Natural Gas Pricing or Spectrum, Ambanis Rule

As an Indian We Cannot Allow Squandering of Our Natural Resources

Prabir Purkayastha

The Ministry of Petroleum, after its change of guard from Jaipal Reddy to Veerappa Moily, has been batting for a much higher price of natural gas. This is being supported by Montek Singh Ahluwalia, the Vice-chairman of the Planning Commission, while being opposed by the Ministry of Power and the Ministry of Fertiliser, both pointing out its enormous impact on fertiliser subsidies and electricity prices.

At a conservative estimate, we are talking of an annual net transfer of tens of thousands of crores from the pockets of the consumers to the gas producers, primarily Mukesh Ambani’s Reliance Industries Limited. And as gas and electricity prices are subsidised, it will also mean higher deficits for the government; an increase of gas prices will not only hit the common man but also government finances.Reliance had initially promised gas at $2.34 for 17 years to NTPC for its Kawas and Gandhar plants. Unfortunately, an EGOM, then headed by Pranab Mukherjee, raised the gas price to $4.42 per million BTU (mBTU). Reliance reneged on its contract with NTPC arguing that under the new price set by the EGOM, it could only supply gas at $4.24, leading to these plants being still under hold.

At the revised price of $4.42, under the profit sharing scheme with government of India for KGD6 gas field, a large share of profits would have also accrued to the government. To avoid this, Reliance took the simple route of gold-plating its capital costs in the gas field – it claimed that it would double its production from 40 MMSCMD to 80 MMSCMD by this added investment. In actual practice, the gas yield dropped to about 30 MMSCMD even though the capital costs went up by 4 times! The CAG submitted a scathing report on the actions of both the Petroleum Ministry and Reliance on which the government has yet to take any action.

If all this was not enough, the UPA government wanted to reward Reliance even more. It set up a committee under Rangarajan, the former governor of the Reserve Bank for fixing the gas prices. The Rangarajan Committee’s report makes strange reading. It suggested that Indian gas prices be pegged to a 12-month average of the price of LNG imports to India and the price prevailing in the US, Europe and Japan. Why gas produced in India should be pegged to the market price of imported gas or to gas prices in Japan and Europe who import all their gas, is impossible to fathom.

After all, gas found in India or in India’s economic zone in the seas is Indian peoples’ property. If we give a license to a private or a public sector company to develop such gas fields, yes their costs including reasonable profits should be compensated. But why should they make wind-fall profits merely because the international price of gas rises? In what way is the price of gas in the international market linked to the cost of producing gas in India?

International price parity to Indian producers would make sense only if they are importing the gas or if there are large amounts of raw materials they have to import. Such is not the case here. So why this need to peg Indian produced gas prices to international market prices?

The implications of the Rangarajan Committee’s recommendations are enormous. According to the Ministry of Fertilisers and the Ministry of Power, for every dollar increase in gas price per mBTU, the annual fertiliser subsidy rises by Rs.3,155 crore and the costs to the power sector for fuel increases by Rs.10,040 crore per annum.

The Rangarajan Committee had suggested a graded rise of the gas price starting from $8.8 to about $14 by 2017. Taking only $8.8 as the basis, the annual outflow in terms of subsidies to the fertiliser sector is Rs 16,992-crore and increase cost of fuel for the power sector is Rs 43,360 crore. We are talking of a total amount of Rs. 240,000 crores for the four-year period of 2014-2017. The benefit of this increased price to Reliance is equally staggering – it is of the order of Rs. 80,000 crores!

The Petroleum Ministry submitted a note to the EGOM headed by AK Anthony for accepting the Rangarajan Committee’s proposal of $8.8. Already, the Fertiliser and Power Ministries have submitted detailed notes on this issue to the EGOM opposing this move. Though the Finance Ministry had earlier rejected linking Indian gas prices to international prices, it has suggested a watered down formulae which would lead to a rise of gas price to the level of about $6-7. The basis of such a compromise formulae is again not clear. Planning Commission under Montek has more or less echoed the Rangarjan Committee’s proposal.

Initially, the EGOM lead by Anthony was supposed to decide on the price of gas as also its allocation. It is now understood that the Cabinet Committee on Economic Affairs would be taking a decision on gas pricing, restricting the Anthony led EGOM to only gas allocations. It is also understood that Moily is now arguing for a lower increase, a price of around $6-7 initially.

The question here is not what should be the price of gas but the principle of pricing. Is it to be based on international market prices? Or is to be based on some concrete understanding on how we should price our natural resources? Tomorrow, shall we price our coal and also our drinking water on the market price of coal and water in the US, Japan and Europe as the Rangarajan Committee would have us do for gas?

The key issue here is the one of pricing our natural resources –- be it tangibles like coal, gas and water or intangibles such as airwaves. When it comes to airwaves –- the spectrum -– the government is arguing that it should be kept low in order to lower subscriber prices. When it comes to something even more basic –- costs of energy -– then it wants them to be linked to international prices. This might appear to be contradictory, till we look at the beneficiaries. In the case of gas, it is Mukesh Ambani, for coal or the spectrum, it is Anil Ambani. Ambanis’ interest drives this government, whether it is gas, coal or spectrum!

The Left parties have protested against this completely bogus proposal of linking gas prices to international prices. Tapan Sen, CPI(M) MP and a member of the Parliamentary Standing Committee of the Ministry of Petroleum has pointed out that in Oman, KRIBHCO and IFFCO get gas at 0.77 dollar per mBTU from 2006 and it has increased only by 15% after 6 years. Nowhere in the world is the price of gas pegged to international prices, except perhaps for some banana republics, which India is now rapidly in the danger of becoming. Gurudas Dasgupta, CPI MP, has talked in a press conference last week about this new mega scam and pointed out the adverse impact on the fertiliser and the power sector.

Moily’s response is quite amazing. He has responded by saying that since public sector companies such as GAIL and Indian Oil are major gas producers, they would also benefit and not only Reliance. The issue here –- which we believe that the Minister is not so obtuse that he does not understand –- is that while Government companies such as GAIL and India Oil may benefit but the Government will have to shell out even larger amounts as subsidies to the fertiliser and the power sector.

The distribution companies in the power sector are currently in the red by Rs. 2 lakh crores, a position which will worsen even more with this hike in gas prices. Already, 28,000 MW of gas plants are either commissioned or in the pipeline. All of them will become sick if the gas price rises beyond $5. We then have to either write off the investment in these 28,000 MW of power plants or subsidise the huge gap between the gas and coal prices.

Moily has also said that without raising gas prices to international levels, we will have to import gas which will cost us much more than current gas prices. Again, this is funny logic; we will have to pay imported prices for all our indigenous gas so that we do not import gas and pay imported gas prices!

Reliance is holding the country to ransom by cutting down on gas production and starving existing power and fertiliser plants linked to KGD6 gas field allocations. Reliance has cut down its production from 56 MMSCMD which it was doing at one time to about 34 MMSCMD currently. This has already impacted a number of plants, particularly in Andhra.

Tata and Adani had also adopted a similar strategy with success. They cut down their power production when the cost of imported coal went up and claimed that unless their contracts were changed, they would not be able to supply power. In both cases, nobody talked about the other solution. If KGD6 gas fields and Tata’s and Adani’s power plants cannot be run under the existing contracts, the government has the right to nationalise them and run them on its own. But then, under the current dispensation, nationalisation is a dirty word, while capital, as well capitalists are sacred.

The gas pricing issues brings out once again how deeply this government is compromised; or it is ideologically so blinkered that it does not see plain common sense. Knave or fool, take your pick.

Aam Aadmi Party lashes out at the Budget

    The aam aadmi of the country has reasons to feel disappointed, if not cheated, with the Union Budget presented by the ruling coalition that came to power in his name. All over the country, cutting across gender, regions, sectors, classes and the urban/rural divide, the aam aadmi faces a crisis of economic opportunity and livelihood.

    He has suffered from a long period of high inflation, especially in food items. He has long suffered from growth that did not deliver more jobs, a decline in growth now threatens to cut down on existing livelihood opportunities. All the basic amenities that a citizen can expect from democratic governance — public provisions for heath, education and social security — are beyond the reach of the aam aadmi. Rampant corruption from top to the bottom eats into whatever little could trickle down to them.

    The Union Budget is a clever attempt to mislead the public in an election year. The finance minister’s speech offers little remedy for the key problems facing the Indian economy that he himself begins by acknowledging: slowdown of growth, rising fiscal deficit and current account deficit.

    The current crisis required the government to stimulate domestic investment by encouraging consumption from below; instead the FM remained focused on foreign investors. Controlling inflation required expansion of Public Distribution System and reinforced subsidies on energy and focus on increasing agricultural output in pulses and oilseeds; instead the government has relied on hope.

    Meeting the demands and aspirations of the people required substantial and real increase in social sector expenditure, instead the government has resorted to statistical tricks and gimmicks rather than put its money where its mouth is. Nor is there any evidence of the government being serious about better usage and monitoring of the funds spent on these public provisions.

    Shockingly, the government has not come up with any measure to curb corruption and control the parallel black economy that the public is so visibly exercised about.

    An analysis of the summary statistics of the budget make it clear that there is little connect between the rhetoric of the budget and its actual numbers. In his speech the FM claimed that the government has not spared money for welfare schemes; the fact is that the UPA-2 has drastically cut down on most of the key welfare schemes in the current year itself.

    The FM’s claims about increasing outlays in key sectors is a clear case of statistical fudging; the ‘increase’ claimed by the FM is with reference to the drastically reduced expenditure (revised estimates). In most cases the rise in budget allocations is barely enough to cover inflation.

    In real terms there is no increase in spending for the aam aadmi. The FM has also used the age old device of distracting public attention with the help of some gimmicks that cost very little.

    The government needed to increase tax revenue, which has actually fallen by 4 percent in the current year over what was budgeted; similar false assumptions seem to driving the current projections of 20 percent increase in revenue. The much talked about move to tax the rich turned out to be a damp squib, for it would affect only 42,000 super rich and bring very small gains for the country.

    This small gain would be more than made up by the generous increase in the tax exemption, mostly for the well off and the corporates. The amount of ‘tax foregone’ has gone up from Rs 533,000 crore to Rs. 573,000 crore. There is no change in the capital gains regime to curb speculative gains activity in the stock market.

    The Budget gives no indication of a political will to curb black income generation in the economy. The deferment of implementation of GARR to 2016 is another example of the lack of political will to curb tax avoidance. There is nothing in the Budget to do away with non-transparent instruments like participatory notes or to reformulate the double taxation treaties with ‘tax heavens’ and black economy conduits.

    Most of the schemes meant for the aam aadmi have remained static or have in fact gone down in real terms or even compared to the actual expenditure in the year before. The central plan size has come down from Rs 651,000 crore in the Budget last year to the revised estimate of 556,000 crore, a huge shortfall of Rs 96,000 crore.

    In 2012-13 expenditure on agriculture and allied activities, rural development, irrigation and flood control and welfare of ST has actually gone down compared to the actual expenditure of the previous year. A similar comparison of the expenditure on health and education shows a marginal increase that barely keeps pace with inflation. The total expenditure on social services has fallen short by Rs 23,000 crore compared to the budgeted allocations. This fact acquires significance for much of the social sector expenditure takes place at the level of the states where the transfer has been cut down by as much as 10,000 crore.

    It is unfortunate that even the opposition has not drawn the country’s attention to these statistical lies and inattention to the needs of the aam aadmi. The Aam Aadmi Party resolves to take this collective conspiracy of the political establishment to the people’s court and place the concerns of aam admi at the heart of our economic policy.  

Courtesy: rediff.com

A Communist’s Approach to Religion

CPIM stalwart Abdur Rezzak Mollah says it’s now normal for a communist to be a believer

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He reflects Indian conditions

    West Bengal CPIM leader Abdur Rezzak Mollah‘s comment that it’s now normal for a communist party member to be a believer in his personal life is only a reflection of ground realities. Notwithstanding the communist credo that religion is the opium of the masses, the fact is most communist leaders in India do adhere to some religious faith in private. India is a land of multiple faiths where religion is a significant part of everyday life. In such a scenario, asking members of the communist party to completely reject religion is not practical.Communist parties’ failure to distinguish between the public and the personal is one of the main reasons for their waning acceptance.

    Whether a party member should go on Hajj or perform Puja does not concern the activities of a political party. Passing strictures in this regard has always proved to be counterproductive. Take, for example, the erstwhile Soviet Union where despite the best efforts of the communist party to suppress religion, faith continued to play a vital role in people’s lives and the churches often became a symbol of resistance to state oppression. Similarly, in China the existence of thousands of underground churches has become a source of tension for the communist party.

    Having reconciled to functioning within the framework of Indian multiparty democracy, the CPIM and their ideological ilk cannot afford to adopt the doctrine of universal atheism. Besides, leaders like Mollah – one of the few CPIM leaders to hold on to their MLA seats despite Trinamool’s emphatic victory in Bengal – enjoy grassroots support. Irrespective of their personal religious inclinations they are vital for the political fortunes of the party. In this respect, the communists would do well to officially change their approach to religion.

COUNTERVIEW

Religion has no place in communism

    Atheism has always been a defining marker of a communist. Rooted in Marxism-Leninism; communist ideology categorically denies the existence of God. Its vision of social justice is based on transforming existing material conditions. Like class struggle, atheism is a natural and inalienable part of Marxism. So, when communists start flaunting their religiosity and spiritualism, they cease to be communists. That’s precisely what seems to have become of the prominent CPIM leader Abdur Rezzak Mollah. The CPIM veteran no longer believes in atheism, one of the fundamental communist precepts. Mollah’s statement that his faith in Marx falls below his absolute devotion to Allah and Prophet Muhammad amounts to blasphemy for any communist.

    Marxists perceive religion as holding back human development, a tool used by oppressors to subjugate the poor and the weak. Karl Marx’s famous statement – religion is the opium of the people – has become the bedrock of communist ideology. Like Marx Lenin too believed religion to be one of the pillars holding up the oppressive economic structures of feudalism and capitalism. While believers repose their faith in a liberating spiritual world, often to escape the harsh material conditions around them, communists strongly believe religion to be the ‘yoke’ weighing down mankind. The twain can never meet.

    Religious fervour or sentimentality has no place in the theory of dialectical materialism, the analytical tool used by a communist to not only comprehend but also to transform the world around him/her. Mollah has not only openly expressed his lack of conviction in this article of communist faith, he has done worse by ranking Allah above Marx. The CPIM leader has spoken more like a devout believer than a hard-headed communist, with unshakeable faith in his ideology. It’s perhaps time to remind Mollah of what Leon Trotsky once said: ‘Religiousness is irreconcilable with the Marxian standpoint.’

Courtesy: TOI

Telengana Simmers

The old Congress strategy of procrastination will not solve the tangle; it will only make it worse.

    One of the most dependable and oft-used strategies of the Congress, particularly when dealing with matters which require taking sides in a polarised debate, has been to let matters fester till both sides of the conflict lose energy and hope. It then works towards foisting a muddling compromise which meets none of the basic demands of either side but concedes ground on demands which are high on symbolism and hype. The former prime minister, P V Narasimha Rao ­almost raised such “masterly inactivity” to the level of official policy. It appears that over the last eight years since coming to power in Andhra Pradesh and the Centre in 2004, the two Congress governments have been following precisely such a policy with r­egard to the revived demand for the separate state of ­Telangana. However, instead of helping to resolve the matter, they have only made it more intractable and divisive for the people of Andhra Pradesh.

    Andhra Pradesh was a pioneer in the formation of linguistic states which were spurred on by popular demand stretching from the anti-colonial movements. But even at its moment of birth, there was visible opposition to the merger of the Telangana region – then termed Hyderabad State – with the other Telugu- speaking regions of the Madras Presidency. The naysayers had been won over by the promise of safeguards for the people of Telangana in the new Andhra Pradesh and of a review of the merger decision a decade on. In the mid-1960s, those in Telangana who had opposed the formation of Andhra Pradesh came out to demand a demerger of the state and the formation of a separate Telangana. It led to one of the most intense agitations for a separate state, with hundreds of people losing their lives. It was a combination of police repression, special packages for the people of Telangana and for the leaders of the movement who were awarded with plum positions.

    The revival of the separate Telangana movement in the early years of this century was often viewed as inconsequential, ­given that it was raised by a minor rebel against the then dominant N Chandrababu Naidu, Telugu Desam president and chief ­minister of Andhra Pradesh. However, the Telangana Rashtra Samiti (TRS) and its leader, K Chandrasekhar Rao, despite doing poorly in elections, became enough of a political force to get top billing in Congress leader Y S Rajasekhara Reddy’s poll alliance and ministerial positions at the Centre. Over the years since 2004, with every parliamentary and political defeat that the ruling establishment has inflicted on the TRS, and there have been many, the popular support for a separate state of Telangana has only deepened in the region. Tools such as special packages, ­inducements of leaders, party splits and whips, and high sounding commissions of enquiry, have all been used and have failed. ­Today it is clear to anyone living in Hyderabad or Telangana that the support for a separate state is near universal in this region.

    The ruling powers in Delhi as well as the structural predilection of the Indian state have always been against federal re­organisation of its constitutive units. Nehru and the entire “national” leadership was dead-set against breaking up the provinces and forming linguistic states, despite it having been one of the pre-independence demands of the Indian National Congress. It was only the force of mass movements, whether for ­linguistic states or for secession (as in the case of Nagaland) which pushed through the first phase of state formation in independent India. This could perhaps be viewed as the culmination of a particular development of social and class forces at the ­regional level in India.

    With the massive expansion of the Indian economy and the structural changes in it over the past two decades, new social forces and class relations have emerged which may find the extant political structures to be a hindrance to their further deve­lopment. It is such a perspective that may help us understand the emergence of “new” states in this century. While many of these demands trace a long lineage, they are activated by very contemporary forces and perhaps cannot be understood in terms of reference from the 1960s and earlier. Commodification and market linkages of the peasantry have grown in a context where a large part of the rural population does not depend on agriculture for its primary income. The sources of income and wealth, the networks of exchange and migration too have witnessed major upheavals which have transformed social and economic relations in both town and country. It is these new social classes which are at the forefront of demands for new states, new job quotas and new economic opportunities.

    Telangana comes with a high cost. Not only does it mean difficult political risks for the ruling Congress in Andhra Pradesh, it also opens up the space for demands for Vidarbha and the break-up of Uttar Pradesh; perhaps many more such demands. Particularly in the coastal regions of Andhra Pradesh, the opposition to Telangana has grown into a strong political voice, something which was absent even in 2004, when the TRS joined the government and many people thought Telangana would be formed soon. However, the costs – political and institutional – of not heeding the demand for Telangana may just be adding up to much more. How does a democratic state keep a popular demand in check without increasing the levels of ­political brinkmanship and popular repression? The stalemate of the present-day is a result of the procrastination and wheeling-dealing of the ­governments and political parties in Hyderabad and Delhi. It is now incumbent on them to find a quick solution. Unfortu­nately, the manner in which the recent protest for Telangana was dealt with in Hyderabad does not raise hopes about the ­intentions or ability of the government to deal with the issue honourably.

    It is only so long that Telangana will ­simmer, before it erupts.

Courtesy: EPW

McCarthyism, Mamata Style

Badri Raina

Seeing red: Mamata Banerjee has gone as far as describing court verdicts as purchased, Commissions as useless and civil society groups as nuisance.

Recent events seem to suggest that the patron saint of paranoia has passed on the baton to the West Bengal Chief Minister.

    My alma mater, Wisconsin, is much in the news, sadly for some unlovely reasons; and some equally unlovely events at home remind me of one Joseph McCarthy who used to be a Senator from Wisconsin during 1950-1954, a period which has gone down in American history as the “Second Red Scare”.

    The first red scare is associated with the years just after the Bolshevik Revolution of 1917 when the cry went up on the American mainland that “the Russians are coming”. Much of that has been captured memorably by Robert K. Murray in his book Red Scare: A Study in Hysteria, 1919-1920, published by the University of Minnesota Press in 1955.

    But returning to the second scare: it seemed to some American right-wingers that there was a Communist in every closet on American soil, rather a tribute to the influence that Bolshevism had achieved on both the European and American continents during the period between the First and Second World Wars. A no-holds-barred campaign was unleashed to ferret out these commies from all sorts of nooks and crannies. And the method adopted was of making accusations of disloyalty or treason without proper regard for evidence, a procedure led vociferously by Joseph McCarthy, whence the term McCarthyism.

    The witch-hunt led to thousands of individuals, among them Charlie Chaplin, Bertolt Brecht, W.E.B. Du Bois, Langston Hughes, Arthur Miller, Paul Robeson, Paul Sweezy and many other outstanding intellectuals and creative artists, being hauled up before governmental or private industry panels; the most infamous of these being “The House Un-American Activities Committee”. And most of those summoned found themselves answering accusation by insinuation, innuendo, third party rumour and so forth, with no evidence of actionable criminality. And never mind what Harry Truman had said on record: “In a free country, we punish men for the crimes they commit, but never for the opinions they have.”

    Recent events in West Bengal seem to suggest that good old McCarthy may have passed on the baton to our own Mamata Di. In disregard of Harry Truman, not to speak of the Indian Constitution, there is evidence now to believe that the holding of an opinion unflattering to the power-that-be in West Bengal in and by itself constitutes criminality, deserving of an “off with his head” form of justice on the instant.

    First there was Taniya Bharadwaj who was instantly branded a Maoist for asking a fairly innocuous question of the fairy queen on a TV channel, then the poor professor from Jadavpur University, Ambikesh Mahapatra, who was arrested for circulating a cartoon determined on the instant to be dangerously subversive of Mamata Di, and now a poor farmer, Shiladitya Choudhury, again, ah, a Maoist, or else why would he ask a question about the rising price of fertilizer, and his inability to obtain rice at Rs.2 a kg, as per policy. So off he goes too to the slammer, and no bail yet either.

    How “liberators” turn “oppressors” I was told in confidence by an erstwhile staunch supporter of Mamata Banerjee, the giant killer who it seems is sadly unaccountable to any democratic or legal norm.

    It will be remembered that before the last Assembly elections in West Bengal, when Mamata Banerjee was often accused of collusion with the Maoists, it was her riposte that there were no Maoists in Jangalmahal, and that the mischief was entirely owing to the cadres of the CPI(M). Now that the latter is out of power, it makes good political sense to reconstruct the enemy as the Maoist, since everybody knows how dangerous and outlawed they are.

    Mamata’s McCarthyist paranoia now seems to extend its reach. She has charged that judgements from courts are “purchased”, that Commissions are useless and wasteful (just when the West Bengal Human Rights Commission has ordered her to compensate Professor Mahapatra and his neighbour, Subrata Sengupta, for the unlawful excesses vented on them, and asked for departmental action to be initiated against two police officers in the matter), and that civil society groups are a nuisance without accountability.

    These accusations seem to take in institutions dear to the urban middle class’s heart, and it will be interesting to see whether those that sought “poribortan” for West Bengal had precisely this sort of package in mind. Indeed, there is speculation that where it took the Bengali electorate some three decades to be disillusioned with the Left Front, three years may bring them to reconsider the choices they must make.

    Given the assertiveness of Indian democracy, it would seem that McCarthyism of any sort must have a small shelf life, regardless of who its patrons are — a lesson that the Left seems assiduously to want to learn during its exile from power.

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(Prof. Badri Raina is a Delhi-based writer.)

Courtesy: The Hindu

A Salary Plan That Changes Nothing

Should a husband pay his wife for domestic work

Maya John

Instead of asking a man to pay his wife for her domestic work, the state must create jobs for women outside the home in order to truly empower them

    Recently during a press conference called by the Ministry of Women and Child Development, the Minister of State (Independent Charge), Krishna Tirath, proposed the formulation of a bill through which a certain percentage of a husband’s salary would be compulsorily transferred to his wife’s bank account to compensate her for all the domestic work she performs for the family. According to the Minister, this percentage of husbands’ salaries would not be taxed and would provide women the much needed source of income to run the household better, and more importantly, to spend on her own, personal consumption. In a later clarification, the Minister identified this payment as an “honorarium” and not a salary which is to be paid to wives for all the services they otherwise render for free.

    This proposition has not gone down well, especially with women of higher income brackets who see such proposed action as unnecessary intervention in the realm of the private, i.e. the realm of familial relations. Many such women also believe that this government intervention amounts to reducing wives into “glorified maids” who need to be paid every time they walk into the kitchen, wash the baby, sweep the house, etc. Sadly, what is sidelined amid all the clamour and jokes about commercialisation of the mia-biwi relationship is the necessity of recognising the back-breaking work performed by women to sustain their families.

    Of course, what we also lose sight of is the sheer hollowness of such proposed legislation. For example, such legislation, if implemented, would not provide women a source of income which they earn independently of their husbands. Instead, women would continue to depend on their husband’s earnings and employment status, and thus, remain dependent on the family structure for their individual financial sustenance. Indeed, the problem with the proposed legislation is not that it is unnecessary and demeaning, but that it is informed by a poor understanding of economics surrounding household work and women’s labour in general. Clearly, the question then is whether the Indian state is even serious about uplifting the position of the woman within the home and in recognising her contribution to the national economy.

Historical issue

    Assigning an economic value to women’s domestic labour is a long-standing debate. The international women’s movement has continuously debated the question and reached many important conclusions. It is now time for the larger society to engage with the movement’s propositions seriously.

    First, as a society we must learn to accept that there is sheer drudgery involved in day-to-day household work. The fact that such work is performed by a woman for her husband and other family members in the name of “care” and “nurturing” cannot be used to conceal that this is a thankless job which the majority of women feel burdened by. Just because some women do not have to enter the kitchen every day since their maid does the needful, we cannot write-off the helplessness with which the average woman walks towards her kitchen hearth, every day without fail. Here, there is no retirement age, no holiday, and definitely, no concept of overtime.

    Second, we must realise that the process whereby women’s domestic labour has been rendered uneconomic activity, is a historical one. It was with the emergence of industrial society and the resulting separation between the home and the workplace that women’s housework lost value whereas men’s labour outside the home fetched wages.

    Third, as a society we must accept that while many are uncomfortable with providing an economic value to women’s domestic labour, chores such as washing, cleaning, cooking, child rearing, etc., are already assigned such a value by the market when need be. After all, many middle-class homes buy such services through the hiring of maids, paying for playschool education, crèche facilities, etc.

    Fourth, women’s domestic labour must be accounted for in the economy precisely because it is one of the contributing forces in the reproduction of labour power expended by this country’s working masses. In fact, because a woman’s domestic labour is devalued by the economy, a man’s wage can be kept low. For example, if all families were to pay every day for services like washing, cooking, cleaning, etc., because women of the household did not perform such duties, the breadwinners of each family would need to be paid higher wages so that they can afford to buy such services off the market.

The solution

    This being the reality surrounding women’s unpaid, domestic labour, where does the actual solution lie? Does it lie in redistributing limited family incomes between husband and wife, or, in redistributing the national income so as to enhance individual family incomes, and hence, the woman’s share within the improved family consumption? Importantly, while pressing for valuation of women’s domestic labour, the progressive women’s movement has always argued that if the value of unpaid housework is paid but does not add to or increase the total household income, such remuneration amounts to nothing.

    Hence, one of the most important conclusions reached on this question of unpaid domestic labour is that the state should pay for it, especially by providing women gainful employment, special funding, subsidised home appliances, free health care, etc. In this way, women would earn through an independent source of income and be freed of an overt dependence on the family structure for their consumption. There would also be a gradual undermining of the sexual division of labour which has resulted in women being tied to their homes and unable to do little else.

    Of course, what has not won much attention so far is the fact that the proposed legislation posits wages for housework rather than employment for women as a long-term solution. Indeed, questions have been raised whether the proposed legislation is implementable, but not whether it does the needful. For example, will the government be able to put in place the required administrative machinery? How exactly is the value of women’s household work to be calculated, or simply put, how many bais will equal a wife? Will the number of family members she rears determine whether she is entitled to greater compensation? And what of widowed women who do not have a husband’s salary to draw on?

Absolves the state

    However, implementation is far from the real problem with such legislation. Mechanisms can always be put in place if administrative sincerity prevails. The real problem with the Ministry’s endeavour is the rationale by which it is driven. The proposed legislation should be criticised because it absolves the Indian state of the responsibility it owes to women who contribute daily in sustaining the national economy. Indeed, if the proposed legislation is formulated and implemented, it will only result in undervaluing and underpaying women’s domestic labour.

    To elucidate, if we actually sit down to calculate the cost of all the different household chores a wife does for free, the figure would easily touch amounts that in no way can be compensated by a small percentage of the husband’s wages. Furthermore, with varied family incomes, such legislation would result in women being remunerated differently for the same kind and same amount of domestic work. In the case of the average working class or lower-middle class family where the total family income is anywhere between Rs.2,000 to Rs.10,000 per month, such legislation would assign women a pittance as an economic value for their back-breaking housework. This pittance will not empower the woman as the total family income remains the same. Without a growth in the actual family income, neither will such families be able to change their consumption pattern, nor will the nature of household work change so as to enable women to do other things instead of just labouring at home.

    Clearly then, the issue at stake is how to minimise housework for women so that they too can step out of the home to earn, to enhance family incomes and to have greater say in family as well as public matters. Greater employment generation for women by the state, and widespread introduction of facilities like crèches at all workplaces, subsidised home appliances, unhindered promotion post child birth/maternity leave, etc. are the need of the hour. While direct employment helps to create women who are financially independent, the provision of the latter helps women to remain in the labour market, despite starting a family.

    If the average woman is to be freed of the yoke of household drudgery then it is evidently the Indian state which has to pay by creating concrete conditions for her greater economic participation outside the home.

(Maya John is an activist and researcher based in Delhi University.)

Mexican Walmart Bribes

Wal-Mart Paid $24 Million In Bribes For Permits In Mexico

    According to a report published Saturday by the New York Times, Wal-Mart Stores Inc.’s largest foreign subsidiary, Wal-Mart de Mexico, informed senior executives at Wal-Mart back in 2005 of an elaborate bribery campaign orchestrated in order to obtain permits, licenses, and inspections throughout the country of Mexico in a widely successful attempt to ensure market dominance.

    The Mexican executive who blew the whistle on the whole ordeal was previously an attorney charged with obtaining construction permits for the company.  The lawyer said in e-mails and follow-up conversations that Wal-Mart de Mexico paid bribes on numerous occasions to obtain construction permits during a period of time when they were rushing to rapidly expand across the nation.

    Wal-Mart has grown to become Mexico’s largest private employer, employing 209,000 employees in Mexico.  One in five Wal-Mart stores is now in Mexico.

    The Times reported that it wasn’t until learning of its investigation that Wal-Mart decided that it was time to inform the United States Justice Department in December of 2011 that it had initiated an internal investigation into potential violations of the Foreign Corrupt Practices Act.  Under which law, it is illegal for United States corporations as well as their subsidiaries to bribe a foreign official.

The Bentonville, Arkansas, based company’s spokesman David Tovar issued a statement in which he said:

“If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.”  

    The NY Times investigation reportedly unveiled a long struggle at the highest levels of Wal-Mart.  The report indicated that the corporation had discovered evidence of a $24 million paper trail which was suspected to be bribery payments to foreign officials in Mexico.  At the time, the New York Times alleged that top Wal-Mart executives were more concerned with damage control than they were with exposing corruption within the corporation.

Bad Labour Practices of Walmart

Walmart Fined $4.8 Million For Failure To Pay Overtime

    It took an investigation by three separate divisions of the government to finally give Walmart a taste of its own medicine and although the fine is not even a blip on the company’s radar at last it sends a PR message to the megastore.   Treat your employees better!

    This Tuesday (May 1, 2012), the Department of Labor announced that Walmart agreed to pay $4.83 million in back wages and damages to employees it had illegally denied overtime.  The agreement follows a multi-year investigation into Walmart’s labor practices. More than 4,000 workers, all vision center managers or asset protection coordinators, will receive money from the settlement.

    Nancy J. Leppink, deputy administrator of the Labor Department’s wage and hour division, said in a statement released right after the agreement was announced,

“Thousands of employees will see money put back into their pockets that should have been there all along,”

    Add that to Walmart’s woes.  The company is being investigated by the Justice Department and Congress for bribing Mexican officials to open stores all over the country.

    All U.S. workers are entitled to overtime if they put in more than 40 hours a week, certain salaried managers are exempted form the laws.  Before 2007 Walmart considered its vision center managers and asset protection coordinators exempt. The Department of Labor called the mistake a misclassification.

    A Walmart spokesman said in an e-mailed statement,

“When the issues resolved today were initially raised, we took them seriously and fully cooperated with the Department of Labor to make sure they were corrected in 2007. We adjusted our pay practices at that time and determined that back wages should be paid for the associates involved. We have agreed on a fair settlement amount for the associates that trained for the role of Asset Protection Coordinator (APC) and associates in the role of Vision Center Manager (VCM), and we are pleased to have resolved this matter,”

    In 2008, the company agreed to pay as much as $640 million to settle 63 federal and state class actions suits.  The class actions alleged that Walmart systematically denied their employees overtime in order to profit

Retail Giant Walmart

Walmart Heirs Worth More Than Entire Bottom 40% of Americans

    Everyone knows that Walmart is huge, but just how huge is something we rarely think of.   But now we have some data to mull over.  The six heirs to the Walmart fortune are worth more than 40% of Americans combined.

    The Walton family, heirs to the Walmart fortune during a recent study were found to be worth a total of $89.5 billion dollars.  This sum is the amount that the bottom 41.5% of American families combined. That means that the six Walton families are worth more money than 48.8 million households in America.  The analysis was completed by Josh Bivens of the Economic Policy Institute.

    Sylvia Allegreto of the University of California at Berkeley had said last year that the Waltons were worth about the same as 30% of Americans but after the financial meltdown of 2008 more and more people, to save money, started going to Walmart in droves.  What makes the number so unbelievable and sad is that the majority of the more than 1 million workers at Walmart are part of that 40% of Americans the Waltons created.  Most jobs at Walmart are low paying hourly positions.

    Walmart not only pays low wages, but the economic impact of a Walmart coming to town can be catastrophic.  A planned Seattle-area Walmart could cost the area $14.5 million in lost wages over the next 20 years, a local advocacy group found in April.

    The uber rich like the Waltons have seen their wealth go up by more than 273% over the last 30 years while the bottom half of the spectrum has only seen their wealth grow by 20%.  According to the Congressional Budget Office. In addition, the top 10 percent of U.S. earners control two-thirds of the country’s wealth.

Capture of the State by a Small Coterie

A Case of State Capture

C. P. Chandrasekhar

    In a brazen display of authoritarianism, the politically illegitimate Manmohan Singh Government has announced, over two days (13th & 14th Sept, 2012), a set of controversial measures, varying from a hike in diesel and LPG prices to liberalisation of rules Governing foreign investment in the retail trade and in civil aviation and broadcasting. It has also announced its intention to launch a massive drive to disinvest equity in lucrative public sector corporations.

    The simultaneous announcement of this combination of policies flouts all democratic norms and is indicative of the capture of the state by a small coterie. It has been clear for some time now that there is little agreement across the political spectrum and within the UPA on the impact and advisability of such reforms. Hence, thus far the argument has been that measures such as these cannot be adopted till some consensus is achieved, if at all. Now in a cynical play of words a section of the Government, according to its Commerce Minister, has decided that there is indeed “consensus” on these policies even if no “unanimity”.

    The policies are ostensibly aimed at realising two objectives. The first is to reduce the fiscal deficit and release some funds for expenditures in support of private capital by heaping burdens on the working people and the poor, by cutting subsidies and engineering inflation. The second is to offer big capital new avenues for profiteering (as in the retail trade) or ways of recouping losses resulting from irrational behaviour (as in civil aviation), by allowing acquisition of assets in sensitive sectors by global players. This way of incentivising foreign and domestic investment through policies that redistribute income in favour of big capital and erode national sovereignty and policy space would, it is argued, trigger private investor interest and investment in a sluggish economy. However, the real intention seems to be to appease foreign financial and corporate interests. This was clear from the statement of the Deputy Chairman of the Planning Commission that this neoliberal thrust is needed to improve the ratings India receives from foreign rating agencies.

    What needs to be noted is that while these measures may set off a temporary speculative boom and deliver profits to capital, especially foreign finance capital, they would not do much to spur growth or stall the effects of the intensifying global crisis on India and would definitely worsen the position of the millions who still suffer from the worst forms of deprivation. The policies on diesel and LPG prices and other measures relating to subsidies would also stoke the already high levels of inflation in the country. The UPA Government seems hell bent on engineering stagflation.

    Since this is suicidal for the Congress that leads the UPA as well, the behaviour of the Government, to say the least is bizarre and inexplicable. The only explanation is that it has been captured by a coterie that permits profiteering through legal and illegal means and concentrates on appeasing foreign finance and favouring big capital, domestic and foreign.

The writer is currently Professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.