The Economic Survey, which was presented to Parliament on 3rd July, two days before the Union Budget, is produced every year by the central Ministry of Finance. This year’s document is more ambitious and pretentious than usual. This being the first year of a re-elected BJP government with an even bigger majority than before, the Economic Survey attempts to lay out a blueprint for allegedly creating a “golden New India”.
The Economic Survey 2019 sets the goal of annual GDP reaching US$ 5 trillion (Rs. 350 lakh crore) by 2024-25, and India becoming the third largest economy of the world, next only to China and the United States, from being the seventh largest at the present time.
The Economic Survey, which was presented to Parliament on 3rd July, two days before the Union Budget, is produced every year by the central Ministry of Finance. This year’s document is more ambitious and pretentious than usual. This being the first year of a re-elected BJP government with an even bigger majority than before, the Economic Survey attempts to lay out a blueprint for allegedly creating a “golden New India”.
The Economic Survey 2019 sets the goal of annual GDP reaching US$ 5 trillion (Rs. 350 lakh crore) by 2024-25, and India becoming the third largest economy of the world, next only to China and the United States, from being the seventh largest at the present time.
On close examination, what is being advocated is nothing but a continuation of rapid growth in production for export markets, achieved through high levels of foreign capital investment, more intense exploitation of Indian labour and capture of a higher share of the world market by Indian capitalists. The aim is not to raise the living standards of the Indian people to the maximum extent possible. The aim is to maximise the rate of capital accumulation in the hands of the Tatas, Ambanis, Birlas and other monopoly houses.
The vision of achieving 8% annual economic growth over the next five years is presented in the first chapter, under the title “Shifting Gears – Private Investment as the Key Driver of Growth, Exports, Jobs and Demand”. It is a vision of India achieving rapid export-oriented capitalist growth, similar to what China achieved for several decades until 2008, and several other East Asian countries achieved prior to the crisis of 1997.
The term “shifting gears” does not mean a change in direction. It means further acceleration along the same course of maximum exploitation of labour and plunder of natural resources by Indian and foreign capitalist monopolies. The overriding goal remains the maximisation of profits in the hands of monopoly capitalists. The so-called shift which is being advocated is that rapid growth in production must be driven entirely by the growth in export and investment demand, rather than by domestic consumption demand.
The orientation of any economic system refers to the overriding goal and motivation driving the production process. Whose interests, or the fulfillment of whose needs, determine how much of different goods and services are to be produced? In any country where the capitalist system prevails, the decisions regarding what and how much to produce, and for which market, are all taken by private capitalist owners of the means of production. The overriding motive governing those decisions is the maximization of their private profits.
Crores of workers, peasants and other toiling people have been organising massive protest actions demanding that their growing material needs be fulfilled. If the fulfillment of their growing needs becomes the driving force, there would be a tremendous increase in the demand for nutritious food, clothing, materials to build houses, supply every home with electricity and internet, etc. There would be a huge increase in employment, to meet the increased demand for consumption goods as well as to provide good quality public school education and public health care for all.
The Economic Survey argues that rapid economic growth cannot be driven by growth in domestic consumption demand; and that sustained rapid growth over a decade or more is possible only if export demand becomes the prime driver of economic growth. This is a clear admission that the aim of the faster growth is not to satisfy the growing needs of the people of our country. The aim is to accelerate the pace of capital accumulation in the hands of Indian monopoly houses, as well as foreign multinational companies investing in India, by producing more of whatever can be sold profitably in foreign markets.
The Economic Survey argues that the best way for India to achieve rapid export growth in the present international situation is to try and replace China as the preferred source for supply of as many cheap manufactured goods as possible. It says:
“While it is true that world trade is currently facing some disruptions, India’s
share in global exports is so low that it should focus on market share. One could even argue that the current disruptions provide an opportunity for India to insert itself into global supply chains.” {Para 1.30}
The “current disruptions” refers to the negative impact which the tariff war launched by the US against China has had on world trade as a whole. Many products of light manufacturing industry in China, which have been flooding the US market, have now become relatively expensive due to the import tariffs. The Economic Survey is presenting this as a golden opportunity for Indian capitalists to take advantage of the China-focused tariffs and increase their share of the US market.
The blueprint laid out in the Economic Survey reveals that the big capitalists are dragging our country on an extremely risky and dangerous path, to achieve their own narrow-minded imperialist aims.
Firstly, it is highly risky because the condition of international trade is not what it was 10 or 20 years ago. World trade was growing rapidly when China and other Asian countries achieved rapid rates of export-oriented capitalist growth. In contrast, world trade has been stagnant or shrinking every few years since the great recession of 2008-09. Other reasons why India is unlikely to repeat the Chinese experience is the pathetic living conditions of workers, subsistence wages, high levels of illiteracy, and relatively poor condition of transport and other infrastructure in our country.
Secondly, it is an undeniable fact that those countries which experienced rapid export-oriented capitalist growth in the past are now facing deep problems. They are faced with extremely high levels of inequality, class conflict as well as vulnerability to external developments. The impact of the worldwide recession of 2008-09 hit these economies especially hard, much harder than it affected India. Decline in export demand has led to massive job losses and fueled social unrest within China. So, export oriented growth is not a solution to overcome the crisis of capitalist growth that India is facing now.
The Economic Survey makes a pretense of breaking with western economic thought. However, the entire first chapter is based on the imperialist notion that giving full scope to the “animal spirits” of capitalist competition, with big fish eating the small fish and every working person fending for oneself, as the best way to organise the economy.
The opening paragraph of the first chapter declares:
“During the last five years, India’s economy has performed well. By opening up several pathways for trickle-down, the government has ensured that the benefits of growth and macroeconomic stability reach the bottom of the pyramid.”
This is to promote the discredited “trickle down” theory, according to which if the wealth of the capitalists grows rapidly, a small amount of that will reach the workers in a trickle and they are supposed to be thankful for that.
To assert that wealth has trickled down to the poorest of the poor during the past five years is to turn the truth completely on its head. If capitalist growth has been benefiting all workers and peasants, why have their mass protests been growing in recent years? Facts show that workers and peasants have sunk deeper into debt over the past five years, hit by growing unemployment, depressed wages and declining agricultural incomes, besides the Note Ban and introduction of GST.
The Economic Survey reveals the attempt of the BJP government to present discredited western capitalist prescriptions under the guise of new and original thinking. The blueprint it presents is nothing but the accelerated implementation of the same old anti-people program of globalization, liberalization and privatization advocated by the World Bank and IMF. It is a blueprint to open up Indian markets even further to foreign capital, suppress workers’ wages to abysmally low levels and make it even more attractive for the wealthiest monopoly capitalists in the world to invest in India and produce goods for sale in foreign markets.
The course being pursued can only benefit an exploiting minority, headed by the capitalist monopoly houses. It will further increase the insecurity of livelihood that is plaguing the workers and peasants. It will further increase the degree of dependence of the Indian economy on foreign capital and on foreign markets.