Amit Bhattacharya

Models of Underdevelopment and Dependence: As S. K. Ghosh rightly points out, it is untenable to talk of universal principles of historical progress, for the laws of development do not apply equally to all countries. In fact, the initial conditions in the Western countries on the eve of the Industrial Revolution were fundamentally different from conditions in post-colonial India when planning was undertaken. Ghosh has described in detail the basic differences in the two situations and we are not going into that. This much can be said that many of the Western countries had their colonies in the Third World countries, the plunder of which formed a considerable part of their capital formation. Colonies like India also served as markets for the manufactured goods of Britain and in the process their own industries were crippled. In such a situation, as Ghosh opines, it is preposterous to argue as Nehru did, where imperialist capital dominated the economy, where industrialization depended on the influx of fresh foreign capital and technology, was capable of accomplishing the industrial revolution which had occurred in the bourgeois nation-states of the West with their independent self-reliant economies.

What about the situation in post-revolutionary China? In China after liberation in 1949 the Chinese people, following the political line of Mao Tse-tung, demolished the structural barriers to progress and indeed, instead of being models of development and self-reliance, India’s plans are, in reality, models of underdevelopment and dependence. Underdevelopment is a product of a set of production relations which act as a barrier to the development of productive forces. India’s development does not depend on more and still more import of foreign capital and technology, but on the liquidation of the existing production relations and grip of foreign capital, and the reorganization of the economy along independent lines and in the interest of the people. That again depends, as Ghosh points out, on the political question: which classes hold state power.

Ghosh points out that during more than four decades of planning, India’s industries had no doubt expanded and diversified and her agricultural production has increased. In this context, Ghosh reminds us that the contribution of foreign capital–investment capital as also loan capital–and technology to this growth and diversification was quite considerable and that foreign capital’s hold on Indian economy had been tightening instead of relaxing.

What is important is that India’s vast human and material resources are underutilized, even unemployed and wasted. The actual output fell far short of the potential output. The Human Development Report of 1994, prepared by the United Nations Development Programme, which ranks 173 countries of the world using three indicators–life expectancy, education and per capita income–assigns India 135th position, even below Pakistan and Vietnam.(Economic Times, 12 June, 1994). In terms of per capita income, India’s rank stood at 146, according to the Human Development Report of 1993. (Business Standard, 26 May, 1993).

The fact is that despite ‘development’ planning for more than 45 years, India continued to under-develop. The gulf between the advanced capitalist countries and India grew wider with the passing of years. In a developed country, industrial workers far outnumber the agricultural workforce. In our country, the reverse is true: the agricultural workforce far outnumbers industrial workforce and the number of workers engaged in traditional, non-mechanized industries is almost as large as that of the workers employed industries–small, medium and big. In fact, overcrowding of agriculture, the existence of pre-capitalist relations, bonded labour, as well as a large pre-capitalist sector in industry are features of India’s underdevelopment.

According to Ghosh, a basic feature of the world economy is internationalization of capital on a large scale. A transnational corporation operates in different countries and forms ties with domestic capital of host countries; but it has a national centre from which it is controlled. These national centres–the advanced capitalist countries–are independent, self-reliant. However, the relationship between the advanced capitalist countries and countries like India is not one of based on equality, but of dependence. Indian big capital plays a subordinate role–”the role of an underling”. Let us quote from Joint International Business Ventures, a Columbia University project: “Advanced technical know-how and continuing research give [foreign] investor companies effective control of joint ventures without majority ownership or legal control of the board”. (W.G. Friedman and G. Kalmanoff (eds.), Joint International Business Ventures, New York, 1961, pp.151, 153: see also Selig S. Harrison (ed), India and the United States, New York, 1961, pp.154-55; “Transnational Corporations in Electrical Industry”, Economic and Political Weekly, 20 January, 1979, pp.103-06). It also says: “To spare local susceptibilities, the existence of investor company control is often disguised in the form of technical assistance which do not overtly convey managerial powers”. (Ibid).Kidron also observed: “the technologically-progressive firm would seem securely in control of a joint venture in a technologically-intensive industry whatever its financial stake”. (Kidron, op.cit, p.288).

The reality, Ghosh argues, is that India is fated to under-develop so long as the structural barriers to her under-development are not removed, so long as semi-feudal relations prevail and India orbits the capitalist-imperialist system as a satellite.

What were the structural barriers to development? When planning was undertaken, zamindari and talukdari were abolished. But huge compensation was paid to these classes of rent-collecting intermediaries between the state and the peasantry. Practically little was done to end the concentration of land in the hands of the rural oligarchy. According to the Eighth Five year Plan (vol.1, pp.13-14), two-thirds of the workforce in India still depends on agriculture and allied activities.

A 1979 article in the Economic and Political Weekly stated: “The extent of surplus land redistribution under the land reform programme is less than one-fourth of the officially estimated surplus. More important, ‘the officially estimated surplus is [only] a fraction of the area held in large ownership holdings as estimated from survey data’. The upshot is that land redistribution has touched less than one-half of one per cent of the total land under cultivation. (The Economic and Political Stability, EPW, Special Number, August, 1997, p. 1220).

Thus, the basic problem–the problem of ownership of land–remains unsolved. Vast human resources remain unutilized or under-utilized and, naturally, the actual economic surplus from agriculture is far less than potential surplus. Moreover, much of the surplus is appropriated by landlords, usurers and traders and mostly invested not for productive purposes but in the purchase of land, in usury and speculation. Naturally, or lack of purchasing power of the peasantry, the market for industrial goods catering for the needs of the masses remains stagnant.

Ghosh points out that even for food, India had to depend for years on the USA. When, in the mid-1960s, the food crisis grew alarming, the Indian ruling classes, unable because of their class character to bring about radical changes, and prodded by US imperialism and the World Bank, adopted a technocratic approach to the food problem and opted for the Green Revolution. That played havoc for Indian agriculture and society. The genesis, character and impact of the Green Revolution have been dealt with in detail in another book by S.K. Ghosh entitled Imperialism’s Tightening Grip on Indian Agriculture (1998). This has been discussed in a separate chapter.

(Suniti Kumar Ghosh’s Contribution to Indian Historical Studies) Content courtesy: The Frontier