National Council (Kullu-Himachal Pradesh), 6-7 June, 2009

The Global Capital Crisis and lessons for India

The whole world is passing through the worst economic crisis of the Free Market Capitalism. India is no exception. Under international pressure, India adopted the Free Market Model in the year 1991. The signing of the WTO treaty in 1994 gave further fillip to the process of globalization.

The government claims that Indian GDP reached historical rate on account of opening of the economy to foreign capital. It also calims that BSE Sensex attained 20,000 mark attracting more of foreign investment. India has produced the largest number of Dollar Billionaires over the 18-19 years of globalization. Government boasts about these achievements.

However globalization has also its negative achievements, about which the government keeps silent.
- More than 200,000 farmers all over the country are forced to commit suicide.
- Agricultural growth rate has come down to 1-2%.
- India has become a major importer of several Agri-products such as wheat, rice, turdhal, edible oil and so on. This has under mined the policy of food self reliance of the country.
- Unemployment has reached serious proportions.
-Arjun Sen Gupta committee points out that 78% of the population is forced to live on less than Rs. 20 per day.
- Human Development Report 2008 points out that India’s rank among 127 countries has fallen from 126 in 2007 to 128 in 2008.
- World Hunger Index Report of the UN points out that India is one of the hungriest countries of the world.
- The gap between the rural and the urban India is rapidly widening. So also between the rich and the poor.
- Health and education sectors are increasingly commercialized. Consequently the vast majority of the deprived classes cannot access these essential services. This is more serious in the absence of social security to the majority.

The global economic crisis of September 2008 has further worsened these problems.

The government must understand that India is not USA. The strength of Indian economy lies in its decentralized economic system, the cottage and small industries run on cluster basis by various communities. The agrarian rural economy, the so called unorganized sector which provides 93% of employment, the family system, the self restraints on consumption and emphasis on family savings and investment.

SJM urges the general public of the country to think whether the government is to continue its same old economic policy of LPG, which has made the lives of the majority, miserable, for the affluence of the few, or they want an economic policy which generates employment and income for the suffering majority, provides quality health and education services to them at affordable costs, and makes India secure sovereign and self reliant economy.

SJM demands the government –
- Not to blindly follow the Free Market Economy and to learn lessons from the recent global economic melt down.
- Give up the export led growth model and focus on domestic market.
- Give the greatest priority to employment generation.
- Strengthen and modernise agriculture and rural sector with emphasis on organic farming.
- Develop Cottage, micro and small industries and industrial clusters on top priority.
- Strengthen the family values of restraint on consumption and generation of savings.
- Provide quality health care and education services to the needy masses at affordable costs.
- GDP should not be the only criteria of economic success but improvement in the living standards of the people.
- Ensure the development of rural infrastructure.
- Strengthen environmental sustainability of our development programmes.
- Stop integration of domestic financial sectors with global financial system as the latter is highly unregulated and has caused global financial melt down.
- Develop India on its on terms and do not make it a carbon copy of America.