Poverty levels in India decline sharply to 26 pc

Ulhas Joglekar uvj at vsnl.com
Thu Aug 22 07:28:45 PDT 2002


Doug Henwood


> Ulhas Joglekar wrote:


> >Yes, its true. I don't know what Vandana Shiva says. Indian Left isn't
> >interested in Shiva.
>
> This contradicts a lot of what the Western "anti-globo" left says.
> What does the Indian left say about "globalization" and
> poverty/inequality?

I need to explain in detail.

Vandana Shiva is a marginal figure in Indian politics and mass movements. Indian CPs are bigger and more influential. CPs have a million party members, poll about 20 million votes and the membership of mass organisations (TUs, women, youth, students bodies etc.) under their control or influence runs into tens of millions. The impact of the Marxist Left on the 20th century Indian culture (Marxist historians, economists, poets, filmmakers etc.) is much wider than their numbers suggest.

Indian Left is verbally opposed to liberalisation, globalisation, IMF, World Bank, WTO etc. But is there is a TINA factor. Further, India is less integrated in the world economy. Globalisation does not have the centrality that it may have in Argentina or Turkey. External economic relations are not really the decisive issues in the domestic politics.

Consider the following facts:

1. India does not owe any debt to IMF at this point of time. Structural adjustment programme does not apply to India.

2. Foreign debt at $100 bn at about 20-25% of GDP is not excessive. Much of this debt is that of longer maturities. With foreign exchange reserves of $60 bn, there is no danger of any default in the near future. There was a proposal even to prepay some of the high cost debt to multilateral agencies. India has agreed to write off some of debt due to India from some African nations. (I don't know the amount, may not be substantial.)

3. Average import duties are at 30-35% ad valorem. This is substantial despite reductions in the recent years, if compared other countries. Even if rates of duties are reduced, that doesn't necessarily reduce the level of protection. India currency rupee has been allowed to float and has been depreciating at 4 to 5% per year vis-a-vis the $. Depreciating rupee compensates for lower rates of import duties.

4. Foreign trade of about 20% of GDP has limited impact on the GDP.

5. FDI and portfolio investments of $30 bn in the previous decade is not large.

There seems to be greater class/geographical inequality of income and wealth. But there is no absolute increase in poverty.

I am a maverick in terms the Leftwing attitudes. That may partly explain the difference in perspective.

Ulhas



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