SOCIAL SCIENTIST
V. 32: No.7-8 July-August 2004 #374-375

Editorial note, p. 1

Common Minimum Programme and the Economic Agenda 2004
Amiya Kumar Bagchi * Prabhat Patnaik * CP Chandrasekhar * Ashok Mitra
* Jayati Ghosh * Utsa Patnaik o Madhura Swaminathan * Biswajit Dhar &
Murali Kallummal * CP Chandrasekhar & Jayati Ghosh * Vikas Rawal * K Ashok Rao
* Sukhadeo Thorat * Dinesh Abrol * Subhanil Chowdhury & Prasenjit Bose, p. 3-85

Statement of the Convention, p. 90

Obituary: William H. Hinton (1919-2004) by Daniel Vukovich, p. 93

Book Review: p. 98-102.
Amit Prakash's Review of Community and Identities: Contemporary Discources on Culture and Politics in India, Jodhka, Surinder S., Sage, New Delhi, 2001, pp. 269, Rs. 300.00

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Editorial Note

The current issue of Social Scientist carries the set of papers which were presented at a Convention organized jointly by this journal and Sahmat on July 5 in Delhi. Even though the Convention, held on the eve of the first budget of the UPA government, was meant to nneke a contribution germane to that exercise, we arc reproducing the papers because they raise a number of basic issues whose relevance extends well beyond a particular budget.

The immediate provocation for holding the Convention was the adoption of the Common Minimum Programme by the UPA and its broad endorsement by the Left. The CMP, no matter how disappointing its individual provisions, or lack of them, represented an advance in at least two ways: first, it accepted the need for the provision of some immediate relief to the people (in the form for instance of the Employment Guarantee Scheme) in the place of the earlier reliance of a "trickle down" effect of higher growth; secondly, it clearly held the State responsible for providing such relief. Both these represented intellectual retreats from the neo-liberal position, and a bowing to the popular mood as expressed in the electoral verdict.

Among the votaries of neo-liberalism, this retreat aroused two kinds of response. one was of outright opposition, which argued that the CMP was intellectually shoddy, and that its promises were simply infeasible. This response merged with the attack which finance capital, both domestic and foreign, had launched anyway against the perceived new turn in economic policy. The second response, echoing more recent World Bank formulations, was articulated by the Prime Minister himself when he asked for "liberalization with a human face": it suggested that the new turn was not against liberalization, but was perfectly compatible with liberalization, a view which was endorsed subsequently by no less a person that Amartya Sen.

What the Convention argued was quite different. It rejected both these positions. its broad perspective, reflected in the essays collected here, is that the CMP promises arc perfectly capable of being realized (indeed they represent goals that are much too meager), but that their realization would necessarily entail a rolling back of liberalization, and hence a confrontation with foreign

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agencies and domestic vested interests promoting liberalization, for which the government must have the requisite political will. The very exercise of such political will moreover would entail a breaking out of the spontaneous logic of liberalization, and hence the pursuit of an alternative trajectory of development. The government must be prepared for such an alternative trajectory. In other words, any stepping away from the liberalization trajectory cannot remain a piecemeal, localized affair; it would entail willynilly the pursuit of an altogether different, alternative, trajectory. "Liberalization" and "human face" are mutually irreconcilable. If one pursues "liberalization" then one has to forget the "human face", as has been the case in the past; on the other hand if one is serious about the "human face", then, whether one likes it or not, one has to step away from the spontaneous and immanent logic of "liberalization".

The budget presented by the new Finance Minister has in fact proved the correctness of the Convention's reasoning. What the budget has provided for rural development, including the Employment Guarantee Scheme, is so meager that one cannot help suspecting its intentions. This meagerness in turn arises from its inability to mobilize resources against the wishes of financial interests. Thraldom to finance capital has incapacitated the government to a degree where the "human face" it seeks to provide remains elusive.

To illustrate the point, consider the case of the EGS. Against the scaremongers" who were arguing that the EGS would require as much as 15 percent of the GDP, Ghosh and Chadrashekhar in their paper for the Contention argue that the figure is more likely to be around 2 percent. What is more, since the provision of some employment generates demand for, and hence creates, further employment (a process referred to as the "employment multiplier"), what the government needs to spend is even less that this figure. Assuming an employment multiplier of 2 (which is quite modest), the government needs to spend no more than 1 percent of GDP, or about Rs. 25,000 crores, to achieve its goal of 100 days of guaranteed employment per household. In this year's budget itself there has been a massive increase in the defence spending; if the government had taken Rs. 12,000 crores from defence expenditure (which would have left it at the same level as the interim budget of the NDA government) and kept the fiscal deficit at the same figure, 4.9 percent, as was achieved last year (instead of bringing it down to 4.4 percent), it would have got the Rs. 25,000 crores needed for the EGS. It could in short have launched the EGS straightaway. But, since it could not assert its will against the caprices of finance capital, it proved unequal to the task.

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