to be? It is right time for all communists and progressive forces unite to lead the workers and people for liberation from the rule of Indian big capitalists and their most oppressive and reactionary rule.

    Bashir, Chennai

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