“AT a business meet on 12 January 2005, Dr Manmohan Singh showered fulsome praise on Buddhadeb Bhattacharjee as “dynamic”, “the Nation’s Best Chief Minister”, whose “wit and wisdom”, “qualities of head and heart”, “courage of conviction and passionate commitment to the cause of the working people of India” he admired, saying “with Buddhadeb Babu at the helm of affairs it appears Bengal is once again forging ahead… If today there is a meeting of minds between Delhi and Kolkata, it is because the ideas that I and Buddhadebji represent have captured the minds of the people of India. This is the idea of growth with equity and social justice, the idea that economic liberalization and modernization have to be mindful of the needs of the poor and the marginalized.” With such support of a Congress Prime Minister (as well as proximity to Pranab Mukherjee), Mr Bhattacharjee could hardly have feared the local Congress and Trinamul would pose any threat in the 2006 Assembly Elections despite having more potential voters between them than the CPI-M. Dr Singh returned to the “needs of the poor and the marginalized” at another business meet on 8 January 2007 promising to “unveil a new Rehabilitation Policy in three months to increase the pace of industrialisation” which would be “more progressive, humane and conducive to the long-term welfare of all stakeholders”, while his businessman host pointedly stated about Singur “land for industry must be made available to move the Indian manufacturing sector ahead”. The “meeting of minds between Delhi and Kolkata” seems to be that agriculture allegedly has become a relatively backward slow-growing sector deserving to yield in the purported larger national interest to industry and services: what the PM means by “long-term welfare of all stakeholders” is the same as the new CPI-M party-line that the sons of farmers should not remain farmers (but become automobile technicians or IT workers or restaurant waiters instead). It is a political viewpoint coinciding with interests of organised capital and industrial labour in India today, as represented by business lobbies like CII, FICCI and Assocham on one hand, and unions like CITU and INTUC on the other. Business Standard succinctly (and ominously) advocated this point of view in its lead editorial of 9 January as follows: “it has to be recognised that the world over capitalism has progressed only with the landed becoming landless and getting absorbed in the industrial/service sector labour force ~ indeed it is obvious that if people don’t get off the land, their incomes will rise only slowly”. “
I went on to say
“Land is the first and ultimate means of production, and the attack of the powerful on land-holdings or land-rights of the unorganised or powerless has been a worldwide phenomenon ~ across both capitalism and communism.”
It is interesting and amusing to see today’s newspapers report that the person who appointed Dr Manmohan Singh to be India’s PM, namely Sonia Gandhi, has taken a 180-degree turn on this subject while sitting beside Mamata Banerjee yesterday.
She apparently said: “I am happy so be sharing the dais with Mamata Banerjee once again….in Nandigram and Singur the State Government had unleashed dictatorship in the garb of democracy… . In the name of development (the CPI(M)) created terror in Nandigram and Singur. In the name of development, they snatched the land from the poor people there.”
Now what is the poor old CPI(M) to think after all this! Politics can be so entertaining. 😀
Anarchy in Bengal
Intra-Left bandh marks the final unravelling of “Brand Buddha”
First published in The Sunday Statesman, 10 February 2008, Editorial Page Special Article http://www.thestatesman.net
Once upon a time, not very long ago, there was something called “Brand Buddha”. The basic idea was that the CPI-M had quietly reformed itself, passing the baton from old unreconstructed communists like Jyoti Basu and Harkishan Surjeet to a new generation of pragmatists and modernists represented by Prakash Karat’s JNU coterie at the national level and the smartly dressed bhadralok persona of Buddhadeb Bhattacharjee in Kolkata itself.
Big businessmen and their foreign collaborators were no longer the “comprador bourgeoisie” but rather were allies to whom government subsidies and concessions, especially land, would be and should be granted. The “investment climate” and “work culture” under a CPI-M government would be among the best in India. High employment levels would be the hoped-for result, especially employment for those associated positively with the CPI-M and its friends. The usual set of academics, journalists, film and TV actors, dancers, sportsmen, singers, NRIs etc who were directly or indirectly recipients of the largesse of the West Bengal Government helped to contribute to the idea that a viable political brand had been identified and it represented the unique way forward for the State. “You are either with us or against us” has always been the brief philosophy of communist and fascist parties around the world ~ joining up with Brand Buddha meant you were part of the bandwagon of progress, if you did not join up you would be left behind. (No one thought Brand Buddha could be or would come to be actively opposed.)
At the national level, the old Indira Gandhi-Communist alliance was restored by way of a new one led by Sonia Gandhi. Jyoti Basu had frankly described Sonia as “a housewife” but now that the housewife was running the country and needed the Communists’ help in doing so, the opportunity was not to be missed to extract whatever price was possible. The main broker between 10 Janpath and West Bengal’s Communists was Pranab Mukherjee who was most familiar with the old Indira-style of opportunistic Indian politics, and who was given the mandate of appeasing the Communists with whatever they needed while also being the pointman to make a phone call to his friend Buddhadeb to see to it, e.g., that the CPI-M like everyone else enjoyed the American and Indian air force show at Kalaikunda.
The “enemy” (for, after all, every unholy alliance must have an identifiable enemy) was the wicked old BJP. Everyone from Sonia Gandhi via Pranab Mukherjee to Jyoti Basu would voice the fear that if they did not join hands in socialist secularist unity, the BJP Boogeyman was destined to return to power. And of course the BJP did nothing and had little positive in its record to dissipate those fears. It was indeed filled with old men and it had indeed behaved wickedly while in power. From negligence in the Graham Staines murder in Orissa to the pogrom in Gujarat, there was little to suggest the BJP’s leadership had any clear ideas or principles about right and wrong governance. In office from 1998-2004, its macroeconomic record was woeful, mainly because it knew no better than maintain the same economic bureaucrats as its predecessors, and allow its finance and other economic ministers to be wholly manipulated by big business lobbies. Now when those bureaucrats and big business lobbies created, endorsed and marketed Brand Buddha itself, the BJP found it had been successfully finessed and could hardly speak a word in opposition. If the BJP thinks it can win in 2009 by its discredited leaders merely recycling anti-Muslim or anti-Christian formulae as before, it may be in for a surprise and a disappointment.
Brand Buddha reached its pinnacle when Sonia Gandhi’s Prime Minister endorsed it personally at a big business meeting in Kolkata on 12 January 2005. But the contradiction involved in Sonia Gandhi then giving merely a perfunctory speech on behalf of the West Bengal Congress in the 2006 election campaign could not be covered up and did not escape the notice of her local partymen.
Brand Buddha started to unravel when Mamata Banerjee realized that all the CPI-M really had was a brand being marketed, not something based on any new and fresh political and economic reality. Mamata has never accepted Sonia’s right to lead the Congress which is what had led to the Trinamul breaking away ~ at the same time, even when she was allied to the BJP, no one could accuse her of being anti-Muslim or anything but secular in her political identity. Her three-week long fast over Singur blocked Metro Channel and riveted the country’s political attention while TV broadcasts of the police-behaviour at Singur acted as a signal to the people of Nandigram to prepare for the same or worse.
The fact the Nandigram peasants who feared losing their land were mostly Muslim caused the central Sonia-Pranab-Buddhadeb myth to explode that only they stood to protect Muslims from the BJP. Once that myth had exploded, the fact the emperor was naked came to be seen by all. There never had been a viable political or economic product behind the brand that was being so heavily advertised and endorsed. If Buddhadeb and his party had been genuinely confident of possessing a constructive new economic policy for West Bengal, they should have transparently and honestly discussed it in detail and gone to the people to ask for a mandate on it before the 2006 elections.
Or when the issue boiled over and Mamata went on her fast at the end of 2006, Buddhadeb could have dissolved the Assembly and gone for fresh elections asking for a specific mandate from Bengal’s voters. Instead, the Chief Minister or his senior ministers not once found the need or courage to address all of West Bengal’s people on television even though the State came to be rocked by violence, mayhem and tragedy – hardly a climate for investment and new employment.
2007 saw the CPI-M and its New Delhi Congress friends being revealed to be bunglers, who could not cope with things as small as Rizwanur’s love-marriage or Taslima’s writings except with heavy-handed repression. The CPI-M’s own unions had crippled their own Government and the State before with bandhs, but not until the Cooch Behar firings has the anarchy become complete. The Forward Bloc protesters were, after all, merely asking for implementation of Sonia Gandhi’s favourite scheme of rural employment guarantees! Anarchy is the absence of government and when a government is so divided that its members cannot decide if they are the government or the opposition, it has to be said there is an absence of government.
Recovery requires candour which in turn requires honesty and introspection, all of which may be qualities too difficult to find. What Brand Buddha could have and should have been about is this: the CPI-M cutting waste, fraud and abuse of publicly owned resources from all the organs, departments and projects of the West Bengal Government that they have controlled for decades, and drastically improving the productivity of all those receiving State government wages or contracts. Real governance does not require any phony advertising because success advertises itself.
Aren’t there any Marxist MBAs?
First published in The Statesman, August 29 2007, Frontpage comment, http://www.thestatesman.net
The West Bengal Government and Tata Motors have come into what appears to be a most bizarre financial agreement regarding 645.67 acres of agricultural land in Singur. What we are told from court documents submitted on August 27 by Tata’s counsel Mr Samaraditya Pal to the Honourable Division Bench of the Chief Justice Mr SS Nijjar and Mr Justice Pinaki Chandra Ghose is that a complicated schedule of payments is being planned for 90 years.
First there is a plan for 30 years with changes occurring every five years, then there is a plan for another 30 years with changes occurring every ten years, and finally there is a plan for the last 30 years with no changes occurring at all. 90 years is a very long time. A child born today will likely not be alive when this agreement comes to end though his/her grandchildren could be.
Tata Motors itself is hardly today what it was ten years ago and is unlikely to be the same corporate body 50 or 90 years from now. The political entities known as West Bengal or for that matter the Republic of India itself may well be very different in 2047, one hundred years after Independence, let alone in 2097 when this purported agreement shall end. 90 years ago the Ford Motor Company was mass-producing its famous Model-T – any product that Tata Motors produces at Singur today is hardly going to be the same 90 years from now. Our great grand children may look back at all this when the agreement ends and say it all looks pretty ridiculous in retrospect.
Even so, the numbers that have been now released to the Honourable Court allow some simple calculations to take place. The first point is that a payment made in 2007 cannot be added directly to a payment made in 2008 or to one in 2009, etc. It is meaningless to do so. However, if, say, Rs 1000 is paid in each of these years, and the market interest-rate is, say, 10%, what we may do is add Rs. 1000 with Rs. 1000/(1.1) with Rs. 1000/(1.1) squared to obtain a summable stream of Rs. 1000+Rs.909+Rs826 = Rs. 2735.
That sum of Rs 2735 is the present-value of the stream of three payments of Rs 1000 in each of three years given a constant interest-rate of 10%. On such a basis, given the payment-structure stated to the Honourable Court by Tata Motors, and assuming a constant interest-rate of 8% per annum in each year for the next 90 years, the present-value of all the payments to be made by Tata to West Bengal for the 645.67 acres of Singur land comes to Rs. 274.13 million (Rs. 27.413 crore), or a price of about Rs. 0.4246 million (Rs. 4.246 lakh) per acre. That is the effective market price of the land as valued in the contract, assuming a constant interest-rate of, say, 8%. (If a variable market-determined interest-rate had been used e.g. some rate added to the London InterBank Offer Rate in a given year, we could not make such a calculation today.)
If we further assume that the value of paper-money relative to land and goods and services in general may itself deteriorate through inflation, this figure would change. If, for example, we assume a low rate of inflation of 4% per annum for each of 90 years, that would mean the relevant interest-rate to discount the stream of payments would have to be 8%+4% = 12%. On that assumption, the present value of the entire stream of payments proposed to be made by Tata to West Bengal comes to Rs. 140 million in current rupees, and the price per acre of land becomes Rs 0.217 million or Rs. 2.17 lakhs. If the rate of inflation was high, say 10% per annum, the present value becomes Rs. 81.7 million and the price per acre of land being paid by Tata Motors is Rs 0.126 million or Rs. 1.26 lakhs. In other words, the higher the rate of paper-money inflation that occurs in the future, the cheaper Tata has obtained the land (and, conversely, the worse off the original peasant owners of the land who have been left with paper money paid to them by the West Bengal Government).
The point is also clear that the higher the rate at which one discounts the future, the lower shall be the present-value of the land. And also the higher this discount-rate, the more irrelevant the future becomes to present decision-making.
It is astonishing that neither Tata Motors’ high-powered MBA embellished management cadre nor anyone entrenched in the Marxist academic or policy establishment of West Bengal seems to have made such obvious calculations for the Honourable Court to understand things easily. Instead they have “added” the total payments to be made “raw” and said that some Rs. 8.558 billion (Rs. 855.8 crores) is due to be paid over 90 years – a meaningless statement because no such addition over time makes any financial sense at all. Are there no Marxist MBAs, or are all MBAs being mistaught the basics in their finance-courses?