On the bogey of “shortage of capital”

In their attempt to justify the opening up of retail trade and many other sectors to foreign direct investment, the Prime Minister and many other so-called economic experts argue that increased inflow of foreign capital is essential to save our economy from sinking deeper into crisis.

In their attempt to justify the opening up of retail trade and many other sectors to foreign direct investment, the Prime Minister and many other so-called economic experts argue that increased inflow of foreign capital is essential to save our economy from sinking deeper into crisis. They create the impression that “shortage of capital” is a serious problem facing the Indian economy and its prospects.

This argument was effectively countered by Comrade Prakash Rao, spokesperson of Communist Ghadar Party, in his speech at the conference organised by Mazdoor Ekta Committee on 21st October. He pointed out that for every 100 dollars of foreign capital flowing into our country, over 60 dollars of Indian capital has been flowing abroad in recent years. Several Indian companies have been buying up mines and factories in many countries. The export of capital, the outward flow of FDI, reached US$ 19.4 billion in 2008-09. This is equivalent to about Rs. 100,000 crore. As was pointed out, “If shortage of capital is really such a big concern, then why does the Prime Minister not take steps to stop the Tatas, Reliance and others from exporting such massive amounts of capital?”

Through the program of so-called reforms launched two decades ago, the big monopoly houses of our country, headed by the Tatas and Ambanis, have already attained global status. Examples include the steel industry, chemicals and pharmaceuticals, oil exploration and petroleum refineries. They are exporting their capital to invest abroad in these sectors so that they can attain global standards of concentration of capital, scale of production and modern techniques in various sectors. They are buying up companies in Europe and North America, acquiring oil wells in East Asia, Latin America and Central Asia. They are out to expand their global presence and to increase their share of the world market and control over the sources of raw material, in contention and collusion with other global capitalist monopolies.

In sectors where the level of concentration and scale of operations in our country is way behind international standards, the big capitalists are keen to attract the biggest monopolies of the world to come and invest here, so as to attain global standards as rapidly as possible. This is the reason, for instance, why they are keen to attract foreign investment in the retail trade business as well as in insurance and pension funds businesses.

In retail trade, Indian monopoly houses want to partner with the global giants to rapidly increase the scale of their operations, both within the country and globally. The opening up of the domestic retail market to Wal-Mart and other global monopolies will lead not only to massive inflow of foreign capital into our country, but also to massive outflow of capital from our country to others.

There are some sectors – such as automobiles and auto components, service exports including BPOs and call centres – which have been identified as areas where India should become the “preferred destination” for the biggest monopolies of the world to locate their production. With this aim, central and state governments are acting together to deprive workers of their rights, so as to offer dirt cheap labour for super-exploitation to attract foreign capitalist monopolies.

The real aim of the recent policy changes is to intensify the exploitation and plunder of the land and labour of our people, to generate enormous profits for the foreign monopolies as well as the Indian monopolies, those of the Tatas, Reliance, Birlas and other groups. The big capitalists of our country want to use increased inflow of FDI as the springboard to expand their markets and sphere of influence abroad. Economic policy is set by those who believe that maximising the growth of Indian big business is to be pursued at the expense of all other considerations.

Shortage of capital is not the main problem afflicting our economy. The main problem is that the economy is driven by the unlimited greed and imperialist aims of a tiny super-wealthy minority, at the expense of fulfilling the needs of those who toil.

In pursuit of its greed and imperialist ambitions, the big bourgeoisie of our country is pursuing a course that is intensifying the foreign imperialist domination and plunder of our country.

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