The Indian economy’s critical condition during Prime Minister Narendra Modi’s second tenure is fuelling a major crisis, whose effects are felt beyond the borders as well. While the western mainstream press had been supportive of a “pro-reform” Modi in 2014, it gradually became disenchanted by 2017-18, when Modi’s economic policies showed no sign of providing any profiteering opportunities to big capital. Thus, before the onset of the Indian general election in 2019, the Time magazine called Modi the “divider in-chief” in one of its cover stories. Most of the big corporate-controlled mainstream press in the west are also criticising Modi’s hyper-nationalist rhetoric-mongering, his jingoistic politics and disarrayed economic policies. The reason behind their sharp criticism, despite their Indian allies supporting Modi wholeheartedly, is the inability of Modi’s government to bring an end to a deadlock and pessimistic weather that engulfed the Indian economic scenario.
The Economist published an article titled India’s government is scrambling to revive the economy, which narrated the scenario of the present economic crisis and how the Modi regime is trying to resolve the issue by providing piecemeal solution — platters with a plethora of dishes in small quantities — to satiate the hunger of the corporate houses. The article expressed scepticism over the Indian government’s ability to resolve a crisis that started unfolding during the tenure of former finance minister late Arun Jaitley and is even continuing now when the Modi 2.0 government is established with Finance Minister Nirmala Sitharaman trying to douse the wildfire with an injection syringe full of water. This scepticism expressed by the prominent right-wing and conservative western journal reflects the general pessimism prevalent among the western capitalists regarding India in the hands of Modi and his coterie.
It’s not only The Economist but newspapers from the Washington Post, The New York Times, the BBC, etc, have been vocal against the Modi regime’s violations of human rights in Jammu & Kashmir or the Hindutva fascist politics practised by his Bharatiya Janata Party (BJP). They are criticising the Modi regime and exposing its fallacy not because they themselves practice what they preach but they, ie, the representatives of the big imperialist cartels, aren’t experiencing what Modi promised to them or their Indian comprador allies. The rise and rise of Modi only meant the rise and profiteering by a selected clique of crony-comprador capitalists and their foreign masters, while the rest were left high and dry.
The foremost reason for the economic slowdown that has gripped the economy right now is the lack of trust of the big comprador capitalists on the Modi regime, as it shows its bias towards them by upholding the interests of a select group of big crony-comprador donors of the BJP and its ideological mentor – the Rashtriya Swayamsevak Sangh. Only the two Reliance offshoots owned by the Ambani brothers and Gautam Adani’s Adani Group, along with their foreign investors and masters, benefitted most under Modi’s rule. Since 2014, the fortunes of these big conglomerates owned by India’s biggest business houses, experienced a rapid growth as the prime minister became their political patron and eventually helped in growing their business.
In this article news website News Click shares 18 deals that the Adani and Ambani groups managed to sign thanks to Modi’s incessant globetrotting as their “business development manager”. The Adani Group and the Ambanis benefitted from Modi’s generosity several times since 2014. Their constant growth became an envious optics for other crony-comprador capitalists baying for their share of the booty.
For publishing and exposing the nefarious nexus between the Modi regime and the Adani Group, especially in the alleged Rs 5 billion-worth bonanza given by the government to the group or the undue benefit to evade Rs 10 billion-worth taxes the Economic & Political Weekly fired its former editor Paranjoy Guha Thakurta.
The Modi regime helped Reliance JIO owned by Mukesh Ambani to prosper at the cost of India’s major public sector unit (PSU) telecom companies like Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) by keeping the industry norms at bay. Both BSNL and MTNL are at the verge of closure at present, they even can’t pay salary to their employees, while Reliance JIO is experiencing a massive growth and monopoly control in the Indian market.
While the elder Ambani enjoyed the extremely impressive show of Reliance JIO, the younger brother, Anil Ambani, got a plump cake when Modi tried to rescue him from the verge of a financial collapse and bankruptcy by removing the PSU Hindustan Aeronautics Ltd (HAL) from the Rafale Jet deal signed by the previous Congress party-led United Progressive Alliance II (UPA II) government with Dassault Aviation of France. The medium multi-role combat aircraft (MMRCA) deal between the Government of India and Dassault for 128 Rafale Jet was totally changed by the Modi regime, without calling for a fresh tender, to make a new agreement for 36 ready-to-fly Rafale Jets. This new deal replaced HAL with a novice firm Reliance Defence Ltd (RDL), which never made a single aircraft or provided maintenance service to any. As HAL was left to suffer, the RDL formed a joint venture with Dassault Aviation after Modi’s France visit in April 2016 with the junior Ambani brother and signed the new €7.8 billion deal for 36 MMRCAs, jeopardising India’s long-term security needs.
It’s not only the RDL, Adani Group’s Adani Aero Defence Systems and Technologies also entered into the defence sector and partnered with Swedish SAAB and Zionist Israeli Elbit-ISTAR. It’s indeed quite fathomable that this new partnership by the Adani Group will eventually penetrate deep into the Indian defence industry and build a large-scale order base for itself using the clout on the prime minister and the BJP-RSS.
Showing camaraderie with a fellow BJP lover, the Adani Group even bought the ailing Reliance Power from junior Ambani brother, however, didn’t decide upon its Rs 14.52 billion-worth pending taxes. There was no news on the Adani Group settling on the amount and the government didn’t press the group for money. Virtually, these two groups are beyond the government’s tax net.
The non-performing assets (NPAs) of the public sector banks (PSBs) increased considerably under Modi’s rule as most of his corporate donors used the privileges granted to them to usurp the PSB loans. Even the BJP’s ill-famed loose cannon Subramanian Swamy called Mr Adani the biggest “NPA trapeze artiste” in public sector units (PSU). The Ambanis played their role as well in expanding the NPA net, and pushing the PSBs into an abyss of sheer crisis. At present, without calling out the Ambanis or Adani for the NPAs of their respective businesses, the Modi regime is constantly capitalising the crisis-ridden PSBs year after year so that more money from the public exchequer can enter the coffers of these big businesses and their affiliate ventures in the form of NPAs.
No wonder, it was the shares of Adani Group and Reliance Industries that saw a steep increase in price when Modi returned to power with a thumping majority. The bigger roles these two groups, along with their foreign corporate partners, will play in the Indian economy, have strongly influenced their stock prices and they have become hot catches in an uncertain Indian market.
During the UPA II’s reign, the Reliance Industries Ltd saw a rise of Rs 116.84 billion of market capitalisation, during the period of the Modi regime’s rule, the amount increased to Rs 4.84 trillion. The Adani Group’s market capitalisation was around Rs 436.51 billion at the beginning of the UPA II regime, it now stands at Rs 1.63 trillion. The other major beneficiaries of Modi’s largesse, as can be seen from the market capitalisation and growth, are the Bajaj Group, which rose from Rs 763.22 billion during the UPA II reign to Rs 3.62 trillion under Modi.
Though the junior Ambani’s fortune flourished under the Rafale Jet arrangement, his part of the Reliance offshoot entity’s market capitalisation eroded to Rs 651.30 billion during Modi’s reign. The big corporate houses that suffered a downfall in market capitalisation are the Tata Group, which saw erosion from a combined capitalisation of Rs 5.33 trillion during the UPA II regime to Rs 4.22 trillion during Modi’s rule. The six Mahindra groups added Rs 480 billion to the investors’ wealth under Modi vis-a-vis Rs 1.10 trillion during the UPA II reign.
These rises and falls in market capitalisation indicate how the bigger section of the Indian comprador capitalists and their foreign corporate investors whose money enters the market through different routes — especially through the foreign portfolio investment (FPI) route — suffered. The rise of the market capitalisation of a handful of extremely crony-comprador capitalists at the cost of their own decay has irked the major section of the big comprador capitalists, as they see an extreme bias in the Modi regime’s functioning and in its selective support to the hardcore Sangh supporter bodies like that of Adanis and Ambanis.
Today, when the economy has entered a perilous stage, where it’s not able to revive itself and become immune for some time, the crisis within the comprador bourgeoisie deepened and the name-calling exercise became a routine affair. Most of them are indeed eager to have a larger pie for their loot and plunder, however, Modi’s preference is only for the chosen ones. Thus, despite falling into a deeper abyss, the Modi regime’s behavioural pattern didn’t change. Only companies owned by the Reliance offshoots, the Adani Group and few others are able to expect the government doles rolling out to bail them out during the period of absolute low demand.
When a group of comprador capitalists started expressing their anguish over “tax terrorism” under Modi, it was a sign of their clear disapproval of Modi’s ways. The frank admission of Modi’s sycophant Rajiv Kumar — the head of the NITI Ayog — that there is a trust deficit factor in the market, as no one is willing to lend anyone, and no company is eager to invest in the volatile market out of sheer pessimism, showed how the economy is trapped in the mire of a severe crisis. The absolute rejig that the economy needs is not in the radar of the government, which had Sitharaman announcing a series of measures, absolutely cosmetic and ineffective in fighting economic distress like the present one, to hoodwink the big comprador capitalists. The trust wasn’t won.
News of the government usurping an unprecedented Rs 1.76 trillion from the Reserve Bank of India’s (RBI) surplus reserves became viral. The big corporations couldn’t be hopeful that the amount will be reinvested to generate demand, as rural demand has slumped to the lowest mark, while urban demand is also falling gradually. There is a general anxiety that a large part of this amount, which originally comes from the RBI’s contingency funds and dividend, will end up in the coffers of Modi’s most-favoured capitalists and also go towards the government’s perception-management campaigns.
As the reports of the GDP falling to a historic low in 27 quarters came, as the figure, which is already fudged by Modi’s sycophant pundits to swell the dismal figures of economic growth during Modi’s reign and to make it look superior to the UPA II era, the comprador capitalists left-out by this government have started making a noise. The irony is, the economy’s parameter — GDP — fell to its record low of 5% in the first quarter (Q1) of the financial year (2019-20). This is the record low after the Q1 of FY 2012-13 when the growth was 4.9%. Even last year, in Q1 of FY 2018-19, the GDP growth was clocked at 8% according to the new calculations.
Now as there will be a substantial demand for a bailout from the big corporate houses owned by the other big comprador capitalists or their foreign masters. The government will be reluctant to help everyone equally and will cherry pick the big corporations that fulfil the coffers of the RSS or the BJP in return. This will further fuel discontent within the ruling classes and the cleavage will appear prominently, dividing the ruling classes and forcing them into a bitter fight over the booty. More discontent will result in more foreign press criticising Modi for his odd policies, especially on Hindutva fascism, while at the same time, rather than contemplating on the topic of changing the government, the big comprador capitalists and their foreign masters will push the Modi regime to accept their demand and promote a system where they can all take their share of the booty.
Now, at the hour of a grave economic crisis, which is all set to force the government into an austerity drive, the Modi regime will not budge or reconcile with all big comprador capitalists to avoid irking Adani and the Ambanis. If the Modi regime doesn’t address the concerns of the other big comprador capitalists, especially by promoting rural and urban demand through employment generation, then there will be a strong chance of these corporate houses uniting with each other to launch pressure on the government.
Though none of these big comprador capitalists will side with the people in their fight against the Hindutva fascist empire, rather, unite behind the government to thwart a united people’s resistance if such a moment comes, it’s still imperative that the democratic and progressive forces take advantage of this widening rift and contradiction to elevate its struggle against the evil nexus of Modi and his crony-comprador allies to a new height. The economic crisis will drive more people into the realm of sheer destitution and to prevent what’s inevitable under the capitalist system, it’s imperative to unite the most-affected people — the working class, peasantry and toiled masses — for a larger struggle against this anti-people regime.