The Telegraph
Since 1st March, 1999
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- There is still much the left can do

Have not the left left it a little too late' They are livid at the decision to induct representatives of the World Bank, the International Monetary Fund and American consultancy agencies on internal official committees which shape the government's economic policy framework. This is however only the continuation of a trend already firmly established. The deputy chairman of the Planning Commission is a direct import from Bank-Fund joint precincts in Washington DC; the left could not prevent his appointment. More recently, a tax adviser to the finance minister has been picked from the same neighbourhood.

The finance minister himself, lest it be forgotten, is a dyed-in-wool believer in the package of economic policies known as the Washington Consensus. Some years ago, in his earlier incarnation as the country's finance minister, he had, in the course of a foreign jaunt, entreated the leading lights of Western capitalism to return for another spell to the India their forefathers had once ruled for a couple of centuries, this time to teach us development. The finance minister would now claim he was indulging in some humour. But humour reveals the mindset; the invitation to foreign advisers to enter the inner portals of administration is correlated to that mindset.

The left are in no position to claim to have come out of the ark only yesterday. They must be aware that the game already got lost at the time the council of ministers of the United Progressive Alliance government was being put together last May. In the globalized ambience, not really the prime minister, it is, one dares say, the finance minister who occupies the most important slot in the cabinet. Finance rules the world, finance shapes the nation, the finance minister therefore easily dons the role of primus inter pares. His ministry, since it controls the funds, emerges as both the communicator and the breeder of ideas which influence the system.

Another recent development is worth noticing. Close on the heels of the capitulation in 1991, the ministry of finance has been packed by re-imported expatriate economists and fiscal experts, who had in the past served loyally the Fund and the Bank and have now chosen to return home to spread the message of the Washington Consensus. They keep trying their best to mould India in the image of a model compliant to international capitalism. Logical positivism, they firmly believe, is bunk; even if Fund-Bank policy aggravates the misery of the country's masses, to cast doubt on its efficacy is l'se majest'.

Add to this the piquancy of the political corner the left have pushed themselves into. Religious fundamentalism cannot be taken lightly; however distasteful the overall flavour of the UPA's economic policies, the present government must not therefore be thrown out of power. For the comprador-minded in the Congress, the situation could not be any lovelier. They may follow the full-fledged capitalist line, they may sell the country's interests down the drain to foreign predators, the left are still likely to continue to offer the government the crucial lifeline; the alternative is perdition in the form of the Bharatiya Janata Party's recapturing the citadels of power.

In learned language, the problem is known as the Prisoner's Dilemma. It would be folly though for the left to give up the ghost. To remain credible, they must assert themselves. The ongoing controversies with the Congress need to be stretched to a point beyond a mere friendly, and, on occasion, not so friendly, t'te-'-t'te across the coffee table. Some of the threats of direct action in case they are not listened to perhaps need to be carried out in practice. In other words, the economy and the polity, should, at least for some while, be allowed to assume the look of a battlefield. The compulsions of patriotism in fact call for such an initiative. The plight of the middle and the working classes in any case could not be rendered much worse by limited skirmishes of this nature than what it already is.

In a number of other areas too, the discreet quiet the left are maintaining is hard to understand. The Congress has got back its kingdom because the left and the regional parties have decided to make a gift of it to it. The least these other parties could expect of the government as reciprocal gesture is that some of the pending issues clouding Centre-state relations should be speedily addressed. The first task should be to look into the major proposals of the Sarkaria commission and speedily implement them. Mind you, this commission was not a revolutionary body. Even so, its recommendations concerning such issues as fiscal and monetary problems affecting the states, the role of governors and the Disturbed Areas Act and the Armed Forces (Special Powers) Act could, if implemented, transform the Centre-periphery debate in the country. Instead, all that the common minimum programme suggests is yet another commission which is standard stratagem for burying the matter indefinitely.

Whether the Sarkaria commission's recommendations are implemented or we wait the formation of another commission, at least the left should mount guard against the threat of turning the scales further against the states on the sly. This is precisely what the CMP proposal to substitute the state sales tax instrument by a Centrally-regulated and Centrally-controlled value added tax system intends to do. Already, the banking institutions are under the total command of the Centre, market borrowings, including borrowings from overseas, are determined by the Centre, deficit financing ' the printing of notes ' is its exclusive prerogative, the major tax heads, for instance, corporations and income taxes, excise duties and taxes on foreign trade, et al, are all controlled by it.

The only major source of revenue-raising still resting with the states was sales taxation. Even this right the Centre is now intending to steal away, with few visible signs of resistance on behalf of the states. Is it absentmindedness, or fatalism, which is at work' The VAT scheme is not an accidental episode. The Fund-Bank mentors have been for years on end advising New Delhi to centralize in toto the country's fiscal system via substituting sales tax by a turn-over tax whose contours and contents will be absolutely under the thumb of the Centre. Once that happens, the possibility of radical groups using the outpost of a state administration to raise the banner of resistance against a Centre presided over by forces of feudalism or capitalism or both will be effectively scotched. That grand design is about to be consummated in action; the response from the left till now is total silence.

A pity, not the left, it is Laloo Prasad Yadav, who, in his crude, naughty manner, has hit the nail on the head; if the Centre can print notes, why should not the states claim to have the same right' The question is bound to come to even greater relevance should the prerogative to impose sales tax too be taken away from the states; they would thus strut in the altogether in the council chamber. And the conscientious ones, who attempt to draw attention to the danger lurking in innocuous-sounding proposals such as integrating the country's river network at one end, and the fiscal system at the other, would be duly condemned as disruptors or worse.

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