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Issue #1552      20 June 2012

India’s grim economic situation

Statement, Communist Party of India (Marxist)

The Central Committee expressed concern at the economic slowdown facing the country. The GDP growth rate declined to 6.5 percent in 2011-12 and there is a slowdown in industrial production. The trade deficit is widening in the backdrop of slowdown in exports. The Indian rupee has depreciated to over Rs 55 per dollar. There is a sharp increase in the external debt. Even as the economic slowdown is occurring, the inflation rate continues to be high with food inflation touching 10.5 percent. This is adding to the suffering of the people.

The ruling establishment and the corporate media are portraying this deterioration as a failure to push through neo-liberal reforms. This is a travesty of facts. On the contrary, like in the rest of the world, the worsening economic situation in India is a direct outcome of the pursuit of neo-liberal policies. The increasing income inequalities have made the growth process unsustainable; deregulation and concessions for speculative finance and the big corporates are affecting the stability of the financial sector.

The Central Committee strongly opposes the moves to push through more neo-liberal measures. The Central Committee condemns the move to open up the FDI (Foreign Direct Investment) in multi-brand retail. The Party, along with other Left and democratic forces, will conduct a widespread movement to block any such move. The Central Committee calls upon all the opposition parties in Parliament to oppose the legislations which seek to increase the FDI limit in banking and insurance sectors and the Pension Bill, which is meant to privatise pension funds.

Food Stocks

The Central Committee noted that the total stock of food grains in the central pool has reached 7.11 crore metric tonnes in May 2012. This is 5 crore metric tonnes in excess of the buffer stock norm. Much of these stocks are also rotting in the absence of adequate warehousing space. Yet the government refuses to offload these stocks of wheat and rice at cheap prices to the poor and malnourished. The government is more interested in exporting food grains, even by incentivising private traders.

The Central Committee demands that the Union government release these food stocks at BPL (Below Poverty Line) prices through the PDS (Public Distribution System) and under special schemes for the drought-affected areas and to the poor and destitute sections.

Petrol Price Hike

The Central Committee reiterated its opposition to the steep petrol price hike. The reduction of the price by Rs. 2 per litre is totally inadequate since the price is still higher by over Rs. 5.50 per litre. The Central Committee demands a full rollback of the petrol price increase.

Coal Block Allocations

According to reports, the Comptroller and Auditor General has found the process of allocation of coal blocks to various companies, faulty. This has resulted in huge profits for the private parties and massive loss of revenue to the government. The Central Vigilance Commissioner has already referred the matter to the CBI (Central Bureau of Investigation) for investigation. The response of the Prime Minister’s office to the allegations on the allocations is not credible.

The Central Committee demands a thorough investigation by the CBI into the matter and to fix the responsibility of those involved.

US Strategic Designs

The US Defence Secretary Leon Panetta visited Delhi in order to involve India in the United States strategic pivot to the Asia-Pacific region. In the words of Panetta, India should be a “lynchpin” in the US strategy in Asia. The UPA government should realise the dangers of involving itself in a strategic alliance with the United States and firmly turn down any such role in the American strategic designs in Asia.

The Central Committee called upon the UPA government not to fall in line with the US-NATO and the Gulf states on the developments in Syria. The Indian government should not become party to moves to stoke civil war conditions and destabilize Syria.

The Central Committee strongly criticised the UPA government’s steps to curtail oil purchases from Iran. This is being done under pressure from the United States and it goes against the vital interests of the country with regard to energy security.

Central Secretariat  

Next article – Abu Qatada: when the net tightens on justice

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