New Democracy, December 2016

NEW DEMOCRACY
Mobiliz
e the P
eople a
gainst this
Mobilize
People
ag
Sinister Attac
kb
y Modi Go
vt.
Attack
by
Govt.
In a pre-emptive move, Modi led RSS-BJP Govt. has launched a severe

attack on the people by demonetizing notes of Rs. 500 and Rs. 1000
denomination. In one move Modi Govt. has taken out 86% of the currency
in circulation. It has seriously affected industrial and agricultural operations
and created enormous difficulties for the poor and middle classes. Modi
Govt. has tried to hit many birds with this stone.
Modi Govt. has gone for demonetization in the name of unearthing black
money. Before 2014 elections, Modi and BJP had promised to bring back
black money from foreign shores and deposit Rs. 15 lakh in the account of
every Indian. This promise was forgotten by Modi and later termed a Jumla
by his Man Friday BJP President Amit Shah. The demonetization exercise
is an attempt to deflect the question of black money, 72% of which is
estimated to be in foreign countries. Modi Govt. has not only done nothing
to bring this back, it has not even published the names supplied by Germany
or even those in Panama Papers. Further Modi Govt. has increased the
amount permitted to be taken abroad by three times over, thus augmenting
the drain of India resources abroad.
This whole exercise of Modi Govt. is aimed at misdirecting the question
of black money from big sharks to petty tax dodgers, from big corporate to
small entrepreneurs, shopkeepers and rich among the landowning peasants.
No wonder the big corporate, foreign and domestic, have welcomed the
move.
Demonetization has been attempted to shore up the public sector banks
(PSBs) which stood badly broken due to the huge pile up of bad loans
which have sunk, which are called Non-Performing Assets (NPAs). The
total NPAs are estimated to be nearly 8 lakh crores. Of these nearly 1.54
lakh crores had been waived off by Modi Govt. over the last two years.
Compare this with the petty loans of peasants for which they have to bear
the ignominy of having to go to jail. Waiving off peasants' loans makes the
corporate media label the move as 'populist' while there is not even a whimper
at such a colossal showering of public money on corporate. Their failure is
called, in the words of Arun Jaitley, a 'failure of the business model' while
December,, 2016
Organ of the Central Committee, CPI(ML)

that of the common man is termed as swindling of public money. Collusion
of BJP Govt. with the likes of Vijay Mallya and Lalit Modi is well known.
The twin aims behind the demonetization are the non-return of a significant
amount of currency to the banks by the stipulated time which would wipe
off these as liabilities from the banking system and increase in the tax
revenue of the Govt. accruing from such deposits in the banks. Both these
were meant to make PSBs breathe easy and enable them to make further
loans to corporate (and thus generate more NPAs) and increase Govt.
income both from increased collection of taxes as well as increased ability
to borrow from the Banks. This waiving off of NPAs from the savings of the
common people has been termed as the biggest scam todate.
Soon after claiming this as a 'surgical strike' against black money, Modi
Govt. has shifted gears claiming that this was aimed at promoting cashless
transactions. One obvious benefit to the Govt. would of course be greater
collection of indirect taxes from the people. But this would also mean greater
business for the MNCs indulging in payment business. These companies
are mostly foreign owned, that too owned by western countries. Again no
wonder that imperialist countries have hailed this drive towards cashless
economy.
Demonetization is a reflection of the deep crisis in Indian economy.
Faced with dwindling markets for exports and lack of domestic market due
to low purchasing power of the people, Indian ruling classes have been
injecting money into the system to shore up the growth rate. They have
been giving 'subprime' loans to big corporate which have further deepened
the crisis. Indian rulers have refused to take the proper lesson from the
explosion of global financial economic crisis and have resorted to shortsighted policies. They have not cared to address the real problem i.e. lack
of domestic demand nor could they do so wedded as they are to the interests
of the tiny minority of exploiting sections- foreign and domestic. They have
been pursuing a failed model. Now that the crisis of the system has
deepened further, they have launched this pre-emptive strike lest the people
come out against the policies pursued by them.
The shortage of cash is not due to poor implementation of this measure
as some parliamentary opposition parties and commentators are claiming
and is being propagated by the corporate media. This shortage was all
along part of this drive of Modi Govt. Nor are the sufferings of the people
December, 2016
NEW DEMOCRACY
Demonetiza
tion
oor pa
y
Demonetization
tion - The P
Poor
pay
for the Debts of the Super Rich
accidental. These are meant to drive home the point that the demand for
bringing back black money is very dangerous. It is the punishment meted
out to the people for demanding action against the big sharks who swindle
their labour and the natural resources of the country. The sinister nature of
the offensive demonstrates the contempt that Modi led RSS-BJP
dispensation has for the people.
Integrating this pro-corporate move with its communal mobilization
strategy, Modi led RSS-BJP Govt. has termed this move as targeted against
'terrorism' particularly Pakistan sponsored terrorism. They have linked this
terrorism to fake currency being pumped into the monetary system of India
by Pakistan. This is an attempt by Modi Govt. to keep up its anti-Pakistan
jingoism and further deepen the communal division RSS-BJP carve out in
the name of Pakistan. The veracity of this claim is very much doubtful,
both about the overall amount of fake currency as well as its origin in
Pakistan. Seizure of fake notes of new denomination have refuted the Govt.
propaganda. Printing of fake notes has no link with demonetization except
that those indulging in this exercise would have to undertake this afresh.
Such is the strident note of this propaganda and such is the frenzy around
it built by the corporate media that voices of sanity are being drowned in
the din of this 'nationalist' outpouring.
People have been victims of this sinister attack by Modi Govt. They
are being subjected to joblessness, penury, starvation, inability to even
seek treatment. First Arun Jaitley talked of people facing problems for only
a week, then Modi sought 50 days from the people. Now they are talking of
a longer period of suffering. The patience of the people is wearing thin.
Over a hundred have died standing in the never-ending queues before the
cashless banks and ATMs. They are beginning to protest and these protests
are bound to gather steam with passage of time and continuation of their
difficulties.
This is a giant exercise by Modi led RSS-BJP Govt. If they are
successful in this attack against the people, their impunity will grow and a
big step would be taken in their stride towards imposing fascist dictatorship
over the country. Owners of big chunks of black money are out to annoint
Modi a crusader against black money. The words would lose their ordinary
meaning. People will groan under the boots of fascist repression. The time
to act and resist it is now.
December,, 2016
- SK Mohan
'We have land.
We have water.
And we make mud.
-
Ivan Kulekov
The November 8th 2016 announcement by the Indian Prime Minister and
subsequent decisions and statements by the Government will remain etched
as landmark events in the economic and political history of India. While
some went to the extent of measuring ones patriotism with the length of
the long winding queues before bank branches, very soon the initial euphoria
gave way to exasperation. The tone has changed noticeably. Some of those
who praised it as a bold, master stroke have later started grumbling about
bad execution.
The discussion about the Governments decision and its consequences
will invariably be coloured by ones beliefs and perspectives. Yet, it is
important to understand the background before one comes to a concrete
conclusion. The truth behind the proclamations needs to be ascertained
based on the ground reality and the consequences.
What ails the banking sector? The IMF and World Bank have been
mentioning the Non-Performing Assets (NPA) of India for a long time.
According to IMF, Non-performing assets amount to 5.9% of the total
amount of loans in India. The World Bank estimated that the bad debts
accounted for 2.4% of the total lending by the banks in year 2010 and it
rose to 4% by the year 2014. The bad debt ratio is double that of countries
like Indonesia, Malaysia and Thailand that rank next to India. The Wall
Street Journal estimated that the public sector banks account for 90% of
the NPA in India. Reuters reported in June 2016 that the bad debts rose to
December, 2016
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a staggering 11.3% for the public sector banks in India (as cited in the
Indian Express). The Wall Street Journal wrote on February 13, 2015 that
the Indian government estimated that there is need for an infusion of Rs.
4.5 lakh crores (US$ 75 billion) during the next four years for them to recover.
It is in this context that banks wrote off Rs.1.14 lakh crores during the
years 2013 -2015. While Rs.2.11 lakh crores of bad debts were written off
between 2012 and 2015, more than half those bad debts, Rs.1.14 lakh
crores, were written off during the years 2013 and 2015. Certainly, achche
din! Of course, the question is for whom? The Indian Express sought to
know the names of defaulters who owed more than Rs.100 crores to the
banks through an RTI application. The Reserve Bank washed its hands off
stating that it doesnt have the details. One has to be a patriot without any
questions and needs a willing suspension of disbelief!
With the current Government decision, the cash registers are ringing
with forced deposits. Rs.3 lakh crores were deposited in the first three
days. Thus, this is a disingenuous solution adopted by the Government to
infuse capital in to the banking sector denuded by reckless lending to the
super rich and the big industrialists followed by subsequent write offs.
Concomitant to this are the other potential political benefits that accrue to
the ruling party by affecting the preparations of rival parties in the ensuing
elections in various states along with the creation of a political environment
that precludes any discussion in the name of patriotism.
Surgical strike? The current measures are being touted as a surgical
strike on black money and a death blow to the terror funding through
counterfeit currency notes. Can one believe in such propaganda unleashed
through a media blitzkrieg when the government displayed such alacrity in
writing off the debts of the super-rich in the name of NPAs? Does it not aid
the black money?
Firstly, it wasnt such a surgical strike as it is made out to be. Leaving
aside the speculation and the reports that some of the friends of the
Government knew of the decision well in advance, here are some hard
facts that need to be considered.
There was an unusual activity on the banking front during the months of
September and October, prior to the declaration on 8th of November. These
can be gleaned from the data from the RBI itself. If one takes the banking
deposits, the fortnight of 2016 September 16th 30th witnessed a spike in the
December,, 2016
deposits to the tune of Rs. 3,55,570 crores when compared to the previous
quarter. The same was observed in the month of October 2016 as well. The
Minister of Finance attributes it to the payment of arrears to the Central
Government staff. Incidentally, the arrears account for only Rs. 35,000 crores1.
This becomes even more obvious if one looks at the deposit rates during the
previous quarters.
Similarly, the banks also witnessed a spurt in cash withdrawals during
the days prior to the announcement on 8th of November. The withdrawals
by 28th October 2016 were twice the five year average of cash withdrawals
in the same period in the previous years. While the five year average of
cash withdrawals stood at Rs. 1.16 lakh crores, they reached Rs. 2.56
lakh crores in October 20162. One plausible explanation can be that these
hurried withdrawals were made to convert the same into assets of other
form. Further, cash could be deposited back into banks by them as it can
be shown as income from a known source with a hefty commission of 20 30% from those requiring a cover!
It can be easily understood that there was a concerted effort and activity
to create even more black money before 8th of November. That too in the
name of a surgical strike on black money!
Now let us look at the question of black money. As many economists
say, it is nave to imagine black money in the form of currency notes
stashed in bags. It gets created in both the realms of production as well as
circulation. The Whitepaper published by the Ministry of Finance in May
2012 defined black money as assets or resources that have neither been
reported to the public authorities at the time of their generation nor disclosed
at any point of time during their possession. It further noted, In addition to
wealth earned through illegal means, the term black money would also
include legal income that is concealed from public authorities. Apart from
the income not shown in books of accounts, it gets created even through
numerous manipulations of books of accounts (like manipulation of sales
and receipts, manipulation of expenses, bogus expenses to foreign entities,
manipulation of capital, manipulation of closing stock and manipulation of
capital expenses). Thus the roots of black money should be located in
the system and the policies adopted by the government. The 1990s added
huge sums of black money as the government aggressively implemented
privatization. It continues to exist in the form of moveable and immoveable
assets. Global Financial Integrity, a Washington D.C. based research
December, 2016
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organisation, estimated that illicit outflows from India total over US $50
billion (Rs. 3,30,000 crores) annually 3. Some estimate that about 72% of
black money could take the form of illicit foreign assets. Some estimates
further say that black money held in the form of currency would not exceed
6% of total black money4.
It needs to be noted that current measures do not aim to touch the
black money that moves/ moved out of India. The current Government
increased the outward remittance limit for individuals twice from US$ 75,000
to US$ 1,25,000 and then to US$ 2,50,00 in June 2014 and February 2015.
This limit was enhanced under the Liberalized Remittance Scheme (LRS).
Reserve Bank noted that FY16 witnessed a 3.5 fold jump in remittance
over the previous year from US$ 1.3 billion to US$ 4.6 billion5,6. The scheme
allowed for purchase of immoveable assets in foreign countries. This
includes amount sent for students (studies abroad), which roughly accounts
for one fourth of the outward remittances. Other remittances in the form of
foreign deposits, gifts, travel, maintenance of close relatives, equity/ debt
witnessed an increase ranging from two to sixty times. It becomes clear
that those with intimate relation with the Government knew of the current
surgical strikes much earlier, more than a year in advance to be precise!
The current Government waived off corporate taxes to the tune of Rs.
5.92 lakh crores during the financial year 2014-15. This needs to be added
to further write off of Rs. 1.14 lakh crores in the name of bad debts. If this
is not aiding the creation of black money, what else can we describe this
as? This contrasts with the wicked position the Reserve Bank and Central
government took in opposing the waiver of farmers' debt in states affected
by severe drought. Can one expect such policy makers to strike at the
roots of black money?
There are varying estimates on the quantum of black money in India.
The estimates range from 25-30% of GDP to 75% of GDP. On the other
hand the currency in circulation amounts to 12% of GDP. In this, the old
high denomination notes (of Rs. 500 and Rs.1000) amount to 85% total
notes in circulation, i.e., 10% of the GDP. In this what is the percentage of
black money stashed away in the money bags? No one has a clear estimate
as yet. Of the Rs. 17,50,000 crores total money in circulation, the current
demonetisation rendered useless Rs. 14,50,000 crores which is in the
form of Rs.500 and Rs.1000 notes. Some estimate that black money of
around Rs. 3,00,000 crores would cease to exist with the demonetisation.
December,, 2016

This is yet to be ascertained. What is the value of this money when one
considers the estimate that the black money in the form of currency notes
does not exceed 6% of total black money? Even if one considers the
lowest estimate of black money being 25% of GDP, this does not account
for more than 10% of it. What is the price that is being paid by the poorer
people for this? Who are those standing in long queues for days and hours?
Who are those people dying in distress? On the other hand, we see an
ostentatious display of wealth without in the least being affected by the
demonetisation.
There is yet another propaganda in the name of patriotism about dealing
a death blow to terror funding. It is being said that the Government of the
neighbouring country and Dawood Ibrahim are making a concerted effort to
induct huge amounts of counterfeit currency notes in to India to fund
terrorism. Even the Reserve Bank statistics belie such propaganda. As
per the RBI statistics, the total number of counterfeit notes identified during
FY 2015-16 are 6,32,932. This just amounts to 0.0000070% of total notes
in circulation. Hardly two weeks into the introduction of the new series of
Rs. 2000 notes, there are already reports indicating the identification of
counterfeit notes for the same. So much for the master stroke dealing a
death blow to terror funding!
Who bears the brunt? The current decisions are being justified in the
name of short term pain and difficulties leading to significant long term
gains. Who gains and who pays the price with the pain is the question that
needs to be asked. There are various analyses assessing the implications
and negative effect on the informal sector, consumption based businesses
and contraction in the revenue of the states. It is being said that the
replenishment of cash to reach the preexisting levels will take at least one
year. This is further going to exacerbate the challenges faced by the people
and the economy.
The measures taken by the government in the name of technology and
financial inclusion are mere hogwash. The irony is not lost when the famed
Jan Dhan Yojana accounts once touted as a big success earlier have now
apparently become conduits to deposit black money in to banks!
The rural areas and agriculture are going to be hard hit. The financial
services and the banking sector have been urban centric and the cooperative
sector has shrunk due to utter neglect. There has been an attempt by the
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main stream banks to remain focused on urban areas through licenses for
small banks and payment banks meant for rural areas. The response for
the licenses for such banks has been lukewarm. On the other hand, the
current Government announced its plans to reduce its stake in the public
sector banks to just 52%. As 27 public sector banks account for 70% bank
branches and deposits in the country, these decisions are further going to
affect rural credit facility badly. The surgical strikes are going to further
the strangle hold of usury in the rural areas. Underdeveloped regions, rural
areas and poorer sections will have to bear the brunt. The situation could
take a further dangerous turn if the ruling party doesnt reap the benefits it
expects with the current measures. It will then whip up the nationalist
sentiments with further escalations across the border, there by suppressing
any internal dissent and debate on its mala fide, ill-conceived and badly
executed policy measures.
(Endnotes)
1
https://www.thequint.com/business/2016/11/16/bank-spike-deposits-september-blackmoney-currency-ban-demonetisation-second-half-bjp-modi-kejriwal-rbi
2
http://www.jantakareporter.com/blog/currency-ban-rs-60000-crores-scam/75756/
http://blogs.economictimes.indiatimes.com/the-needles-eye/will-narendra-modi-drive-thestake-into-indias-black-heart/
4
http://knowledge.wharton.upenn.edu/article/demonetization-india-will-pay-price/
http://indianexpress.com/article/business/banking-and-finance/1-billion-was-sentoverseas-for-students-in-last-nine-months-rbi-2759870/
6
http://indianexpress.com/article/business/business-others/fy16-outward-remittance-flowjumps-3-5-times-post-revised-norms-2798024/
From Surgical strike on black

money to Going cashless
SK Mohan
Oh, what a tangled web we weave...when first we practice
Walter Scott, Marmion
to deceive. After sounding the bugle for War on black money on the night of 8th
November, the Generals appear to have changed the tack, hardly three
weeks into it. Prime Ministers Mann ki Baat and the RBI Governors
interview on 27th November emphasised the need for Going cashless with
less cash. It is interesting to note that the Government's press release and
the Prime Ministers speech announcing demonetisation harped primarily
on the issue of black money and terror funding through counterfeit notes.
There wasnt much about Going cashless then. There is an obvious shift
in the narrative. While one can agree to the fact that there exists a (close)
association between cash payments and black money, it needs to be
recognised that they are not the same. Curbing black money and
encouraging cashless payments are two different objectives. The means
and methods to achieve those objectives would have to be different. Leaving
aside the political motives of the party in power, the new objective and
policies of the government need to be assessed based on the ground reality
and the consequences.
There are estimates that black money in the form of currency notes
does not exceed 6% of the total black money. It is nave to think of black
money existing solely in the form of cash bags without taking cognizance
of its creation and circulation as a complex, dynamic process.
Notwithstanding such naivety, ignorance or political designs behind the
narratives, one should understand as to what has prompted the government
to change the tack.
&
http://indilens.com/201290 liberalized-remittance-scheme-slab-in-modi-raj-for-nri/
December,, 2016
Of Shifting Sands and Pursuing Mirages
10
December, 2016
NEW DEMOCRACY
The old high denominations notes in circulation as on 8 November
amounted to Rs.15.44 lakh crore (Rs.8.58 lakh crore in Rs.500 notes and
Rs.6.86 lakh crore in Rs.1,000 notes)1.The Economic Times reports that
deposits in the two high denomination notes reached Rs.9.85 lakh crore by
3 rd December2. Further on 8th November, the total amount of actual cash
with the RBI as CRR was Rs.4.06 lakh crore according to the weekly bulletin
of the Central Bank. This cash, as per bankers, is usually sent mostly in
large currency notes. That means, already Rs.13.9 lakh crore has reached
the RBI and commercial banks in India. We still have 30th December as the
end date for the deposit of old high denomination notes. With this, the
previous estimates by some that around Rs.3 lakh crores would cease to
exist with the current demonetisation would not stand true. That means the
black money in the form of old high denomination notes that ceases to
exist may not cross Rs.1 lakh crore. On the other hand, the CMIE estimated
that the cost of the current demonetisation exercise would be around Rs.1.28
lakh crores3. What a monumental achievement! After all the suffering
enforced on the people, making them stand in long queues for hours and
days shunning all productive work and regular tasks in the name of proving
ones patriotism and after all that avoidable loss of lives, the war on black
money has yielded a sum that is less than the cost involved! Was it a
mountain or just a mole hill?
th
The government says that cashless payments are the key to

development and to curtailing corruption. JAM (Jan Dhan accounts, Aadhaar
number and Mobile phones) is being touted as the panacea for all ills and
issues. India is a country where the majority of the work force is in the
informal sector and where 85% of retail payments are carried out in cash.
The promise of leap frogging overnight in to a cashless state from such a
reality through an arbitrary governmental action is to fool people. They find
it easy, as they did during the elections. They promised to credit every
account with Rs.15 lakh with the money brought back from Swiss banks.
The money is yet to see the light!
Payments A new, profitable business

Payments is now being considered as a profitable business across the
globe. There are many types of payments. At a domestic level, there are
person to person (P2P) payments, consumer to business (C2B), business
to business (B2B), government payments to/ from people, businesses and
December,, 2016
11

employees etc. Then there are cross border payments involving currency
exchange. A multitude of payment instruments (credit cards, debit cards,
prepaid cards, cheques, ACH/ECS, fund transfers (NEFT, RTGS), e-wallets)
are available to various sections of people with the expansion of banking
services and technology development. These payments are in turn facilitated
by channels like ATM, PoS internet banking, mobile banking. There are
networks and clearing houses enabling smooth processing and settlements
between various entities, banks and financial institutions. Dependent
primarily on the banks, the payment processing was considered as less
attractive a decade ago. Boston Consulting Group (BCG) estimated that
the payments accounted for 35% revenues and 40% of the expenses. With
the changes in the way the banks are managed (technology and operations),
this is now changing. The BCG estimates that the payments industry
reached US$1.1 trillion in year 2015 and it is expected to double by the
year 2025. It is no surprise that India assumes significance as an emerging
market in the eyes of large enterprises, banks and IT companies.
The concrete conditions obtaining in India are unique and more complex.
Banking sector focused on metropolitan cities and urban areas, a large
majority of people lacking access to / familiarity with financial services
and large chunk of work force in the informal sector, characterize the
conditions. The economic reforms in 1990s have further exacerbated the
situation. A RBI report in 2011 admitted that the banking business is
concentrated in the six metros (46% of total deposits and 56% of total
credit). 5,210 bank branches in rural India were closed down for not being
profitable. Two bank branches were shut down on each working day and it
should be noted that 5,960 bank branches were added in the six metros
during the same period4. Those were also the days when they advertised
India shining. Of the total ATMs, only 18% were in the rural areas (RBI
Report, 2015). Various models like Banking Correspondents, Local Area
Banks and the recent Small Banks and Payment Banks have been
introduced to absolve the mainstream banks of their responsibility towards
rural areas. It should be noted that the recent Payment Banks model
involves Telecom companies (Airtel, Vodafone), Microfinance companies
(FINO) and other enterprises (Reliance, Sun Pharmaceuticals).
It is in this context that the problem of meeting the payment needs of
people involved in the large informal sector comes in to picture. Be it a
construction worker from Srikaulam district working in Chennai or a
12
December, 2016
NEW DEMOCRACY
restaurant worker from North Eastern states working in South Indian cities,
a daily wage labourer from Bihar working in Mumbai or Delhi, they need
their earnings to be remitted to their family members. On the other hand,
there are government payments to NREGA workers, pension payments to
the elderly etc. There is this question of last mile delivery of payments to
reach the beneficiaries in the remote areas and of making money out of the
fees for the processing of such payments. This is an untapped opportunity
and an interesting problem to be solved actively by the consulting
companies, Startups, Telecom companies and microfinance companies.
The Visionary leader obviously has to be deft in sniffing a profitable
business avenue.
Who is going to benefit from the payments business?

Despite the well-known impediments hindering the growth of non-cash
payments, India is projected as a key market for payments. The World
Payment Report 2016 indicated, China and India will likely have continued
to spur transaction growth in Emerging Asia, as regulatory intervention,
increased card penetration and increased mobile payments contribute to
non-cash transactions. A 2009 McKinsey report stated, Indias payments
industry ranks fifth among Asian countries by revenue. As the payments
infrastructure develops, we anticipate greater intermediation by banks to
spur revenue growth by about 17 percent CAGR, delivering annual revenues
of around $45billion by 20155. In a similar vein, the Boston Consulting
Group and Google July 2016 Report mentioned, India now represents one
of the largest market opportunities for payments.' It estimated, 'The total
payments on digital payment instruments to be in the range of USD 500
billion by 2020, up from the current estimates of approximately USD 450
billionwith a transaction fee on these transactions in the range of 0.50 to
0.75 percent for B2B and 2 percent for P2P, the Indian digital payment
industry could be worth approximately USD 5 billion in revenues by 20206.
It is in this context that much of activity is visible in the digital payments
space in India with an eye on the market opportunity and potential. It is
hard to miss the excitement between the two parties, when Microsoft
founder Bill Gate met Indias IT minister on 16th November to discuss about
Microsofts collaboration with digital India, just days after the
announcement of demonetization. The Business Standard reported, The
meeting, which went on for 45 minutes, was attended by senior officers of
December,, 2016
13

the IT ministry as well as Gates and members of the Bill and Melinda
Gates Foundation. Sources said Gates was interested in getting into the
business of e-payments in India as he wants to streamline the digital
payments system for economically weaker sections in India. Industry
experts said Microsoft was anyway providing back-end support to a number
of payments banks in India, which are set to launch in the next few months.
The ministry has requested the Foundation to be part of the digitalising
process 7. To connect the dots, one should only remember that Bill and
Melinda Gates Foundation launched Better Than Cash Alliance with a
partnership of governments (including that of India, which joined in
September 2015), companies, and international organizations that
accelerates the transition from cash to digital payments. The Alliance is
funded by the Bill & Melinda Gates Foundation, Citi Foundation, Ford
Foundation, MasterCard, Omidyar Network, United States Agency for
International Development (USAID), and Visa. They build the door and
Opportunity knocks!
Faulty models
The example of cashless payments in the developed countries is being
presented as the model. Sweden, Norway, Finland and Singapore are touted
as models worthy of emulation. Firstly, these countries havent reached
such a stage overnight through hurried, arbitrary policy decisions. The other
aspects that need to be factored in are social and cultural environment,
payment behaviour and habits of various strata of people. While credit
card payments are prevalent in the US and the UK, debit card and cash
payments are prevalent in countries like Germany, Italy, Spain and Portugal.
It was observed that Debit cards gained prominence over credit cards after
the crisis in the US. John C. Williams, President and CEO of Federal Reserve
Bank of San Francisco noted that, Since the start of the recession in
December 2007 and throughout the recovery, the value of U. S. currency
in circulation has risen dramatically. It is now fully 42% higher than it was
five years ago8. He further noted that, In the six months following the fall
of the investment bank Lehman Brothers in 2008, holdings of $100 bills
soared by $58 billion, a 10% jump. And this is continuing.
It is also wrong to view the (lesser) cash use as a percentage of GDP
as a marker for development. While in India it is at 12%, the average cash
use as a percentage of GDP is 15.4% in West European countries9. The
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December, 2016
NEW DEMOCRACY
situation in the developing countries will be different as their needs are
different. The average Year-on-Year Growth in Currency in Circulation for
2009-2013 in the BRICS Nations (Brazil, Russia, India, China and South
Africa) stood at 11%, while the Global Average was at 8.9% during the
same period. In case of Euro system the average was at 4.5%. The average
annual growth rate of cash in circulation is more than three times higher
than the average global economic growth (as estimated by the World Bank).
Thus the cash demand is increasing more than three times faster than
economic growth rates 10. One has to take the specific socio economic
conditions, growth and needs of the people in each country in to
consideration. With such an utter disregard for the specific conditions in
India and the needs of people in making policy decisions, how can one
claim an Indian perspective?
Impediments to cashless journey

MasterCard published a study Measuring progress toward a cashless
society based on its analysis of data from 33 countries in 2013. The study
measured nations' progress by looking at three factors, the Share of
cashless payments, Trajectory of cashless payments in the past five years
and Readiness for cashless payments. India is part of the 33 countries in
the study. The share of cashless payments in India was a mere 2%
(Singapore had the share of 61%). With regards to the Trajectory of cashless
payments in the past five years, MasterCard results were indexed across
all countries on a scale of 1100. Indias index was just 11 (China 100).
The Readiness for cashless payments was assessed based on four
prerequisites Access to financial services, Macro-economic and cultural
factors, Merchant scale and competition and finally Technology and
infrastructure. India scored 29 under this category (Canada 91 and Sweden
89)11. MasterCard also noted, Even in the most cashless countries on
Earth, like France and the Netherlands, cash still accounts for 40% or
more of all consumer transactions. In many emerging markets, the cashless
share of consumer transactions is effectively negligible. Yet another report
from VISA listed the following as the key impediments to the growth of
digital payments in India - an informal labour market and large shadow
economy, a large remittance-based economy, high propensity to save in
cash, gender imbalance in the use of digital payments, high cost of
acceptance infrastructure and insufficient focus on financial literacy 12.
December,, 2016
15
What were the consistent efforts by the government to overcome such

impediments? What results would be achieved with such lack of readiness
and deficient infrastructure? The rural areas, backward areas and the informal
sector, which have been subjected to utter neglect all along, are hard hit
by the current reckless, rash decisions. Who is liable for the fraud that can
occur as the vast majority lack financial awareness and there is a deficient
environment riddled with vulnerabilities? The recent security breach involving
32 million debit cards in India is a case in point. Most of the banks stated
that the breach occurred outside of their systems13. The onus will be on the
cardholders if an unauthorised transaction occurs after the banks have
alerted the customer. Another important aspect to consider is the absence
of any regulatory mechanism on the usage of customer data obtained by
various entities through mobile phones and telecom companies. Who will
be responsible for misuse of data related to payments and customer
behaviour in an environment where consumer privacy and sensitivity
towards confidentiality of data are considered as inconsequential? The digital
/ cashless payments can only spread through concerted efforts to overcome
the impediments. The impediments can be overcome through policies that
take peoples needs in to consideration and through measures that are
sensitive to the issues faced by the vast majority. An alternative method
would be to forcibly thrust arbitrary, ill-conceived decisions in an
irresponsible manner. That the government chose the latter option is evident.
And the people are suffering the consequences. There will be a day when
people strike back.
(Endnotes)
1
http://thewire.in/83706/demonetisation-government-shock-black-money/
http://economictimes.indiatimes.com/news/politics-and-nation/with-rs-9-9-lakhcrore-back-centres-estimates-may-go-for-a-toss/articleshow/55784118.cms
3
http://economictimes.indiatimes.com/news/economy/finance/recall-could-cost-amassive-rs-1-28-lakh-crore-says-cmie/articleshow/55608552.cms
Kavaljit Singh, Financial Inclusion in India: Ambitious but Ambiguous Plan,
Global Research, October1, 2014
4
16
December, 2016
NEW DEMOCRACY
A strategic review of Indias emerging payments market, McKinsey on
Payments, September 2009
5
Demonetization and Peasantry
Digital Payment 2020 the making of a $500 billion ecosystem in India, BCG,
Google, July 2016
6
http://www.business-standard.com/article/economy-policy/bill-gates-meets-itminister-to-discuss-microsoft-s-collaboration-with-digital-india116111701005_1.html
Ag
ricultur
e, R
ur
al Trade
Agricultur
riculture
Rur
ural
Demonetiz
ed b
y Pr
o-Cor
por
ate
Demonetized
by
Pro-Cor
o-Corpor
pora
te,,
Tax Hung
vt.
Hungrr y Go
Govt.
Ashish Mital
Cash is Dead Long Live Cash, Federal Reserve Bank of San Francisco 2012
Annual Report
8
Global Cash IndexTM, Q2, 2016
Recent Global Cash Demand, Produced by the ATM Industry Association, Mike
Lee, CEO, ATMIA, October 2015
10
A story is popular in the villages. Some thieves entered a village in the

dead of night. When the villagers raised an alarm of chor, chor, to escape
identification the thieves joined the ruckus and themselves started shouting
chor, chor. They ran around with the villagers in the darkness, looted
what they could and by morning bolted with the booty. Modi is doing just
that.
Demonetization of high currency notes by the Modi govt. has in one
shot ruined vast sections of agricultural economy and rural markets because
it has been accompanied with deliberate creation of a huge shortage of
small currency, continuing and increasing restrictions on withdrawals,
replacement with only difficult to exchange Rs 2000 notes- those too in
short supply.
Measuring progresstoward a cashless society, Exclusive insights from

MasterCard Advisors
11
Accelerating The Growth of Digital Payments in India, A Five-Year Outlook,

VISA, October, 2016
12
13
http://www.bloombergquint.com/business/2016/10/20/debit-card-fraud-bankscard-companies-claim-their-systems-are-secure
It is noteworthy that the Govt. consciously barred rural banks from

exchanging old notes from day one. Though after peasants protests the
Govt. permitted them to withdraw up to Rs 25,000 per week, the rural banks
never had that kind of cash to give. Thirdly, though the Govt. announced
after about two weeks that fertilizers and seeds would be available in old
notes, the currency had already lost a lot of credibility and Govt. outlets
are known to have poor and restricted quality of both. To top it all, Modis
much propagated Fasal Bima Yojnas did not spare the peasants. They
were forced to adjust, they postponed the last date of premium deposit,
but they still wanted peasants to pay up.
Smaller notes were assessed to be around 14 percent of all currency.
This serious cash crunch has had a disastrous impact on all cash
operations, particularly small and medium shops and farm trade, forcing
peasantry in particular to sell in distress, to barter, sell on deferred payments
and take to usurious borrowing, even as old debts remained and rose due
December,, 2016
17
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December, 2016
NEW DEMOCRACY
to continuing interest. Though peasants have not been able to sell their
paddy and obtain cash to repay their KCC loans, the loans stand, the
interest rises and they are denied new KCC loans, having defaulted in
repaying the old ones.
The immediate impact was on the sale of that kharif crop which is
harvested during November. Paddy for example is selling for as low as Rs
800 per quintal in cash in different mandis though its MSP is Rs 1470, i.e.
at 40-45% less! For the ordinary peasant this is against the normal distress
sale rate of 20% less than the MSP. In Punjab, Haryana and West UP
where harvesting was completed prior to demonetization, it fetched between
Rs 1250 to 1300 per quintal. Gradually now, with sustained cash deficiency
and govt. procurement centres not operating, sale of paddy has been almost
completely restrained. Better rate of up to Rs 1200 is being offered by
millers, but on payment deferred by 2 to 3 months!
Trade of perishable goods including vegetables and fruits has also
slowed down drastically and is probably the worst affected. This is having
an adverse impact on their growers. Normal flow of these items in mandis
has come down by almost 75%. Even small mandis like Jasra in Allahabad
which normally had a supply of 20 truck loads are happy to see 4 to 5
trucks coming in. Vegetable and fruits are supplied from as far as 50 to
100 kms to city mandis. With the rates falling and no guarantee of sale,
peasants are unsure of obtaining even the transport costs and many have
stopped risking the supply. Those who are managing to get their supplies
in are often told to sell at deferred payments. It has been reported that
chillies, potatoes and tomatoes have sold for as low as Rs 1 to 2 per kg in
Haryana mandis. Similar stories are coming from Nasik, Hapur and all the
known mandis of the country. In Lucknow one peasant openly gifted bags
of potatoes free of cost as they would not fetch even the transport cost.
This fall in rates has affected all perishable items and is sustained.
Peasants selling in Jasra for example, experienced sudden fall in rates on
November 9th and it has remained low ever since, picking up only by about
5 % for some items by Dec 20th. The rates of brinjals fell from Rs 1300 per
quintal to Rs 600, for cauliflower from Rs 1000 per hundred to Rs 400 per
hundred, for potatoes from Rs 1000-1200/q to Rs 600/q, for chillies from
Rs 1500 -1600/q to Rs 800/q, for tomatoes from Rs 2000/q to Rs 1000/q
and for the in season internationally renowned guavas from Rs 2500/q to
Rs 1200/q.
December,, 2016
19

Though most govt. procurement centres for paddy have not opened, the
one in Jasra has, only to refer all the peasants to the millers. As the supply
to the markets is increasing with the harvesting underway, the rate for
cash purchase has fallen. There are several big traders who are taking
advantage of this situation, have opened arhats in Jasra and Jari markets
and are purchasing paddy in cash at an open rate of Rs 800/q, a rate which
is likely to fall further.
Currency distress has also affected sugar cane growers, who normally
sell on deferred payments and accept cheque payments. Even where they
have received their cheques, which amount to a few lakh rupees, the cash
withdrawals from banks have been limited. This has led to delay in sowing
the next crop, to private borrowing and usurious rates. Fall in cane prices
have also resulted from some dip in prices of cash cane sale in this period
of cash crunch and in some areas rates have fallen by more than 20%.
Agriculture requires ready cash payments at every step to purchase
seeds, fertilizers, insecticides, tractor time for tilling and harvesting, labour
payments, diesel for irrigation, etc. There are several reports of both labour
operations and crop sale and purchases happening on credit and through
bartering. Such exchange always leads to un-kept promises with the weaker
suffering the loss.
Though there are various news reports that sowing of wheat, pulses and
oilseeds is higher this year than it was at the same stage (dates) last year,
the fact is that the cash crunch has adversely affected the economy of the
peasants and it is bound to have its negative effect on the sowing of the
next crop. Union Agriculture Ministry has already claimed that total rabi
season acreage is 327.62 lakh hectares as compared to 313.17 lakh hectares
in 2015 even though the sowing season has not ended. Analyzing the
various factors, one can assess the full impact only later, but as has
happened in West UP, after Kharif harvesting before November 8, sowing
of vegetables was normal, while sowing of wheat, which takes place normally
after mid November, has been adversely affected. Punjab Agricultural
Department, where sowing gets over early, has declared 5% reduction in
acreage this year due to demonetization. Another report claimed complete
acreage of 35 lakh hectares in Punjab, but it also mentioned that DAP
sale, which is required before sowing, was only 90% of normal. Those
sowing wheat have had to resort to widespread borrowing from the infamous
Arhatiyas, the Commission Agents of Punjab, numbering 26,000 in the
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December, 2016
NEW DEMOCRACY
state. Arhatiyas have been at the centre of causing peasant suicides in
Punjab. Those who have grown vegetables are managing their required
intensive labour operations by bartering food grain for wages; cashless if
you please.
The cash crunch has led to very serious consequences for rural labour
in all sectors. MNREGA work has almost stopped. With decreasing budget
allocations, low wages and deferred payments, despite all payments being
through the banks, it had already come down drastically even before the
demonetization. Now with severe restrictions on cash withdrawals and with
the burden of standing for long in the queues no one is even talking about
MNREGA work. It is estimated that it is just around 25% of what was
being done last year this time. Further, vegetable farming, plucking,
transport to mandis, carting and sale in the mandis are all heavily labour
dependent activities, requiring daily operations. These have come down
drastically. Decreased procurement and sale of paddy too has adversely
affected labour, particularly with respect to immediate payments.
Construction work in big as well as medium projects too has been affected
adversely and is affecting rural employment.
Another area which has been severely undermined has been
transportation and this too has impacted employment and food supply.
Ordinarily a truck needs to spend about Rs 10 per km and cashless
existence has prevented truck operations. The long term impact is yet to
come and will possibly come in the form of increased transport costs.
There are some pointers to this. Wheat prices have begun rising in areas
depending on supply from outside. Cotton supplies have fallen drastically
after demonetization leading to a rise in cotton prices.
Small and middle level industries and traders have been forced to down
shutters and send their employees home as there is little business. A
good example is of purchases made by rural people. Cycle sales have
come to almost zero while there is a strong dip in rural two wheeler sales.
It is the national bourgeiose which has been attacked and hence it is not
surprising that Tatas, Ambanis, the compradore sections and the American
Imperialists have openly supported demonetization.
One thing is very obvious from the actions taken by the Govt. and its
continuously changing stance and changes in the declared objectives since
November 8 - the Govt. is very conscious and very sure about what it was
December,, 2016
21

doing and it had meticulously planned its actions and responses. It is the
work of a very mischievous, fascist mind, dedicated to the service of the
corporate and an enemy of people. For example the cash shortage that has
been created was craftily designed to ruin the small businesses and
agriculture under the veil of attack on black money. After declaring
demonetization, deliberately only the 2000 rupee note was issued while
adequate supply of currency of all other denominations could have been
released. Modi govt. created mass hysteria about attack on black money
with demonetization, i.e. de-validating the 500 and 1000 rupee notes and of
only a little trouble to and 50 days of sacrifice by the poor in standing in
bank queues. Then within a few days only, further restrictions were imposed
on bank withdrawals, reducing the amount, inking the fingers, not permitting
repeated withdrawals by single person etc. Along with this, within a week
came the announcement of promoting and moving to cashless exchange,
using swipe machines, credit cards, etc. And then incentives were
announced of reducing charges on cashless transactions under various
categories and of monthly lotteries on cashless transactions for which about
Rs 250 crores would be spent.
There is an obvious design in this madness. It is purposeful and certainly
dedicated to achieve a goal. The effort has been to consciously create
cash shortage, sustain it and force people into cashless transactions. Of
course small shopkeepers, peasants by themselves also went in for cashless
exchange to the extent possible, by giving goods on credit, trying to buy
their stocks on credit, bartering, etc. But they reached their limit very soon.
Such credit normally ruins small businesses. That impact has been affected.
A number of small shops, kiosks, carts, will not be in business any more,
even after the cash crunch eases.
People innovated. To overcome the problem of exchanging high value
2000 notes some shops also accepted advanced deposits and there was
also news of petrol pumps and toll plazas issuing coupons of low value
which would be honoured by them. That too has not lasted.
The Govt.s plan has been to force more exchange through bank
accounts. To this end they have planned and designed even small cash
transactions to be accounted for through banks. They have issued POS,
i.e. Point of Sale centres, two for every village with a population of 10,000
and Unified Payment Interface or UPIs. These have come into the news
exactly one month after the distress of cash-less-ness and are being
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December, 2016
NEW DEMOCRACY
propagated as a solution. They are meant to not only promote sale of
commodities and services of all kinds, consumables, edibles, agricultural
inputs, ticketing, insurance, PAN card registrations, payment of school
fees, electricity bills and other govt. dues, share market operations, etc.
through a commercial POS or UPI which will obviously charge a
commission. These are to be under public private partnerships, PPPs.
The Govt. has already moved the banks in several places to open CSCs or
Common Service Centres, which are like bank outlets having cash
disbursement facility and operating through finger print recognition. These
have been opened by banks, but soon they will be franchised to Village
Level Entrepreneurs or VLEs.
What will be the impact of these several measures to operate cash
services and sales through electronic and internet connected service centres
remains to be seen. Obviously a section of the Indian population, already
developed to the level of operating commercial transactions through cards,
is happy at this imposition on the insensible rustics, who cant for nuts
understand development needs and have to be made to follow the new
dynamic. For them technology needs to be imposed on the people, as
India cant be left behind. It is another issue that even in the most developed
countries none of these measures is imposed and is yet only partially used,
catering to a minority of the transactions. There it is simply provided as a
facility. In India on the other hand there is a fascist streak in its propagation
today, led by BJP cadres and an aggressive media monopolized by big
business and in the rural area by aggressive landlords, who too actively
profess that this is a measure against black money. But all this, including
attack on Black Money, is not being systematically and comprehensively
opposed by the parliamentary opposition. They mostly refrained from
mobilizing the people as it is not their agenda and they cannot disturb the
interests of Indias ruling class.
For cashless transfers, Paytm and its ilk are also being promoted in
which money is deposited, as in a wallet and released through the mobile
into the recipient's Paytm account. It is like keeping a virtual wallet on the
mobile phone.
Ultimately these are all measures to force rural populations to adopt
transactions linked to the banks in place of cash. Whenever the cash flow
improves, several of these transactions will recoil back to earlier positions,
but villagers too will adopt some cashless transactions through these centres
December,, 2016
23

and as forced by the Govt., as with the Aadhar card or as is incentivized
by commercial considerations. And they will all be under greater pressure
to have Smart phones, payment Apps, Aadhar Cards, etc.
What does this have in store for peasantry and rural poor? Well, none of
this will change the rural social relationships, in fact they will further
strengthen landlord stranglehold over the poor. Essentially some of the
personal expenditures made by villagers will come to be publicly known
due to its transaction through the POR, CSC or VLE. It will become a
reason for the landlords to pressurize the poor for extractions. Secondly,
most villagers, being illiterate and unexposed to this technology, will depend
on those who have some knowledge and will end up paying them a service
charge as has happened with bank operations.
As one write up in Indian Express noted Digital wallets are for those
with some experience of the way digital transactions work. The unlettered,
the elderly, and those without smart phones will be largely left out. Poor
connectivity and patchy Internet are serious challenges.
Actually this measure is an attempt to push banking operations into
rural small money transactions and small trade. After promoting micro
lending in rural areas this appears to be the latest effort to enter into micro
expenditures, small trade. It is a tool which will help the profits of large
corporate including MNCs in selling directly as is being promoted by Flipcart,
Snap Deal, Amazon, Alibaba, EBay. It will help banks to get transaction
cuts. It will also help them to implement the GST, which is a tax favouring
the MNCs and Corporate by bringing at par small traders, small producers
and big operators.
It will help the Govt. which can plan to move transaction taxes, a new
form of indirect tax. It has been argued for some time now that even if a
very small tax is levied on transactions, it will increase the tax net and
collections several times. This has been under consideration for some time
and was once proposed by European Union also to enable charging
transaction tax on international payments, when it was thought that the
taxes imposed on China and India will enable Europe to tide over its crisis.
In India there are discussions on making a charge of 0.1 to 0.7% transaction
tax.
Of major importance here is the fact that agricultural income has so far
been exempt from taxation. It has often been aggressively argued, and
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December, 2016
NEW DEMOCRACY
more so by BJP and RSS that this is a window for money laundering by the
rural rich and powerful politicians and should be brought under the tax ambit.
While this may be true for a small section, the big landlords, the fact is that
agriculture is a loss making activity and important portion of the investments
in it comes from the labour done by peasantry at other places. India also
faces a hugely negative agricultural subsidy with diesel being sold at more
than double its cost price. Yet a section of Indias rich attack the agri
sector for not paying taxes. There is also no easy way for them to assess
it and tax the income. Transaction tax is a conspiratorial method to enforce
such a tax on all peasants. Even at 0.1% it is a huge tax and an indirect
one, one which will apply to all transactions, even loss making ones.
This strike on peasants, who constitute the most natural patriots of the
country, has put a very heavy burden on them. The benefit will naturally go
to big landlords, big grain traders, their agents and to foreign and Indian
corporate.
Question arises of the demands that stem from this situation. The Govt.
should extend the date for deposit of old notes till the end of the current
sowing season immediately, it should issue new currency in adequate
amount, it should start Govt. procurement of paddy in cash at the MSP, it
should freely provide new KCCs to all peasants, it should waive all loans
including KCC loans of all peasants including all loans of share croppers
and agricultural labourers, it should provide for full freedom to common
people to exchange currency and as in natural calamities, it should treat
demonetization as a calamity on the peasants and provide interim relief at
the rate of full crop compensation to peasants including share croppers
and agricultural labour.
It should also be asked to openly declare the secret door it has made
for the rich to exchange their old notes and also declare the names of all
secret bank account holders abroad, all investors in India through the
Mauritius route, all names in Panama papers, all holders of NPAs of Indian
banks and hold enquiry into the unaccounted assets of all multiple property
holders. That can be the only real attack on black money. Further an attack
has to be launched on the creation of black money and on corruption which
is one of the important generators of black money.
Demonetization - A Cruel Joke on

the Working Class
Aparna
The Anna Hazare Movement in Delhi showed how the serious issue of
corruption in governance could be inverted to lay all the moral blame at the
door of the ordinary citizen. Making the people defensive helped bypass the
twin question of corrupt, anti people rulers and policies of sale of the country
and its resources to corporate. The issues of unbridled corporate loot, of
huge scams by corrupt politicians, corrupt bureaucrats being middle men in
making huge money out of the sale of India, were equated with the bribe paid
by an ordinary cyclist to a policeman for letting go of his cycle at a red light or
with bribing a postman to get a money order released.
The Modi Govt. has carried forward this inversion of guilt with the determined
twin aim of not merely protecting the real defrauders of the country but also
providing for future possibilities of loot for them by stocking up the banks.
The method of RSS BJP is both sinister and diabolical, reeking of their fascist
methods. The vast masses including even the middle middle classes have
been plunged into an unimagined, continuing hell. Backed by a twisted,
mischievious propaganda machinery that says that the black money looted
from the country is right here, between you, it has managed to blind people to
the fact that the only target is the meagre 4-5% kept in untaxed cash by small
shopkeepers, owners etc. In the masses it induced an unhealthy glee by a
false sense of superiority- while you all suffer hell standing in line day after
day, grin because the guilty are also sweating it out. It is no matter that this
guilty is only a pint sized pigmy among giants. The suffering the people are
being put through relentlessly, the over 80 deaths for which no one is guilty
apparently as the people collectively submit to national interest all is not at
all mindless. It is to cure the people of ever daring to cast their gaze at the
looters of the country; they should be afraid of ever asking for those guilty of
hoarding the countrys wealth, or of accountability by ruling classes or their
representatives.
This is what Modi has decided to do by the current demonetization with
the extra benefit of being able to serve imperialists by opening up retail sector
December,, 2016
25
26
December, 2016
NEW DEMOCRACY
to corporate, forcing import of even grains and of course explaining away a

the economic slump which was coming anyway. The common people are
being exhausted by the elementary need to stand in serpentine queues day
after day,even for elementary money. Caught off guard, the physical exhaustion
is tiring out the ability to think straight while propaganda constantly bombards
them that this is 'for the nation'.
Machines in industries in the country have stood silent as workers stand

in lines. They are now silent as production has slowed down, as owners and
contractors are sending workers on forced leave. Labour chowks have desolate
crowds as anyone who can postpone construction work does so. Daily wagers
have been laid off in massive numbers. The problems of other unorganized
sections are equally acute.
For the working class of India, Modi has demonstrated his contempt full
score. Earlier, this Govt. has been doing its best to pauperize this class, rob
it of all its hard won rights, break unionization and push down wages to the
barest type of living, all in service of corporate masters. The vast sections of
unorganized private sector regular workers receive their wages by the 10th of
the month. A small section of these get wages on the 7th. In one brutal blow,
those who received payments on 7th and 8th November 2016 found their pay
rendered redundant. For those yet to get wages, workers and even small
owners went through hellish situations. In many places workers were offered
payments in old notes and went through days of standing in line simply to get
a meagre 2000 worth of these changed. If they have no account in the bank,
this is the money they were supposed to subsist on for the entire month.
Even those who had some money in the bank accounts and could have carried
on were denied the right to do so by having to stand in common lines day after
day for the same and also suffering the cap of banks on the amount they
could withdraw.
Punjabs famous textile industry has hit the doldrums(19th Dec.2016 Hindu).
This relies heavily on the winter months to boost profits. In the past one and
a half months 30 textile processing units have been closed due to a cash
crunch. There are a total of 60 such units and the rest are operating at about
30% capacity. These units prepare dyes and print fabrics and are the backbone
of 700 to 800 textile factories which do warp knitting, embroidery, spinning
etc. Layoffs have commenced as these units are labour intensive. According
to the Gen. Sec. of the Punjab Textile Manufacturers Association, the weaving
industry has seen a 50% retrenchment due to the twin problems of lack of
cash for wages as well as a drastic drop in orders. Retail sales based on
woollen fabrics are the worst affected. The zardori industry in Lucknow and
other parts of Uttar Pradesh is without work. Retrenchments are on in the
textile sector and this is the story of formal workers too. Already industries in
Tamil Nadu have laid off workers.
The Govt. was allowing exchange of upto Rs2000 till 30th December but
put a sudden stop on 24th November. This also has the same end of making
workers subsist on Rs. 2000 a month when the minimum wage for a helper is
nearing Rs. 10,000 in many states. This is the prelude to the dilution of Minimum
Wages Act contemplated in the anti worker labour law amendments which the
Modi govt. is proposing.
For the salaried working class like govt. employees, public sector and
organized private sectors who had received wages on the 1st of the month
through bank accounts or even cash, the situation is almost similar to that of
the other workers. Modis placebo of allowing ration shops to accept old notes
fell flat on its face as less than 50% workers in unorganized sectors have
ration cards and also ration shops refused to give change and demanded that
ration be taken for the entire note. The same is the experience at Mother dairy
booths.
December,, 2016
27
In Bengal 2500 workers of Sree Hanuman Jute Mill in Howrah were officially
told that the mill is shutting down (HT 7th Dec) because there is no cash
available. The Indian Jute Mill Association has anyway been seeking an urgent
meeting with the state Govt. 20,000 people in Murshidabad Dist. of W. Bengal
in Kamalpur and Durgapur (IE 16th Dec) used to earn 3000 to 4000 a month
rolling bidis. The Sec. of Bidi Merchants Association says that Central Bengal
has more than 6 lakh bidi workers. Most are now jobless not only because
there is no cash to pay the workers but also tendu leaves supply from
Chattisgarh, Jharkhand and Odisha has dried up due to the cash crunch. The
rent for the trucks is a lakh with Rs 20,000 to be supplied in cash compulsorily
for en route expenses. The district administration of Darjeeling in West Bengal
has expressed concern (21st Dec HT) over the growing unrest in tea gardens
which are already facing hunger and joblessness. Due to demonetization,
40% of the wages of November and the wages of December are still due.
Prior to demonetization the workers got weekly or fortnightly wages in cash.
Nearly 4.5 lakh workers are employed in this industry in Bengal. Post 8th Nov.
the State govt and the RBI worked out a system whereby an account under
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NEW DEMOCRACY
the DM would be used to deposit and withdraw money by managements to
disburse wages. RBI discontinued this and gave another formula which was
worked till 5th December. Now no further method has been advanced by the
RBI. There are no proper banking or ATM facilities in the tea gardens.
In Surat the diamond industry employs approx. 8 lakh workers. Hundreds
of small units of polishing and cutting have virtually not opened after Diwali.
20,000 diamond workers have already lost jobs as small units with 5-10
machines have shut down. 12 merchants of Surat are said to control 40% of
the citys diamond business while 60% of the work is done by thousands of
smaller and tiny units. In Agra (IE Dec 15th) 100 or so workers of a shoe
factory ( Tej Shoes) blocked the highway protesting against being paid in old
notes. This is also the situation in a majority of shoe factories in this city with
this sector employing 90% unorganized workers. 60% of the shoes sold in the
country are made in Agra, according to the report. And these are only a few
examples only of the widespread loss of jobs and of production that is occurring
in India. It is estimated that there will be job loss of 4 lakhs throughout the
country in which the attack on daily wage jobs is not accounted for. 2 lakh job
cuts are estimated in the e commerce sector as the cash on delivery services
come to a stuttering slowdown. Loss of 1 lakh jobs is estimated in the real
estate, construction and infrastructure sector.20% of the 2.5 lakh workers in
the leather industry are expected to be hit. The textile and garments sector
employs 32 million workers of which one fifth are daily wagers who have
already lost jobs.
Production of mobile phones in India is down by at least 40% due to
demonetisation (HT, Dec. 19, 2016). Handset manufacturers including Foxconn,
Flextronics and GDN Wistron are either cutting jobs or sending employees on
leave. Foxconn (Taiwan based, makes iphones for Apple) has sent 1700 out
of 8000 employees on paid leave. This company accounts for 70% of all
smart phones assembled in India. Local player, Lava, has stopped production
for 10 days. The Rs. 1,30,000 crore cellphone manufacturing industry primarily
depends on cash.
Domestic workers, another big section of employees are also facing
problems as owners have no new notes in which to make payments. Many
employers are offering to pay part of the salary by financing groceries by
online payments but this puts a restriction on the workers freedom and for
reasons that make it difficult to hold the employers guilty.
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In the private industrial sectors of Delhi, especially as studied in Okhla
and Mayapuri industrial areas, in the larger factories both of export and
mechanical industry the workers have remained relatively undisturbed wherever
payment by cheque or into accounts has been the norm. They do have a
problem with withdrawal, but owners are being considerate and giving workers
some hours off to go and stand in lines. It is in the small mechanical and other
units that there is mayhem as salary payment was in cash and as owners do
not place workers on record let alone giving them minimum wages. Here
workers received wages for November in old notes and have mostly been
able to exchange only a part of them as they either do not have bank accounts
or have an account in the village. What exchange was possible at all was only
after standing in lines for days and days. Workers with accounts who received
wages in cash have often been handed large sums of money as advance
payments in return for surrendering their original ID proofs to the owners.
Whilst many do not mind this, their problem is that the lump sum will not be
adjusted against stipulated minimum wage as the workman lacks bargaining
capacity for several reasons. Another category is of the daily wage workers
who are, quite simply, without jobs. Equally hard hit are the redi wallahs
selling lunches etc. in the industrial areas who neither have money for daily
investment as they do not have new notes and who are also facing a severe
lack of customers as workers also have no new notes to spend. Workers
employed in small concerns have moved in a fair number to the villages, also
because the owners are encouraging them to go and return after a few months.
The worst scenario is probably of the self employed construction workers of
Delhi of which a massive chunk is migrant in nature. On 16th Nov. IE reported
that the Sadar Bazar Bara Tooti Chowk, which it described as one of the
largest labour chowks of Delhi, has hordes of construction workers bereft of
work. Over 100 construction workers come daily to the Sarita Vihar labour
chowk and hang around the whole day in hope of at least some small work.
Many workers are eating one meal a day, and those whose families live in the
village have also taken to eating a meal at the local temple. Hindu of 16th Dec.
2016 described the situation in Azadpur Whole sale Mandi of Delhi, which is
the biggest wholesale market of the city, as one of trade collapse. Statesman
reported on 15th December that a day earlier 10,000 daily wage workers living
at Kirari, a slum in NW Delhi, held a demonstration against job losses. Here
there are around 15,000 small units making shirts, biscuits, trousers, shoes.
The other myth is that all people can have a bank account. They cannot.
The camps operating to open accounts ask for some identity document.
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Technically, accounts can be opened by the owner attesting to the worker on
the Company letterhead, but that means owning up to the workers. So the
contradiction moves from where it really is onto the continuing owner- worker
one. The workers forget that if the owners did not pay taxes to the Govt (i.e.
they hid the Govt.s share from it) they also did not pay the workers minimum
wages (i.e. hid the workers share from them). The Govt. is well aware of this.
However it has never lifted a finger to ensure that the owners deliver the
workers' minimum wages to them; rather Modi is reversing the labour laws
and the dismantling the machinery which enforces them. Now that the Govt.
is crusading about the untaxed income being its right, the working class has
a right to expect that the Govt. should have carried on this crusade for
implementation of labour laws too.
Opening accounts is only a step. What follows? Salaried working class
and employees through out the country gloated that the Govt. was right to
forcibly 'seize taxes' ( ofcourse all the while forgetting that this is at the most
5% of so called black money). They are not so sure now as they stand in
lines day after day but are told that they can actually withdraw paltry sums
like Rs.4000 from their accounts in spaces of 10 days irrespective of the
official announcements of Rs. 10,000 as there is now no money in the banks.
Everyone knows that it is in the first week that rents, wages of domestic
workers, are paid and groceries bought not to speak of school fees.
But not all business is at a standstill. Govt of India is going to import
20,000 tonnes of currency paper from 9 companies of Europe and Russia in
order to print notes. (IE, Dec. 12, 2016) These include a German company
which was blacklisted earlier. This import is thus far higher than the approx.
8000 tonnes imported in the current year. So the Govt. is doling out work to
foreign companies. Also delighting are Paytm (major shareholders are Alibaba
of China and its affiliate Ant Financial, Silicon Valley Bank, Reliance and
others. Yahoo and Japanese MNC Softbank are the major shareholders of
Alibaba) and Reliance with all the work pouring their way as are Amazon (US
) and other e-com companies which rely on pre-payments. Because now we
know that the real slogan is not no black money but use plastic money. Use
plastic money in a country with none to poor internet connectivity, with frequent
shut down of internet services in areas of struggle (In Kashmir, for instance,
which Central Govt. asserts is irrevocably part of India) or in Tamil Nadu
where a natural calamity like Cyclone Vardah knocked out internet services
and with rampant poverty and illiteracy. The probable idea is that the poor
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31

anyway need to buy nothing from the market. In all the hullabo and the peasants
facing cash crunch endangering the rabi crop, the Central Govt. has quietly
totally lifted import subsidies on foreign wheat, thus spelling ruin for the
indigenous crop. Anyway the Govt. of Modi is boasting and dancing about
plastic money being the issue because already bundles and bundles of new
money are being recovered from bank officials and BJP activists throughout
the country, counterfeit new notes of 2000 denomination have been recovered
in lakhs, so the country is bound to see beyond the false propaganda that the
'counterfeit money of terrorists will stop' sooner than later.
The working class of India must look beyond the obvious, must look beyond
the propaganda of the Central Govt. This Govt. is snatching jobs now invoking
patriotism and a major reason is that it could not force changes in labour laws
earlier also because of the fight put up by the working class. The economic
downturn in the world makes the needs of imperialists for loot much more
severe and Modi Govt. is out to bleed India dry for them. The effects of this
demonetization will be far reaching for the economy, for production in small
and middle scale industries in India. We must unite with those democratic
forces calling for a recall of this decision. Working class must demand that
the names of those who have bled Indias banks dry in NPAs should be made
public. Working class must demand that the money stashed in foreign banks
and accounts, in estates and gold, all of which is money out of the production
process in India and the real black money, be brought back immediately. We
must demand that all should have the right to withdraw freely from their bank
accounts and the banks must tell the people to whom they lend. It should be
made compulsory that all the excess taxes collected now be given in loans to
peasantry and small business alone in order to revive production. Trade
unions must come out to help workers decipher how the Modi govt. has attacked
them, while all the time creating circumstances where sometimes the owner
and at other times the bank manager appears as the main enemy. The trade
unions must lead the working class to fight back and expose the true intentions
of the Modi Govt. Of course for this it is necessary that they not only be
willing to expose the pro corporate pro imperialist policies of this Govt. but
also to lead the workers to fight these policies too.
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CC Comment
On R
ecent Inter
na
tional and
Recent
Interna
national
Na
tional De
velopments
National
Dev
International Developments
Decline of US imperialism, emergence of multi-polar world and
intensification of all the major contradictions in the world are leading to
eruption of a number of wars in different parts of the world. Shift in the
positions of different countries in their alignment with US imperialism has
been noticed in this period, which is the result of the declining power of US
imperialism and this has further handicapped US ability to counter its main
imperialist rivals. Different regions of the world are witnessing greater
instability.
Middle-East
Syrian conflict has become in a way a global conflict with different
imperialist powers and regional powers getting involved in the Syrian civil
war. Russian military intervention has changed the dynamics of the war in
Syria and Assad regime has been able to register military gains on the
ground. US imperialism is torn between its pretensions of fighting Islamic
militant groups and its collaboration with some of them in pursuit of its
strategy of regime change in Syria. US is also torn between its avowed
aim of collaborating with Russia in combating these groups and its reliance
on them for containing Russian influence in the region; its support to Kurds
in its struggle against ISIS and its alliance with Turkey which is fighting
against Kurds; its agreement with Iran on her nuclear programme and its
continued efforts to check rise of its power; its support to Iraq government
in its recent offensive against Mosul and its opposing the role of Shia
militias which have been the bedrock of all the offensives of Iraq government;
its support to Saudis and rulers of other Arab emirates and rising sentiment
against war atrocities committed by them; its all out support to Zionist
Israeli regime and its pretension for the solution of the problems of
Palestinians. US is caught in a web of contradictions in Middle-East.
Collapse of ceasefire in Syria, particularly in Aleppo, reached between
US and Russia in September this year, is an illustrative case of US hypocrisy
December,, 2016
33

and its inability to have its way. Initial period of ceasefire was one week. In
this period moderate militant groups formally supported by US and its
allies were to be separated from Al Nusra, which was affiliated to Al Qaeda.
After one week ceasefire was to continue between these moderate militant
groups and Govt. of Syria while Russia and US agreed for joint offensive
against ISIS and Al Nusra. But there are no moderate militant groups
which have any significant strength in Aleppo and Syria at large. These
groups supported by US and its allies are dependent on Al Nusra for their
military survival. To facilitate support by US imperialism, Al Nusra changed
its name and formally severed its affiliation to Al Qaeda and this severance
was endorsed by Al Qaeda itself. To extricate itself from the agreement
with Russia, US planes bombed Syrian military positions killing 62 Syrian
Armymen and wounding over a hundred of them. Further 18 trucks in the
aid convoy to Aleppo were bombed for which US and its allies blamed
Russia and/or Syria. But this convoy had been cleared by Syrian Army and
moreover bombs on trucks were not dropped from the air as there was no
damage to nearby ground. Russia and Syria denied this bombing and Russia
further claimed and offered to provide evidence of bombing by a militant
group. US and its allies showed no interest in finding out the truth. They
had no intention of carrying out their side of the bargain i.e. of separating
moderate militant groups supported by them from Al Nusra militants.
Bombing of besieged Eastern Aleppo recommenced with over 250,000
stranded in the besieged part of the city. France on behalf of western
imperialist powers moved a resolution calling for immediate halt to bombing
in Eastern Aleppo which Russia vetoed. In this resolution there was no
mention of Al Nusra i.e. it was a way to get around the commitment made
by US in its agreement with Russia. French resolution also reflected the
bad military situation of anti-Assad forces in Aleppo. Russia moved a
resolution along the lines embodied in the earlier US-Russia agreement. In
an interesting development Egypt voted in favour of the Russian resolution
in the Security Council. There has been growing contact between Egypt
and Russia as US has been maintaining relations with Muslim Brotherhood
forces in different countries including Egypt. After this vote, Saudi Arabia
tore its agreement with Egypt and stopped oil supply to Egypt. In the
meanwhile the UN special envoy offered to personally lead Al Nusra fighters
out of Eastern Aleppo to guarantee their safety, an offer which was rejected
by Al Nusra and other militant groups. In this stand-off hundreds of thousands
of civilians in Eastern Aleppo and other centres continue to be targeted in
this war in which Russia and US are supporting opposite sides. US threat
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to bomb Syrian military positions was met by a strong rebuff by the Russian
military's declaration that it would shoot down any hostile plane or missile.
Russia has moved its aircraft carrier and frigates to Mediterranean to bolster
its strength in Syria.
With the success of the Kurds in Northern Syria and victories scored
by them over ISIS in Kobane and other places in Northern Syria, Turkeys
Army has captured several places from ISIS including Jerabalus, along
with the militants supported by Turkey, mainly to prevent advance of Kurd
forces to the west of Euphrates river thus preventing linking of the western
and eastern areas of Kurdish resistance in Syria. Having failed in its strategy
to oust Assad and bring Syria under its control and to increase its influence
in the Arab world in the wake of Arab Spring, Turkey has revisited its
strategy. Finding itself isolated in the Syrian battlefield after shooting down
of a Russian Air Force plane, Turkish Govt. shifted its stance. It apologized
to Russia for downing of the plane. The aborted coup in Turkey by the
followers of Fetullah Gulen who is settled in the US, has quickened the
pace of this change. Turkey demanded US should extradite Gulen. Turkeys
strategy is to prevent Kurds of Syria from making gains particularly along
the border between Turkey and Syria and to gain as much influence as
possible in Syria and Iraq which are going through civil wars. Turkey is
focussed on denying space to Kurds along Syria-Turkey border and is
drawing close to Russia to fulfill this objective.
With Syrian civil war tilting in favour of Assad regime due to Russian
military intervention, there has been renewed fighting in Iraq. Iraq Govt.,
with US support, has launched an offensive against Mosul. Given the deep
divisions in Iraqi society, the fight for Mosul will be protracted. ISIS is
expected to put up a vigorous resistance to Iraqi Army and Kurdish forces.
ISIS has had time to prepare for the coming battle. In fact, fight in Fallujah
and Ramadi have also been protracted and much damage in terms of lives
and property has been there. Moreover, there is fierce competition among
different powers to take as much area from ISIS control as possible. While
Iraqi Govt. and Kurd Peshmerga forces aligned with US are pushing onto
Mosul, Turkey with its airforce base north of Mosul is keen to take part in
the fight. Turkey wishes to at least be party to control of Mosul besides
reducing efflux from Mosul of Sunni Muslims. Russian military intervention
and US unwillingness to set boots on the ground and lack of partners in the
Middle-East to fight on the ground, circumscribes US ability to influence
December,, 2016
35

the events in the Middle-East.
In the other corner of West Asia, war has escalated between Houthis
and Yemen Army and Gulf monarchies led by Saudi Arabia. Houthis, who
have been fighting against the Central Govt. for over a decade, have joined
forces with Army units led by ex-dictator Saleh against the Hadi Govt.
which has been imposed by western powers and Gulf monarchies. Islamist
militants also control part of the region, particularly in the eastern and
southern Yemen. Saudi Arabia led coalition is conducting air strikes for
more than a year which have caused a lot of civilian casualties. They have
bombed schools, hospitals, orphanages and the like. A funeral meeting of
a tribal chief was bombed by Saudis killing nearly 150 leaders and injuring
over 500 of them. This bombing of the funeral has been widely condemned.
Saudi Arabia led Gulf monarchies have been portraying this war as an
attempt to thwart Irans growing influence in the region. In fact Houthis are
no Iranian proxies and any way, Yemen is going through a civil war and not
a sectarian conflict between Shias and Sunnis. In fact the other major
force is Islamic militants, both Al Qaeda and Islamic State. While Al Qaeda
is co-operating with Saudi led Gulf monarchies' military campaign, IS has
been targeting troops of Hadi Govt. propped up by Saudis. Western powers,
particularly US imperialism, have been part of this war, providing military
equipment and logistic support to the air campaign being conducted by
Gulf monarchies. US sold 115 billion dollars worth of defense equipment to
Saudis over the last six years. US is now hypocritically demanding end to
war in Yemen while it is supporting and is the mainstay of the Saudi led
military campaign. The Yemen campaign is a failure of Saudi Arabia and
Gulf monarchies and of US imperialism backing them. Yemen is also a
startling failure of the Saudis to intensify Shia and Sunni divisions in Yemen.
A very important development in the region has been the election of
Michael Aoun as President of Lebanon after 26 months. During this period
the parliament in Lebanon could not elect a President. Aoun is aligned to
Hezbollah. The pro-Saudi and pro-West Saad Hariri section (representing
mostly Sunnis in Lebanon) too supported Aoun which signals a shift in
their stand. Hariri section has been disillusioned with Saudis and has come
to realize the new ground reality in West Asia post Russian military
intervention. It is a significant victory for Iran and its allies in West Asia.
Palestinians continue to suffer in West Asia while Zionist regime in
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December, 2016
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Israel continues to grab their land. While Palestinian cause evokes much
sympathy among the Arab people, anti-people regimes in the region
collaborate with Israel. These regimes only pay lip sympathy to Palestinians
while actually suppressing the movement of Palestinians and collaborating
with Zionist Israeli regime.
With the war in Syria tilting in favour of the Assad regime, the battle in
Iraq intensifying with participation of Shia militias and failure of its war in
Yemen, the Saudi monarchy is getting embroiled in deeper crisis. The fall
of this pillar of US imperialism in the Arab world would really be a qualitative
change in the region. While Turkey is trying to salvage whatever it can and
particularly focusing on containing Kurds, it is advantage Russia and Iran
in West Asia.
Pivot to Asia
President Obama had declared amid much fanfare last year that US
would deploy 60% of its air and naval forces in the Asia-Pacific region. The
objective of this military deployment is to contain military rise and
assertiveness of China. South China Sea's resources have become the
main bone of contention between China and its neighbours. US is mobilizing
all neighbouring countries against Chinas claim to most of the South China
Sea. However, countries of the region are seeing through US designs and
also inability of the US to militarily confront China. Many of them are wary
of antagonizing China for military and also economic reasons as US has
no further market access to offer to them while China is promising big
investment. US has been stoking confrontation in South China Sea and
China has been insisting on bilateral engagement on the issue with other
countries ruling out a multilateral forum to settle the issue.
A sharp blow has been given to Obamas Asian pivot by Philippines'
President Duterte who has threatened to terminate Philippines military ties
with US and has talked of forging closer relations with China and Russia.
The international arbitration award about which the US is making so much
noise was given in favour of Philippines whose President is talking of settling
the issue bilaterally with China rather than seeking implementation of the
award. The stand of the President of Philippines, a long term ally of US
imperialism, has undercut the position of Obama Admn. Such was the
isolation of US at the APEC summit in Laos that the US President alone
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37

referred to the ruling with no other head of state raising the issue. While
most of the countries of the region are apprehensive of the growing
assertiveness of China, not many are supporting the belligerent approach
of US Govt.
Recent period has seen slowdown of the Chinese economy. The reason
behind this slowdown is slackness of demand; external demand due to
continuing stagnation in western economies and also domestic demand.
Stimulus package has not helped in correcting the underlying factor of
relatively low purchasing power; it has only exacerbated the problem of
rising debt burden, with corporate debt increasing sharply. China has
witnessed sharp rise in the workers protests against working conditions.
China is increasing its investments in countries of Africa, Latin America
and Asia for supply of natural resources and infrastructure development.
China is intensifying exploitation of third world countries.
Brexit
In June 2016, British voted for exit from the European Union (EU) with
51.9% in favour of leaving EU. Widespread anger among British workers
and middle classes against their deteriorating conditions provided the
backdrop. But the reactionary sections of the bourgeoisie highlighted divisive
issues like immigration from third world countries. British voters expressed
their apprehension about the free movement of citizens from EU countries,
particularly from the Eastern Europe, into Britain despite its already
precarious employment situation and state of civic services. Brexit would
pose considerable danger to the British economy with some of the financial
services moving out of London. Brexit would also spur Scots (Scotland
voted overwhelmingly for remaining in the EU) to seek another referendum
for independence. Obama Admn.s anxiety with Brexit is largely due to the
fact that absence of Britain, a bridgehead of US influence in Europe, in EU
would mean less influence in shaping the policies of EU, particularly towards
Russia. Brexit vote saw a peculiar amalgam of workers anxiety and
bourgeois reaction, both targeted against what is viewed as Establishment.
Leadership of both Conservative and Labour parties had opposed Brexit.
While Cameron resigned as Premier, in the Labour Party a challenge was
mounted against Corbyn leadership. This challenge was defeated in the
leadership battle with even greater numbers favouring Corbyn. There has
been a sustained media campaign against anti-neoliberal policies being
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December, 2016
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advocated by Corbyn, painting him as unelectable. But the real anxiety of
the ruling bourgeoisie is that these anti-neoliberal positions may be
supported by a large section of the people thus threatening the present
policies.
US Elections: Trump's Victory

In the US presidential elections, the US electorate faced an unenviable
choice between white male supremacist Trump and the darling of corporate,
war mongerer Hillary Clinton. Though US economy is registering some
growth, growth is anemic; unemployment is down but the new jobs are low
paid and part time, there is increase in the number of temporary workers
with low wages and no security working alongside permanent workers on
the same work. Most US citizens are angry with policies favouring corporate
and against common people including middle classes. This anger, which
gave rise to Occupy Wall Street movement, was also reflected in the
strong campaign of Bernie Sanders for the Democratic Party nomination.
Though Trump capitalized on this anger, his prescriptions are outdated. He
advocated more tax cuts and punishing of those firms which take their
production of goods and services abroad, obfuscating that the US benefits
from such shifts. On the other hand, his foreign policy pronouncements
have caused alarm among the establishment figures of both Democratic
and Republican parties. However, his racist, anti-immigrant and misogynist
utterances and stance have alienated racial and religious minorities and
women. A significant feature of these elections has been that both the
candidates representing the two main parties were highly unpopular and
had high negative approval rating. It is a testimony to the role of money in
the US elections that the primary process threw up both those candidates
who are disliked by the majority of the people. Lack of enthusiasm witnessed
among African-Americans shows the limits of politics of symbolism. Election
of a President of African-American origin had in no way improved the
condition of this section, not even their treatment by law enforcement
agencies which target them and gun them down with impunity.
US elections saw the huge role of money power with 2.15 billion $ spent
in electioneering. US elections demonstrated how money selects the
candidates on behalf of the people. The whole system is heavily skewed in
favour of major parties which are representatives of the big bourgeoisie.
US elections also demonstrated how major parties are controlled by
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39

corporate. Democratic Party establishment in the interest of corporate
worked overtime to defeat the candidacy of Bernie Sanders, who was
projected to defeat Trump, as he was articulating opposition to neoliberal
policies. Democratic party chose to lose the presidency but not the favours
of the corporate. One should also bear in mind that disillusionment with the
ruling party after eight years of presidency had anyway made a Republican
victory probable in these elections.
Backed by the anti-establishment mood sweeping the developed
capitalist countries, white supremacist Donald Trump was elected President
of America. He defeated Hillary Clinton who was also backed by many
leaders of Republican party, business elite and military leaders. Trump
represents the right wing channelizing the anger of the people against the
status quo, of which the right wingers themselves have been the main
beneficiaries. It is a pre-emptive strike by the super-rich lest the anger is
directed into channels which challenge the policy paradigm of the big
bourgeoisie. Just like in Brexit, the right wing of bourgeoisie was able to
cash in on the anger of the workers and common people against the
establishment and its neoliberal policies.
Rising anger among industrial workers owing to rising unemployment
and generation of low paid and insecure new jobs, among the people against
their deteriorating conditions while there is further enrichment of corporate,
against bailing out of the super-rich and against growing inequalities has
bred resentment against the Establishment. Right wing of the bourgeoisie
has been painting immigrants as responsible for the lack of jobs and directing
this anger into chauvinist channels. These rightwingers, alt-rights, are
directing this anger against the exploited and oppressed serving the
exploiters and oppressors.
Trumps prescriptions for job generation i.e. tax cuts, against outsourcing
and against international trade would neither create nor bring back jobs.
Most of the imports in US are products of labour intensive industries which
can only generate low paid jobs. Tax cuts without expanding the economic
base will only worsen budget and fiscal deficit.
The Trump presidency would pose a real challenge to the racial and
religious minorities, attacks against them would intensify. African Americans
have faced discrimination and unemployment. Police has been targeting
them, killing and arresting them. They have been painted as drug peddlers
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NEW DEMOCRACY
and criminals. Obama presidency has not made any change in their abysmal
conditions. Lack of enthusiasm and low turnout among African Americans
for Hillary despite rigorous campaign by Barak and Michele Obama
demonstrates their disillusionment with the Establishment. Trumps steps
against Muslims and Hispanic immigrants would be very catastrophic for
the people from these communities.
Trump has articulated some different positions on foreign policy. He
has advocated dismantling of NATO, making allies pay for their defense,
good relations with Russia and support to Assad in Syria in fighting IS,
abandoning nation building and democracy projects. These policy
prescriptions have shocked US establishment and its close allies. Trump
has come to power at a time when contradictions among imperialist powers
are rising. Trump has also advocated stronger action against China in trade
and against Iran on her nuclear weapons programme. Foreign policy
prescriptions of Trump entail disrupting the alliance between China, Russia
and Iran, lowering contradiction with Russia and intensifying attacks against
China and third world countries.
Election of Trump is a product of deepening crisis of US imperialism.
Its hegemonic drive is shackled by sputtering economy particularly since
explosion of financial-economic crisis in 2008. Escalating costs of its
military adventurist policies have further exacerbated this crisis which is
reflected in the worsening conditions of the majority of the people. Trump
is the response of the big capital to this deepening crisis to direct peoples
anger into chauvinist racist channels. It may also mean recalibrating its
hegemonic drive by making its allies pay more for military expenditure and
intensify drive against oppressed countries. The latter may mean some
temporary respite in its conflict with its principal military rival, Russia, but
this is going to be short-lived.
Ultra-right forces of the ruling bourgeoisie are strengthening in North
European countries and America. These forces are exploiting the workers
disaffection and insecurity though they stand for intensification of attacks
on workers. Workers organizations have long been dominated by liberal
wing of bourgeoisie and social democrats and their consciousness has
been corroded by the long spell of class collaboration during the period of
social contract. Further, the international division of labour under
imperialism and imperialist loot and plunder of third world countries has
been responsible for crumbs of this loot being thrown to workers. High
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paying jobs have been concentrated in developed capitalist countries and
labour aristocracy has been rallying the workers behind imperialist
bourgeoisie. Explosion of financial-economic crisis and the policies of
bailing out big capital at the expense of the people, adopted by the govts.
of these countries, have destroyed that world. Workers of these countries
need to go beyond just demanding the relatively better conditions of the
earlier decades which are being promised but cannot be delivered and move
to challenge the capitalist system itself.
International developments have increased instability around the world
and have led to eruption of wars in many parts. Contradictions among
imperialist countries are growing, threatening peace around the world. Danger
of world war, though not yet imminent, has grown. The situation is turning
favourable for the growth of workers movement in capitalist countries and
liberation wars in oppressed countries though not all such struggles are in
a position to utilize these growing contradictions.
A significant event for the communist movement has been a peace
deal between Govt. of Columbia and FARC after nearly five decade old
revolutionary war in the country. The deal envisaged disbanding the FARC
military units and social and economic reforms including land reforms. The
deal has been narrowly rejected in the referendum due to opposition of the
elite sections supported by US imperialism. However, Govt. of Columbia
is going ahead with negotiations with ELN, another communist organization
waging revolutionary war in that country for decades. The deal will come
through with some amendments.
Govt. of Duterte in Philippines has signed a Memorandum with National
Democratic Front of Philippines (in which Communist Party of Philippines
plays a leading role). The earlier govts. too had initialed such drafts but
had backtracked on the agreement. The coming time will show whether
Duterte Govt. is any different in this regard from its predecessors.
Once more so-called European socialists have displayed their true
colours as representatives of the ruling classes. Socialist Party of Spain
has supported the installation of right wing PP Govt. to implement austerity
policies which have been repeatedly rejected by a majority of the people of
Spain. While workers continue their struggle to defend their jobs and rights,
social democrats and revisionists are betraying the workers and siding
with the neo-liberal regimes. Objectively there is increased scope for the
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communist revolutionaries to increase their base among workers.
Another significant development has been role of the PKK linked Kurd
forces in Syria who increased their strength and the areas under their control.
PKK is gaining support among Kurds in Iraq and Turkey as well where
Erdogan Govt. is crushing Kurds and forces sympathetic to them. Continuing
and expanding wars in West Asia have given opportunity to Kurds to register
some advance to realize their national aspirations though the road ahead
is tortuous and imperialist powers are seeking to utilize them but have no
sympathy for their national aspirations.
In our neighbourhood, Indian Govt. has successfully manipulated the
infighting between major parties in Nepal to install Prachand led Nepali
Congress-UCPN(M) Govt. Indian Govt. utilized the agitation of Madhesis
against the Constitution promulgated in September last year. Indian Govt.
had blockaded Nepal for months which led to a sharp scarcity of essential
supplies. This had created public opinion against the Modi Govt. However,
Indian Govt. mobilized all pro-Indian forces, Nepali Congress and Madhesi
parties and elements within UCPN(M), to install Prachand in power.
Replacement of Oli Govt. was claimed to be due to his Govt. taking antiIndia posture. However, the claimed reason for the change of the Govt. i.e.
to resolve Madhesis demands related to the Constitution, has not made
any progress. The ruling dispensation does not have the requisite two third
majority to make any amendment to the Constitution and hence it will be
difficult for it to resolve the stand-off with Madhesi parties. Even their own
commitment towards meeting the demands of Madhesis is very doubtful
though they used it to come to power. However, this change of Govt. has
demonstrated the hold India has over different parties in Nepal and also
the power-hungry nature of UCPN(M).
National Situation
Period since the last CC meeting has seen many important
developments in the national scene. It has been marked by growing impunity
of security forces and an attempt to project a nationalist discourse taking
Army and other security forces as its symbol, increasing tie-up with US
and Israel and hostility to Pakistan and China, increasing facilities to
corporate and increasing burdens including taxes and attacks on the people,
increasing communal polarization and attacks on Muslims, Dalits and
tribals, further increasing repression on the people by police and security
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43

forces and denial of democratic rights of the people, increasing jingoism
being spread through media and increasing suppression of diversity of Indian
cultural ethos, increasing fascicization of state and increasing offensive
against revolutionary communist forces on the one hand. On the other,
rising struggles of workers and peasants, of dalits and tribals, with even
middle and poor peasant masses of landowning communities coming out
in agitations, rising awareness against danger posed by Hindutva forces
and sharp upsurge of people in Kashmir, characterize the period under
review.
Slowing Economic growth and increasing tax burden on the People

Despite corporate friendly policies of the Govt. and change in the method
of calculation of GDP, even nominal growth is slowing though the growth
had had no relation with the condition of the people or the unemployment
rampant in the country. Employment in the organized sector is coming
down while growth in the construction industry, which had contributed
maximally to the growth over the past years, is also slowing down. Indian
Govt. is adopting every means to attract foreign capital and is diluting
forest laws and environmental regulations in favour of the corporate. But
Modis Make in India, an invitation to foreign capital to exploit natural
resources and cheap labour of Indian people, has been a non-starter. The
basic question is lack of demand, with markets in Europe and America not
picking up and no efforts have been made to spur up domestic demand i.e.
increasing purchasing power of the people.
In this scenario, to increase the revenue collections and to reduce the
taxes on imports further, ruling classes in the country have adopted Goods
and Services Tax (GST). In the name of making the tax structure uniform
it is designed to increase the tax burden on the people (indirect taxes) and
it seriously dents the rights of the state govts. for raising the revenue. It is
a serious attack on the rights of the states and whatever federal structure
exists under the Constitution. Consensus among ruling class parties on
this issue is reflected in almost all the parties (barring AIADMK) supporting
a Constitutional amendment to enact GST. Once Congress fielded
Chidambaram as the spokesperson on this issue, it was clear that a deal
has been struck by the Congress with the ruling BJP on this issue. Congress
gave up its demands to put a ceiling of 18% on the GST and making changes
in GST rate subject to parliamentary approval. Govt. has exempted
petroleum products, tobacco and alcohol from the tax slabs. GST rates
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are going to be fixed higher though the Govt. is talking of a revenue neutral
rate (RNR). As is the experience in most of the countries, introduction of
GST will lead to price rise, particularly of the essential commodities. Govt.
is talking of low tax rates on goods of common use which was the case
earlier as well while tax rates on many parts of the food chain (for example
transport) will be high. GST is a measure in the interest of big capital,
particularly foreign capital, whose goods and services will now be taxed at
the same rate as domestic products.
Indian banks are facing a serious situation as their NPAs mount. Over
6 lakh crore rupees of NPAs are on the sheets of scheduled banks. What
to talk of recovering this money, Govt. is not even disclosing the names of
the defaulters which are big industrial houses. This rising amount is taking
a heavy toll as lending by banks is falling. Govt. had waived nearly 45
thousand crores rupees in such bad debts in 2015 alone to benefit these
sharks but the situation continues to be alarming.
Govt. has intensified its drive to clear the forests of tribals. Compulsory
Afforestation Bill passed by the parliament has done away with the role of
gram sabhas as envisaged in the FRA 2006. This Act will lead to forcibly
throwing out tribals and other forest dwellers from the forests. Attack by
Telengana govt. against the tribals is aimed at clearing these areas for
ultimately handing over the areas to corporate for loot and plunder. Telangana
govt. has unleashed serious repression on tribals and on our leaders and
cadres who are leading the resistance to this drive of the Govt. State Govts.
in other states too are intensifying attacks against tribals to drive them
from their land in the forest areas.
Upsurge in Kashmir
Since July 8th 2016 when Hizbul-Mujahideens Burhan Wani was killed
by security forces, Kashmir has erupted in sharp struggle. The struggle is
spread all over Kashmir with struggle in South Kashmir being particularly
sharp which had not been the case during earlier protests. Emergence of
rural areas as centres of protest has given it more ability to last. The struggle
is so widespread that the whole intelligence network of the Indian state has
collapsed resulting in repeated attacks on police stations and even Army
camps like in Uri and Baramulla. Eruption in South Kashmir should be
seen in the background of attempts by RSS-BJP Govt. to set up pundits
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colonies and colonies for servicemen in this part of Kashmir. This is an
attempt to change the demographic profile of this region of Kashmir which
can also provide a land link between Jammu and Ladakh regions of J&K.
One should remember how the demography of Jammu region was changed
in 1947 with large scale massacres of Muslims and even larger eviction of
them from their homes, with settling of refugees from Pakistan part of
Punjab also playing a role. More than 100 days of continuous curfew has
been imposed in Kashmir and peoples lives have suffered immensely.
Govt. has responded with brute repression, sending more Army and
paramilitary forces to Kashmir. Over a hundred have been killed by security
forces and over a thousand have been blinded by the pellets used by the
Army. People of Kashmir stand totally alienated and would like nothing
less than recognition of their right of self-determination.
While RSS-BJP would like the present situation to continue as that
would give them the pretext to increase repression in Kashmir and elsewhere
as well as help in their design of deepening communal division in the country,
other parties of the ruling classes too have nothing to offer to the people of
Kashmir beyond bland platitudes. Leaders of CPM and CPI disgraced
themselves by becoming part of Rajnath Singh led all Party delegation
which was boycotted by all sections of Kashmiri people. BJP Govt. is in
denial, blaming Pakistan alone for the deterioration of the conditions in
Kashmir and other ruling class parties too mouth anti-Pakistan slogans
aggressively. Even the attack on the Army camp at Uri was blamed on
Pakistan. The said surgical strikes were carried out by Indian Army at the
behest of Indian Govt. to sidetrack the peoples struggle in Kashmir and to
thwart the rising sympathy in the rest of India with the struggle of Kashmiri
people. Modi Govt. has tried to isolate Pakistan on the issue of terrorism
but such attempts did not succeed at the recent BRICS summit in Goa as
shown by the communiqu issued at the end of the Summit.
We should demand end to repression on the people in Kashmir. We
should also demand that Indian Govt. should hold meaningful dialogue with
APHC as well as Pakistan to solve the Kashmir problem. We should support
the right of self-determination to the people of Kashmir. We should organize
conventions/meetings with all forces possible on these issues in different
states. We should also highlight how RSS-BJP Govt. is trying to increase
economic burdens on the people and restrict democratic rights in the name
of situation in J&K.
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Warmongering by Modi Govt.: Suppression of Dissent

Modi Govt. has sought to project the so-called surgical strikes on
September 29th morning to build war hysteria against Pakistan. While
reasons for such a propaganda were largely domestic, for overshadowing
the mass upsurge in Kashmir and struggles in different parts of the country,
there is an international dimension too with Modi Govt. openly aligning
itself with US imperialism. Modi Govt. has recently signed LEMOA enabling
US to use Indian military facilities including ports for military purposes.
Modi Govt. has also strengthened relations with Israeli Govt. which has
become a large supplier of military equipment to India. India has been
increasing its military activities in Afghanistan where US and Afghan Govt.
forces are facing increasing attacks from Taliban. India has been supporting
forces in Balochistan which are fighting against Pakistan Govt.'s repression
there. This support has increased after China Pakistan Economic Corridor
agreement. This corridor runs through Balochistan.
Modi Govt.s warmongering directed against Pakistan is being used to
deepen communal divide in the country. In the RSS playbook, Muslims are
equated with Pakistan. Unleashing war hysteria is thus targeted against
Muslims and also democratic sections, trying to portray them as antinational. This fascistic trend has been growing with big support from
corporate controlled media, particularly electronic media.
Modi Govt.s warmongering must be opposed. All democratic forces
opposing warmongering and communal polarization should unitedly oppose
warmongering, whose purpose is to prepare the ground for fascist
dictatorship.
In moves to browbeat other sections of the Indian state, Modi Govt.
has been conducting a running battle with higher judiciary, particularly
Supreme Court. It has withheld appointments to the higher judiciary cleared
by the Supreme Court collegium. Even tears shed by the Chief Justice of
India have had no effect on RSS-BJP dispensation.
Modi Govt. is also attacking those sections of media which are not
falling in line. Recent ban on the telecast of NDTV India for 9th November is
an example of punishing such sections of media. The overt reason is the
coverage by the channel of the Pathankot attack in which this channel is
alleged to have disclosed secret information. This excuse is very thin. The
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real reason is to warn media that they should not question the narrative of
nationalism being paraded by the RSS-BJP Govt. This attack has very
dangerous portent and it should be seen for what it is. Though the ban has
been deferred due to widespread opposition, the intent of Modi led RSSBJP Govt. is quite clear.
Govts suppression of dissent in institutions of higher learning is
continuing. Enactment of the play Draupadi written by Mahashweta Devi
was stopped in Haryana Central University and proceedings have been
initiated against teachers and students involved in staging the play. It was
the RSS student wing, ABVP, which forced the University Administration
to take this drastic step, though it had earlier approved staging of the play,
ostensibly for the reason that police has been negatively portrayed and
hence, this amounted to an act of sedition. Similarly action was initiated in
Ashoka University in Haryana against a large number of teachers and
students who had signed a letter supporting democratic rights of the people
of Kashmir. These acts, under the pressure of the BJP Govt. of the state
demonstrate a sinister trend of suppressing dissent in the academic
institutions. It is noteworthy that no action was taken against ABVP
hoodlums who had disrupted the play.
Attacks on Dalits and Una Mobilization

We have analyzed earlier how RSS-BJP vigilante groups are carrying
out attacks against Muslims in the name of cow protection. Gorakshak
Dals have been set up in different parts of the country and are being openly
patronized by the Govt. in BJP ruled states. Such groups are widespread
in Haryana, Gujarat, Rajasthan, MP and some other states where BJP has
strong base like in UP. These vigilante groups are openly attacking and
extorting money in the name of cow protection. These groups are also
targeting Dalits, particularly those castes which work on the hide for the
leather industry. One such attack by a RSS vigilante group near Una in
Gujarat led to a state wide movement of Dalits supported by almost all the
progressive forces. A video showing RSSs cow vigilante group thrashing
Dalit youths led to anger among Dalits in Gujarat who held a big meeting in
Ahmedabad. The organizers of the meeting called for a fortnight long yatra
from Ahmedabad to Una culminating in a mass meeting there on September
15th. Our activists from Telengana, UP and AP also participated in this
programme on the last three days.
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Dalit organizations in Gujarat have raised the important issue of land to
Dalits. They have demanded that the lands meant for Dalits be distributed
among them and have called upon Dalits to shun disposal of dead cattle. A
movement of Dalits under the banner of Zamin Prapti Sangharsh Committee
(ZPSC) for their share of Panchayat land is going on in Sangrur district of
Punjab facing police repression and landlord attacks. ZPSC has forged a
joint action with peasant and labourers organizations to oppose this
repression. Raising of the issue of land by Dalits has a vast potential of
drawing Dalit masses into revolutionary movement.
With Una protests, RSS-BJP went on the defensive on the issue of
Gorakshak Dals, though still they are defending these vigilante groups.
These vigilante groups and the support extended to them through police
and security forces is to prepare storm troopers throughout the country
which are bound to be used not only against minorities but also all struggling
people. Protests against Una incident have exposed the anti-Dalit character
of RSS-BJP (which will be used by forces like BSP for electoral purposes).
It has also strengthened forces in the Dalit movement which are taking
positions against the policies of the ruling classes like land issue, neoliberal
policies and anti-communal issues. This process is a good development
for mobilizing these sections for NDR. We should increase our engagement
with such forces.
Modi Govt. intensifies communal onslaught

To advance towards its goal of Hindu Rashtra, to sideline the important
issues of the people and disrupt their unity in the struggle on peoples
issues, and particularly in view of coming assembly elections especially in
the most populous province of UP, RSS-BJP Govt. has intensified its efforts
at communal polarization between Hindus and Muslims. Besides cow
vigilantism, it is giving every issue a communal twist, engineering attacks
against Muslims on every pretext and defending those accused of killings
and violence against Muslims as nationalists and patriots. In this it is utilizing
deep communalization of police and administrative machinery. Recently,
in Peda village in district Bijnor (UP) BJP engineered attacks on Muslims
by Jat landlords when some Muslims protested against eve-teasing of
Muslim girls by lumpen elements of that community. Three Muslims were
killed and several injured. Of note was the role of an SI, a constable and an
SP in support of the attackers. BJP defended these attackers and tried to
create a situation similar to Muzaffarnagar in build up to the state assembly
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elections.
Communal violence directed against Muslims has been particularly
widespread in states ruled by RSS-BJP or where they have sizable strength.
In Madhya Pradesh, houses of Muslims have been burnt, their properties
looted, with police conniving in these attacks. On October 12th, in two
villages of Dhar district RSS attacked Muslim villagers forcing them to flee
from their homes. Where-ever police did not help RSS elements they were
punished. Police officers have been suspended and transferred in Petlawad
in Jahbua district where police had arrested some persons belonging to
RSS for communal flare-up on the night of Muharram. An important case is
of Balaghat district where the police case against a RSS pracharak led to
cases of attempt to murder, robbery and rioting against nine policemen
who are now absconding to avoid arrest. Earlier, an IPS officer was
transferred when police acted against Bajrang Dal hooligans at Dhar. SP of
Raisen was transferred as RSS was irritated over his zeal to control a
communal flare-up. Madhya Pradesh is an example of how the RSS is
controlling the whole police and administrative machinery. Police personnel
who are not conforming to RSS code are being punished or shunted out.
There is alarming trend of imposing RSS vision on the people of India.
This is not simple majoritarianism but imposing a minoritys view on the
people with the help of the state machinery. Mahisasur celebrations are
banned and its activists suppressed. Recently RSS challenged Mahabali
tradition of Onam in Kerala to propagate Vamanavtar of Vishnu. After some
time this too would become part of nationalism. Anti-sedition law is being
liberally used for those opposing Modi Govt. and RSS. These acts are
being shown to be anti-national. Where this is not possible, they are branded
as offending religious sensibilities of the people and sowing communal
discord. RSS version of Hindutva is being imposed on the people of India,
majority and minority both.
Triple Talaq
The issue of triple talaq has been much discussed in India with ruling
RSS-BJP dispensation opposing it in the name of the right of Muslim
women. These hypocrites who do not mind butchering Muslim women in
communal violence, who oppose rights of even Hindu women what to talk
of Muslim women, are pretending to be defenders with Modi calling Muslim
women as sisters. Who does not remember the treatment meted out to
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Muslim women killings, mutilation and rapes - by this butcher of Gujarat?
The reaction of Muslims to this sudden outpouring of sympathy for Muslim
women from RSS-BJP has been echoed in a statement of Muslim
intellectuals that Muslims had no faith in the sudden found love for women
and gender justice being expressed by members of the ruling party. It
should be noted that the biggest impediment to progressive mobilization
among Muslims including Muslim women, is the attacks on the lives and
property of Muslims which pushes them into ghettoization and leads to
further strengthening of patriarchal bonds. One should not forget how
Muslims women were killed and raped during Muzaffarnagar violence, a
violence which is still glorified by Modi and RSS-BJP. The talk of Muslim
womens rights is a brazen lie on their lips.
While triple talaq is definitely anti-woman and should be scrapped, a
movement to that effect must be built by Muslim women and progressive
sections of Muslim society. Without that even if the Court outlaws it, it will
push the vast majority of Muslim women away from approaching courts. In
this respect we should keep in mind that Muslim Family Law Ordinance
(1961) of Pakistan provides for an arbitration council to attempt reconciliation
and a 90 day period for retraction. There is urgent need for granting equality
to women in dissolution of marriage and the same rule should apply to
women as well (Khula). There has been total stagnation in Muslim personal
law from the British period particularly after 1857, which has been
characterized by Iqbal, The result is that while the people are moving, the
law remains stationery. British tried to enlist the support of both Muslim
and Hindu reactionary sections in the interest of keeping their colonial rule
intact.
It is worthwhile to recapitulate some points from history on this issue.
During the course of the anti-colonial movement, Congress had repeatedly
promised before 1947 that it had no intention of tampering with Muslim
personal law, but in the immediate aftermath of partition, Congress enshrined
Uniform Civil Code throughout the territory of India among the Directive
Principles of the Constitution (Article 44). The emphasis is on uniformity,
the progressivism is altogether missing. This was a clear going back on
Congresss earlier position on the issue. Further Directive Principles are
not enforceable by any Court and this is explicitly barred by the Constitution.
Yet in the last few decades, with the strengthening of Hindu communal
forces, Indias Supreme Court has sought to enforce this provision,
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repeatedly asking the Govt. why the uniform civil code has not been enacted.
Impunity of State Machinery

As a part of the fascist drive of Modi led RSS-BJP Govt., there is
increasing impunity of the state machinery in suppressing peoples
struggles, in launching attacks against Muslims and against communist
revolutionary forces. The areas which have been under AFSPA have been
experiencing impunity by the Armed forces which is protected by the said
Act. Now even in other areas, there is an increase in the impunity of police
action against the people. Even otherwise there is very weak respect for
the democratic rights of the labouring people. Now this has increased many
fold. Police has blatantly launched false cases against activists of ZPSC
fighting for Dalit share of land in Punjab. On the other hand, police has
been conniving in landlords attacks against Dalits, watching these attacks
as spectators and arresting Dalits for resisting them. Similarly in Gujarat,
Dalit activists have been repeatedly detained for highlighting their issues
and no action is taken by the police in attacks by upper caste lumpens
against Dalits. IPC and CrPC imposed by British colonialists on India give
vast powers to the police and Indian rulers have not only continued the
same but have used these powers against the people. Anti-sedition law,
provisions of IPC (Secs. 144 to 149), arbitrary banning of protests and
peoples assembly, IPC provisions against obstructing Govt. officials, etc.
are routinely used against peoples movements. Even then sections of
ruling classes term India as a soft state which shows that they would like
to take away even the existing democratic rights from the people. While
intensifying repression on peoples struggles generally, RSS-BJP Govt. is
targeting communist revolutionaries, nationality movements and Muslims
in particular.
Malkangiri Encounter
As a part of Operation Greenhunt, to clear the forests of Central India,
Greyhounds from AP and Special Police Force from Odisha conducted a
covert operation and killed nearly 40 leaders and activists of CPI (Maoist)
on October 24, 2016. Many bodies given by the security forces were found
mutilated which showed torture prior to the killing. Govt. has implemented
a policy of physical elimination of the communist revolutionaries, taking no
prisoners. Considering Govt. claim of surprising the CPI(Maoist), it is not
possible that no persons were injured or arrested. This encounter once
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again demonstrated utter disregard of democratic norms or even laws of
war by the Govt. of India in suppressing communist revolutionaries. It is
also part of the drive of the Central and State Govts. to clear the forests
with their rich mineral resources, of the tribals and to physically eliminate
the communist revolutionaries leading them. A powerful voice should be
raised against Malkangiri encounter and Govt. policies against tribals should
be exposed.
Bhopal Killings
Eight Muslim youth allegedly belonging to SIMI who were prisoners in
the high security Bhopal prison were taken out of jail and killed in cold
blood. The Govt. story of these eight persons having run away from jail
and being killed in an encounter has been proved to be false. Firstly, these
eight persons were all unarmed. Even state Home Minister admitted that
they had only cutlery items with them. Video evidence surfaced to show
that all of them were killed in cold blood. Audio evidence of instructions to
kill all the eight persons and later congratulations for having done that has
surfaced. Even the local people said they had heard no gun shots from the
killed. MP Govt. has been forced to order a judicial enquiry by a retired
High Court Judge and to withhold the awards announced for the policemen
involved in these killings. It is important that these eight were under-trial
prisoners and three of them were going to be released soon as the Court
had observed that there was no evidence against them.
As soon as the news of these killings spread, MP CM castigated those
doubting the police narrative as anti-national. Another Minister said that
these youth should have been killed rather than tried. State ATS Chief
questioned the need of firearms with them for them to be killed by police.
There is an attempt to build up a hysteria questioning the need to follow
the law of the land in cases where police accuses any person of terrorism.
Media, particularly electronic media, has contributed to building this hysteria.
It has serious implications for the democratic rights of the people. A powerful
campaign should be built for demanding punishment to the police personnel
involved in killing these eight under-trials. All including the higher officials
and politicians involved in this conspiracy should be brought to book.
Criminal Case Against Academicians

In suppressing communist revolutionaries and even democrats, govts.
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do not bother about the law of the land. Chhattisgarh Govt. has recently
taken this to a new low registering a case involving murder against
academics Prof. Nandini Sunder of Delhi University, Prof. Archana Prasad
of JNU along with some others who had investigated rights' abuses in Bastar
region of Chhattisgarh. This team had visited these areas in May, 2016.
The team was accused of supporting Maoists and BJPs state Home Minister
had termed members of the team anti-national. These academicians had
investigated the violence unleashed by the police and vigilante group
supported by them on the tribal people.
The team members have been framed for their alleged role in the murder
of Shyamnath Baghel of Nama village though family members of the
deceased have denied naming team members. This is a crude attempt to
harass and intimidate anyone who questions the police narrative and brings
into public domain the atrocities and violence unleashed by the security
forces on poor tribals in the name of combating Naxalites. Police in
Chhattisgarh has become a law unto itself and Govt. has been openly
supporting and encouraging police atrocities against the people. Any such
attempt at exposure is sought to be silenced by the heavy arm of the
state, registering fake cases being part of this strategy. In the present
case it is evident that the case against Prof. Nandini Sunder and others is
also a vendetta against filing of a case in the Supreme Court against the
atrocities committed by Salwa Judum, a vigilante group patronized and
protected by the Govt. Supreme Court had held Salwa Judum to be an
unlawful organization and likened the rule in Chhatisgarh to that described
in the Heart of Darkness.
Registering of a murder case against academics is a big attack on the
democratic rights of the people which must be resisted with full force. This
case must be withdrawn forthwith and action should be taken against the
police officers responsible for framing this case.
Mobilization of Marathas
Huge silent marches are being taken out in different parts of Maharashtra
by Marathas demanding action against the accused in a rape-murder of a
Maratha girl, abrogation of SC ST (Prevention of Atrocities) Act and
reservation for Marathas. Marathas are a dominant, landowning caste in
Maratha constituting nearly 32 percent of the population of the state and
having significant share in different fields.
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This agitation by Marathas, coming after similar agitations by Patidars
in Gujarat, Jats in Haryana and Kapus in Andhra Pradesh, points to growing
agrarian distress which is affecting even the landowning peasantry. Most
of the peasant suicides in Maharashtra are by Marathas. There is growing
unemployment among the Maratha youth, especially educated youth. Fees
of the private professional institutes are very high and no jobs are available
even after completing education. These agitations are born from the abyss
in which agriculture finds itself, particularly in this period of neoliberal
policies.
While this agitation has its roots in the growing agrarian distress, the
elite belonging to ruling class parties are diverting this anger into chauvinist
channels targeting the oppressed castes- Dalits who are portrayed as
beneficiaries of reservations and who are protected by Prevention of
Atrocities Act. Ruling class politicians are channelizing this anger against
ruling BJP which has a non-Maratha CM. NCP in particular is supporting
this movement. Leaders of different ruling class parties are participating in
these silent marches formally led by non-political elements.
However, for this agitation to have any meaning for the overwhelming
majority of Marathas, it should target the anti-peasant and anti-agriculture
policies of the Central and State Govts. Agitating people must demand
end to high fees and creation of jobs and forge unity with other sections
aggrieved by the policies of the ruling classes. For this, the agitators must
shake off the leadership belonging to ruling class parties and come out of
the chauvinist channels into which such elements are driving them.
September 2nd Strike

Workers in India observed one day strike demanding Rs. 18000 per
month minimum wage, implementation of labour laws and against antiworker changes in labour laws. The strike evoked very good response.
Participation was larger than the similar one day strike a year earlier. Our
TU centre also tried to play an active role and TUs in which our comrades
are working were generally in the movement. However, the offensive of the
ruling classes is much bigger and demands sustained, militant and broad
based struggle. Token struggles like annual one day strike will not be able
to stop the attacks against the workers by the ruling classes. Our TU Centre
should try to play a more active role in this resistance of the workers and
should take imaginative steps to increase our reach among the workers
December,, 2016
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and our ability to draw workers into struggle.
Demonetization
In order to cover up its failure to bring back black money from Swiss
banks as Modi led BJP had promised before 2014 Lok Sabha elections,
Modi Govt. has resorted to the dramatic measure of invalidating notes of
denomination of Rs. 500 and 1000. This is a very serious attack of the
Modi Govt. against the common people. This step, taken without proper
preparations, has created a lot of hardships for daily wage workers, hawkers,
vendors, small shopkeepers, peasants and common people in general.
This step of the Modi Govt. displays its total disregard for the concerns
of the common masses. Rs. 500 has become a very ordinary currency
given the rise in prices of all commodities. Even the daily earning of wage
labour is near that amount. Modi Govt. must be well aware that these
currency notes are used routinely by the common people. This step of the
Modi Govt. has come in handy for the black dealers of currency who are
doing brisk business. So many people have been stranded during their
journeys and millions are queued up before banks and ATMs. The step has
rendered people moneyless, harming treatment in hospitals, even
procurement of eatables, daily necessities, etc. People are standing in
long queues and returning without money. Agricultural operations and small
industries have been stalled in many parts. Many deaths have also been
reported. Such is the insensitivity of the Modi Govt. that it has not bothered
about agricultural operations though this is the sowing season. Sale of
Kharif crop and sowing of Rabi crop is being adversely affected. Only online
transactions are unaffected, a mode used by a miniscule minority of the
people.
Modi Govt. with the aid of sympathetic media has tried to divert attention
from the fact that the issue of black money relates to huge hoards of money
stacked abroad. There have been reports of staggering amounts of such
money. Just like its predecessor Govt., Modi Govt. too has not disclosed
even the names of such black money holders, what to talk of recovering
that money. This black money belongs to ruling politicians and bureaucrats
who have taken huge sums as bribes and to the big capitalists who have
dodged the payment of taxes. Obviously, many of these black money
holders have been enthusiastic supporters of Modi led BJP and continue
to be so. There are reports that these sharks had been forwarned by the
56
December, 2016
NEW DEMOCRACY
Modi Govt. Even otherwise, it is reported that only roughly 5-6% of the
black money is in the form of currency.
While Modi Govt. is terming this step as targeted against black money
and even fake currency which according to the RSS-BJP propaganda mill
is thrown by Pakistan and used by terrorists, the real reason behind this
move is more sinister. For several years, the NPAs have assumed alarming
proportions with 40 scheduled banks accounting for nearly 5 lakh crores.
Central Govts. have also been talking about this burden on the banking
system. These huge NPAs have compromised banks lending capacity
which is of concern to the big capitalists who are enthusiastic supporters
of Modi and RSS-BJP Govt. Demonetizing Rs. 500 and Rs.1000 notes
may result in some notes becoming invalid which will wipe out that much
liability of the Reserve Bank.
Another target of this move is to increase the income tax net. Over last
decades, successive Govts. have bemoaned the very restricted tax net,
particularly informal sector, shopkeepers, small entrepreneurs and land
owning rich peasants not being brought under income tax. Hence, this is a
move to bring these money holders under the tax net.
People are angry at this move even as RSS-BJP Govt. is trying to
paint this too in nationalist colours. We should expose the real motive
behind this move and its inefficacy against black money. We should oppose
this move targeted against common people and demand cancellation of
this demonetization. Modi Govt. is a friend of big black money holders and
will never bring them to account. Its pretensions should be exposed and
intentions opposed.
November 12, 2016
Homage to Fidel Castro, Leader of

the Cuban Revolution & Fighter
against US Imperialism
Fidel Castro who had led the overthrow of US backed Batista dictatorship
in Cuba and had also led Cuba in the direction of socialism after this, died
on November 25, 2016 aged 90 years.
Son of a wealthy plantation owner, Fidel was active in the democratic
movement since his student days. In 1945 there was a widespread
movement in Cuba against US intervention in the Caribbean in which Fidel
also participated. As a student activist, during 1947-48 while pursuing his
law degree, he was attracted towards Marxism. He joined the Party of
Cuban People led by Chibas. From 1950 to 52 he practiced law. However,
with the help of CIA, Batista seized power and annulled 1952 elections.
After the end of Second World War, US Administration was alarmed at
the victorious advance of the Communist movement worldwide and had
taken to supporting all the reactionaries and dictators in its anti-communist
strategy. US rulers any way considered Latin America its backyard and an
exclusive zone for exploitation. Towards the end of Cuban war of
independence from Spain, US had militarily intervened in 1898 and made
Cuba its virtual colony as it had done in Philippines and Puerto Rico. Jose
Marti who had become a symbol of Cuban independence struggle, had
died at the beginning of this third and final war of independence from Spanish
colonialism.
After Batista seized power, Fidel took legal recourse to get this seizure
of power declared illegal but was not successful. Having failed in this,
Fidel and his colleagues formed an organization named the Movement. On
July 26, 1953, 123 of them attacked the Moncada barracks in Santiago
and barracks in Bayano to stir a nationwide revolt. This attack was defeated.
9 of the fighters were killed in the fighting and 56 of them were executed by
Batista Govt. Fidel and others who had escaped to the forests, were
apprehended and put on trial. During the trial, Fidel made an impassioned
plea in the Court on October 16, 1953, History will absolve me ... which
December,, 2016
57
58
December, 2016
NEW DEMOCRACY
made him popular in Cuba and took his message to the people. He was
sentenced to a 15 years prison term. However, he and 54 other fighters
were later released due to public pressure for the release of political
prisoners.
party undertook agrarian reforms, passed agrarian reform law in May 1959
putting a ceiling on the holdings of agricultural land. They nationalized
plantations and confiscated properties of all foreign companies which were
mostly US companies.
After this attempt which had militarily failed but made him popular and
his message reverberate through Cuba, Fidel and his colleagues renamed
their organization 26th July Movement and went to Mexico. There they
assembled a fighting force and got help from Alberto Bravo, a veteran of
the Spanish Civil War, for military training in guerilla warfare. In Mexico,
Fidel Castro also made close contact with Ernesto Che Guevara, a MarxistLeninist, and both agreed to work together for the Cuban revolution. On 26th
November 1956, Fidel, Che and 80 other fighters left Mexico on a yacht
and reached the Cuban coast on December 2nd. They planned to reach
Sierra Maestra, a mountainous forest region. They did reach there but they
were reduced to a mere 20. In Sierra Maestra, they established a base
area and accumulated strength. They increased their strength among
peasant masses and cane cutters, waged guerilla war and brought much of
this area under their control.
While many leaders of the May 26 th Movement were Marxist-Leninists,

the organization did not openly subscribe to it. In 1961, May 26th Movement
united with Peoples Socialist Party and Revolutionary Directorate to form
a single organization. In 1965, Communist Party of Cuba was formed under
the leadership of Fidel Castro. As Fidel himself said that though he was
Marxist, his political conduct was inspired by anti-colonial and prodemocratic ideas. This showed that he took the immediate aim of the Cuban
peoples revolution to be anti-imperialist and democratic.
At the time, Cuba was groaning under Batista dictatorship foisted by

US imperialism which was exploiting and plundering the resources of Cuba.
75% of the arable land was under foreign plantation owners, mostly from
US. The whole economy was under US control, dominated by US companies
and their compradors. Cuban elite was supporting US imperialism and Cuban
peasants, workers and patriots were feeling suffocated.
From Sierra Maestra, Cuban revolutionaries belonging to the 26 th July
Movement attacked forces of Batista and inflicted serious damage. Other
forces active against Batista regime included Peoples Party of Socialism
formed by communist elements and Revolutionary Directorate but 26th July
movement was the largest force fighting Batista regime. They militarily
defeated Batista regime and conquered power in January 1959. In the course
of this struggle, peasants acted as the main force of struggle and
mountainous forest regions acted as a base for revolutionary forces. From
these regions they attacked the cities, the main centres of political power.
From the beginning of their struggle, May 26th Movement took armed struggle
as the main form of struggle to overthrow the reactionary regime. They
enjoyed wide support among the Cuban people in this struggle against US
imperialism and its reactionary allies. After coming to power, Fidel and his
December,, 2016
59
However, lack of ideological firmness paved the way for some of the
stands taken by the Cuban party on the issues that faced the international
communist movement e.g. during ideological struggle against modern
revisionism and the direction of the course of socialist construction.
Cuban revolution shook US imperialism which had emerged as the leader
of imperialist world after Second World War and that too, in its backyard of
Latin America. US imperialism understood the potential of this revolution
to act as a catalyst of peoples struggles in this whole region. It went all
out to smash the Cuban revolution and even physically eliminate Fidel
Castro. Fidel Castro for decades remained steadfast in his opposition to
US imperialism and became a rallying point for the struggle against US
imperialism in Latin America. In 1960, Fidel Castro made the Second Havana
Declaration calling upon Latin Americans to rise in revolution. Communist
Party of China had praised this declaration. US imperialism imposed an
embargo against Cuba which has not been lifted till date. Kennedy
Administration launched Bay of Pigs invasion in April 1961 which was
defeated by Cuban Army and people.
In 1962, Soviet revisionist ruling clique of Khruschev forced Cuba to
install nuclear missiles in Cuba and when US Admn. threatened,
Khrushchev ruling clique went from adventurism to capitulation, withdrew
the missiles in exchange of removal of US missiles from Turkey. Cuban
leadership was not involved by Khrushchev in these negotiations with US
imperialism. Chinese Communist Party, criticizing this abject surrender by
Khrushchev clique, clarified that Kennedy Admn. wants to destroy socialist
60
December, 2016
NEW DEMOCRACY
construction in Cuba.
Koraput (Odisha)
Cuban Revolution was indeed a historic rising of Latin American people

against US imperialism and reactionaries aligned to it. It raised the red flag
in the belly of the beast. It was the first revolution in the period when East
wind prevailed over the West wind.
On his death, CPI(ML)-New Democracy pays homage to Fidel Castro,
the leader of Cuban revolution and a fighter against US imperialism and
hegemonism.
(Issued by the Central Committee of CPI(ML)-New Democracy

on November 27, 2016)
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December,, 2016
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61
Convention against Polavaram

A Convention against Polavaram was held on 24 th Nov 2016 at the
Conference Hall of the Tribal Museum in Odishas Koraput town. Over 170
delegates from different states affected by this mega project along with
leaders of different anti-displacement movements of Odisha attended the
convention. The convention unanimously demanded to stop pro-corporate
Polavaram project and urged the people to intensify the peoples struggle
against it.
Inaugurating the convention, eminent academician of Odisha Prof. Bijaya
Bahidar said that it is a historical event which has brought all the democratic,
progressive and struggling activists of different states on one platform to
protest against this so-called national project. He said both the AP and
Central Govt. are trying to complete this project at the earliest possible
only to serve the interest of different industrial houses based on the coastal
corridor by pushing lakhs of people mainly tribals into displacement. In
their desperation to carry
out this anti-people project
at any cost they even
violated the PESA Act
and Forest Right Act,
2006. Though hundreds of
villages of Odisha and
Chhattisgarh are going to
be submerged by this project but no Gramsabhas were conducted prior to
its construction and in AP also Gramsabha was done only on paper.
In the post-1947 India, large scale displacement has taken place due to
the construction of large dams, industries and mines. These people mainly
tribals and dalits were forced to sacrifice in the name of national
development. This process has accelerated since last decades after the
globalization policies adopted by ruling classes. To help the corporate
houses and to ensure minimum input and maximum benefits for them
respective Govts. both in centre and states have handed over large tracts
of agricultural land, water, electricity and raw materials like different minerals
at the cheapest rate. Though the Govts have been doing this in the name
62
December, 2016
NEW DEMOCRACY
of development but in reality these projects are meant to serve the corporate
loot and plunder of our resources. In Polavaram also though the Govt has
been propagating that the project is meant to provide water for irrigation
and drinking water but actually it is designed to cater to the rising need of
water for the industries set up in the Vizag Chennai costal corridor.
The history of displacement in India is a very pathetic one. Development
became a curse for crores of common people in India majority of whom are
tribals. Crores of people have lost their resources like land, forest, water,
minerals and their entire existing livelihood. Their socio-economic and
cultural habitat has vanished due to displacement. They were deprived of
their old life without getting a better one. These displaced people were
never welcomed at the new places they are allotted, they are treated as
refugees. The middle persons took away a big share of whatever
compensation they are paid. At the end nothing remained for the poor and
displaced people and their future generations. Use of force has been a
normal practice for this so called democratic state to safe guard the interest
of the capitalists. Explaining the mindset of a person to be displaced he
quoted an example. During the Kashipur movement against bauxite mining,
a tribal lady told him, Here my ancestors lived and my future generation
will also live. We get our livelihood from the land, forest and hills. Would
the Govt ensure a bright future for me and my future generations before
uprooting us for the sake of company?' So in all places people on their own
never agreed for displacement and will never agree to leave their land.
He hoped this historic convention would play a very important role in
uniting all the forces who are opposing this disaster in the name of
Polavaram. He called upon the participants of the convention to build an
active and united movement to pressurize the Govt. to abandon this project
immediately. Of course the real pro people development we aspire for can
be achieved only when workers and peasants come to the power.
The chief speaker of the programme and AIKMS national president Com.
V. Venkataramaiah said that Polavaram project was started by the former
CM of AP, YSR in the year 2004. If this project on Godavari will be
constructed lakhs of people of whom 60% tribals will be displaced. It is not
the common people but mainly ruling party politicians, contractors and
corporate houses will be the biggest beneficiaries of this project. The Govt
is carrying out false propaganda in the name of Polavaram. As claimed by
December,, 2016
63

the Govt. this project is not necessary as 72% of land proposed to irrigate
by Polavaram is already irrigated by different projects in the last three
decades. Even all most all retired engineers of the irrigation department
have adverse opinion about this project. Though the Govt of Odisha and
Chhattisgarh have filed cases in the Supreme Court, the judiciary too is
delaying the process. Neither they gave a stay order nor are they finalizing
the case. The role of media in this struggle is also biased. Hence this
convention is a good beginning to carry forward the struggle of displaced
people to restore their right over land, forest and livelihood.
President of Lok Shakti Abhijan, Prafulla Samantara in his speech
congratulated the move to organize this programme and stressed the need
for a united struggle of all the forces involved in this issue. Another guest
of the programme and retired Chief Engineer (Irrigation) Mr. Nrusinhananda
Panigrahi said that poor people particularly the tribals of undivided Koraput
district have been the victims of many projects. From Balimela, Machhakund,
Kolab even Dandakaranya in all the projects displaced tribals were not
rehabilated. Many of them even displaced twice and thrice for different
projects. He hoped that this convention will give rise to a powerfull
mobilization of the people which can ultimately force the Govt to stop this
anti people project.
Leaders from the affected area Comrade Kachela Ranga Reddy, Tolem
Ramesh (Chintoor), K. Shravan Kumar (Girijana Prajala Sangham, East
Godavari) and Com. S. K. Goush explained the situation in the affected
area and called the participants to intensify the struggle against Polavaram.
A three membered presidium compraising Coms. Bhalachandra, K. Ranga
Reddy and a tribal leader from Malkanagiri, Prabhakar Hantal, conducted
the convention.
A Resolution urging the Govt. to stop the anti people and pro corporate
Polavaram project was passed by the convention. It called upon the affected
people to intensify their agitation against the project and also called upon
different sections of people and democratic organizations and individuals
to extend full support to this struggle.
64
December, 2016

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NEW DEMOCRACY

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