Here we place before you an abridged version of an article by Subhashis Gupta , published in Sangrami Hatiyar, the monthly organ of CPI(M)-led Co-Ordination Committee of State Government Employees, in June, 2005. The caption is ours. The article deals with the sinister role of the British financial institution DFID in designing and implementing the process of public sector restructuring in Indian states including West Bengal . Citing the disastrous consequences of the DFID-designed restructuring in Andhra Pradesh, Mr. Gupta questions the collusive silence of the Left Front Government of West Bengal regarding the conditionalities and consequences associated with the process.
It may be noted that the Left Front Government of West Bengal has almost completed the first phase of PSU restructuring whereby ten units have been selected for permanent closure, fifteen units for restructuring under state ownership, and one unit for outright privatisation. As many as ten thousand workers and employees are directly affected in the first phase of restructuring and DFID has already disbursed Rs 210 crore for this purpose. The aid given by DFID is being utilized for funding the early retirement schemes which are nothing but a form of retrenchment.
In the second phase, 29 concerns are earmarked for restructuring. About 80,000 workers and employees would be affected in this process. The second phase involves 15 units in the manufacturing sector and 14 public utilities including the WB State Electricity Board, Calcutta Tramways Ltd, North Bengal State Transport Corporation, South Bengal State Transport Corporation, Calcutta State Transport Corporation and West Bengal State Minor Irrigation Corporation.
MAY 18, 2005 would go down as a turning point in the history of West Bengal . An economic event occurred on that day, but the underlying essence of that event stemmed from politics and ideology. For the last 18 months, the name of an international institution was heard again and again in West Bengal . On 18 th May 2005 that name was widely and loudly propagated by the print and electronic media once again. The name of that institution is – Department for International Development, or DFID. This is an institution of the British Government.
On that day, a ‘workshop’ was held in a five-star hotel in Kolkata on the subject “Restructuring of PSU: Best Practices”. Besides the adminis-trative representatives of West Bengal State government, the Director of Institute of Public Enter-prises, representatives from Andhra Pradesh, Orissa, Karnataka, Government of India, DFID, World Bank (WB) et al attended the workshop. Representatives from some international consultancy agencies were also present.
Providing liberal economic support as well as consultancy services to the ongoing structural adjustment programmes is the main task of DFID. Of course, these are done through agencies. DFID is a new type of imperialist financial institution. Its task is to soothe the scars inflicted by, and silence the voice of protest against the structural adjustment programmes.
DFID was formed through legislation in the British Parliament. This institution works in close tandem with the IMF and the World Bank. Nowhere in the world does the DFID work with so much interest and enthusiasm as in India . India receives the biggest share of DFID aid in the world. Over the last five years, India got a staggering amount of 764.4 million British pounds. During the year 2005-2006, DFID will give 280 million British pounds to India . The DFID is helping the implementation of basic programmes of liberalization, privatization and globalization at national level and implementing complementary programmes in four states, namely, Andhra Pradesh, Madhya Pradesh, Orissa and West Bengal .
Recently, ‘Christian Aid’, an old and established NGO based in Britain published an extremely absorbing fact-finding report: “The Damage Done: Aid, Death and Dogma”.
The above mentioned field research-based report has revealed that as a result of the liberalization and privatization policies, and of the role played by World Bank, IMF, WTO, DFID etc. 22,000 farmers committed suicide in the last one decade. In Andhra Pradesh alone 4378 farmers committed suicide during the period from 1998 to March 2005. Like Andhra Pradesh, the report tells us, other states which started taking loans from IMF and World Bank and working in close co-ordination with DFID, have met the same disastrous fate. “The Damage Done: Aid, Death and Dogma” mentions a secret memorandum of the World Bank under the caption ‘Trade Reforms in India ’. In this report the conditionalities of DFID aid and its effects on India have been exposed. The conditionalities are as follows:-
Devaluation of the currency;
Adopting new labour laws for facilitating unhindered foreign investment;
Opening newer pastures for Indian and foreign private investment.
Disinvestments of profitable PSU’s;
Closure of loss making PSU’s;
Reforming the financial sector and allowing private banks to operate;
Liberalized exim policies;
Reduction in social sector outlays so as to curb fiscal deficit;
Amendments in the existing laws and rules to facilitate the ongoing reform process;
Adopting market-friendly outlook and reduction in government interference;
Liberalizing the banking system;
Augmenting the share of indirect taxes by reforming the taxation policy.
The report mentions that, as a consequence of implementing the above conditionalities in the agricultural sector by the Andhra Pradesh government, per capita loans of farmers who committed suicide shot up to Rs.1,06,318 (approx 1300 British pounds). For restructuring the Andhra Pradesh State Electricity Board (APSEB), DFID sanctioned an aid of 1.5 million pounds to the consultancy agencies for preparing project reports. DFID made it clear that to curb the losses of APSEB, 11 million farmers must make adequate payments. In the month of February 1999, the ‘Electricity Reform Act’ of Andhra Pradesh was adopted and DFID gave 1972 million British pounds for this purpose.
In the decade of 1990’s, chief minister Chandrababu Naidu of Telugu Desam party was searching for a path that would catapult Andhra Pradesh to the zenith of success. Naidu dreamt that his state would become a great player in the field of information revolution. At that time, Chandra Babu Naidu got the widest support from industrialists all over India and stole the limelight in the media for adopting those policies. Not only him, but the erstwhile Chief Minister of Madhya Pradesh, Digvijay Singh and Chief Minister of Orissa, Navin Patnaik also received incessant support and praise from the media for the same role. Currently, Chief Minister of West Bengal , Hon’ble Buddhadev Bhattacharya, is occupying the same position. Though Mr. Bhattacharya has entered the stage later, he has now surpassed all his three erstwhile/current counterparts and he is receiving the maximum praise from Indian and foreign capitalists, the central government and the media. If the continuation of a state government led by a communist party for long 29 years within a bourgeois constitutional framework is a historic achievement, such huge praises showered on a communist chief minister probably constitute another world record.
In 1998, the report points out, the Andhra Pradesh Government adopted the “AP Economic Restructuring Programme” at the behest of the institutions mentioned above. For this programme and for restructuring the local autonomous bodies and industrial units over the next five years, the WB gave a loan of 830 million U.S. dollars. The international consultant firm MacKinsey (this name is well known in West Bengal ) was appointed for this purpose. In the month of January 1999, the AP government formulated a strategy for structural reform, namely, ‘Vision 2020’. It contained a plan to evict 2 crore people from the agricultural sector with a promise that the affected people would get jobs elsewhere. In the name of agricultural diversification, small peasants were evicted and capitalists were allowed to enter the agro-sector. Agro-industries and an export-oriented agro-system were encouraged. The entire agricultural market was opened up for the benefit of Indian and foreign corporate sectors. Agriculture was transformed into agro-business
The most significant aspect with the DFID and other multilateral lending agencies lies in the fact that they can mesmerize all – the right, the centre and even the left! Today none of these three streams is ready to tolerate losses. Profit and only profit is their buzzword – profit at the cost of retrenching people. By striving to derive profit under their conditions, the governments in our country are handing over the lion’s share of profit to the foreign and Indian industrialists. It is they who will reap the benefits from the so-called restructuring of public sector concerns and industries. Therefore, privatization is merely a ploy. In reality, these measures are aimed at slashing the workforce and dismantling trade unions in order to curb the struggle against capital. And this is the most important benefit. The concept of reducing losses would be extended to the sphere of government departments. Education, health, supply of potable water, housing, construction of roads – all would be deemed loss making and closed one by one. Losses can be contained if salary, D.A., etc. are stopped. And pension would be the next casualty. In the name of ‘development’, world imperialist forces have come up with a new mantra ‘stop losses’. Cosmetic changes are introduced to hide the ugly face of structural adjustment programmes, which are now rechristened as ‘restructuring’. Joint ventures are now affectionately called public-private partnership (PPP).
By keeping the whole nature and role of DFID a closely guarded secret, the state governments are driving the steamroller of liberalisation and privatization to kill people in different parts of India . Under the pretext of containing losses and diverting the subsidies allotted for industries towards public welfare and development, factories are being closed down, thousands and thousands of workers are being thrown out of jobs, and thousands and thousands of farmers are being forced to commit suicide.