A backlash in Kerala

A development vision that has set aside the objective of social justice and concentrated on making Kerala a private capital-friendly State takes a beating in the general elections.

in Thiruvananthapuram

AS luck would have it, the third anniversary of the Congress-led United Democratic Front (UDF) government in Kerala came within a week of its shocking electoral debacle.

In the elections to the 20 Lok Sabha seats held on May 10, the Congress failed to win even a single seat, the Indian Union Muslim League (IUML) lost one of its only two stronghold seats in north Kerala, one of the constituents of the Bharatiya Janata Party-led National Democratic Alliance won its first ever seat in the State and the Opposition Left Democratic Front (LDF) scored a historic 18-seat triumph. Chief Minister A.K. Antony, the man who led the UDF election campaign by embarking on a north-to-south election road show, the leader who authored the UDF's 100-seat (out of a total 140 seats) victory in the Assembly elections through a similar poll-eve journey, failed completely to catch the imagination of the people this time.

Yet, anniversaries normally are occasions for a State government to celebrate its `shining' achievements. But organising such a celebration on May 17, after the verdict blew on its face, would have been too embarrassing and the UDF government chose to ignore the occasion. While the Chief Minister spent the anniversary week in New Delhi for no apparent reason, his friends and foes in the State within and outside the party were busy discussing the future of an administration under him and the possibility of his stepping down or his removal from the post by the Congress high command. The only UDF politician still sparring was Antony's evergreen party foe K. Karunakaran.

Kerala had emphatically rejected Karunakaran's dynastic ambitions too. His children, Padmaja Venugopal, who sought a Lok Sabha seat from Mukundapuram and K. Muraleedharan, who had become the Electricity Minister recently in the hope of winning an Assembly byelection from Vadakkancherry, were defeated. Both got seats as part of an election-eve ceasefire formula worked out within the faction-ridden State Congress. Strangely, it was Karunakaran's children alone who were fully behind Antony after the Congress rout in the elections. Other party leaders were demanding a change in his style of functioning and policies or his removal from leadership.

APART from the aversion of the State's voters to the absurd factional power game within the State Congress and the alienation of the prominent minority communities from the UDF, there is a flip side to the stunning verdict against the Antony government in Kerala. It assumed office in May 2001 selling the dream of a drastic transformation of the State's economy through a categorical negation of the policies pursued by the previous Communist Party of India (Marxist)-led Left Democratic Front (LDF) government. But from its initial days in power, the inability of the Antony administration to rise up to this task and the impact of its new policies and reforms, implemented under the directive of international donor agencies or in the name of "unavoidable" policies of privatisation and liberalisation, began to alienate the people from the government.

In a State with the highest rate of unemployment in the country, the Antony government's first action was to declare a moratorium on new recruitments and creation of posts and to cut employee emoluments through a series of measures. The move virtually paralysed governance in its initial months in power when the State government employees' unions launched an indefinite strike to protest against the government decision.

Its flagship event to boost the sagging State economy, the Global Investor Meet (GIM) held in Kochi in January 2003, meant to throw the doors open for large-scale private investment in Kerala and which promised to bring in investments worth Rs.50,000 crores, proved to be hogwash. Kerala soon became a "graveyard of MoUs", the words of warning given by Congress leader Jairam Ramesh at the inauguration of the GIM. GIM also turned out to be a "confidence trick", "a mela of vested interests detrimental to the State's development interests", as Opposition Leader V.S. Achuthanandan described it later. In the days that followed, the Opposition could effectively put the UDF in the dock for big-time corruption and for trying to sell off public resources including government land, buildings, sea-sand and water from the State's rivers.

In three years, the economic policies of the UDF government proved to be the curse of the underprivileged sections of society, including Kerala's 10 million farmers and agricultural workers, lakhs of labourers who lost their jobs in the traditional and plantation sectors, struggling under the weight of falling prices and wages and neo-liberal policies. The State's employment situation remained bleak with the government failing to create sufficient number of permanent job opportunities. The new policy of pampering investors and providing concessions to them came unstuck, and also proved costly in social and environmental terms. In three years, the gap between the haves and have-nots in the State widened and the new thrust towards privatisation of education and health sectors began to affect even its acclaimed human development achievements. The rights of labour, achieved through long years of struggle, too were undermined.

Perhaps the State's small farmers were the worst affected lot. Removal of quantitative restrictions on imports resulted in a drastic fall in the prices of agricultural commodities. The withdrawal of input subsidies and low investment in infrastructure had serious consequences for Kerala's farmers, mostly committed to perennial crops and hence at the mercy of the highly volatile international markets. The State, which has a substantial share in the plantation crops of rubber, tea, coffee and cardamom, with nearly 14 lakh families dependent on them, has been facing the threat of unbridled inflow of these commodities as a result of the removal of import restrictions under the World Trade Organisation (WTO) regime.

The government could hardly do anything to help the farmers when, as the Lok Sabha elections neared, Kerala reeled under the worst drought it had faced in recent times. All over the State, farmers, affected by the sharp fall in income and spiralling debt burden, demanded relief and support. But the Antony government failed even to ensure that the State received its due share of irrigation water under the inter-State agreements on sharing river waters. Nearly 30 farmers committed suicide all over the State in the two months just before the elections. When the government finally announced some relief, as elections came close, it was described as "too little, too late" by the farmers.

THE Antony government could not offer solace to the 40 lakh workers employed in the traditional sector. For example, in the coir sector, the nearly four lakh workers, about 75 per cent of them women, were pushed further into poverty though the sector itself was growing, with increasing global demand for natural fibres. In the cashew sector, liberalisation policies have been instrumental in destroying labour unity and rights attained through years of struggle. In the first 35 months of the Antony government, according to Opposition leaders, the 30,000 workers in the public sector Cashew Development Corporation were provided work for a mere 17 days. Government investment in the handloom sector fell sharply, thereby gradually destroying its ability to compete in the international market. In the fisheries sector, which has the largest section of people living in poverty after those in the tribal areas, the export-oriented policies of the State and Central governments, the permission granted to foreign trawlers for deep sea fishing, the reduction in the quantity of kerosene supplied through the public distribution system (PDS), the fall in fish catch because of extensive environmental damage and the rise in cost of fishing have increased the woes of fisherfolk.

Of the 59 public sector industrial units wholly owned by the State government, nearly a dozen are inactive, liquidation proceedings have been initiated in five and 56 have been categorised as loss-making. Kerala has one of the largest number of sick units in the registered small scale sector. In the Kerala State Electricity Board and the Kerala State Road Transport Corporation, the public sector enterprises employing the largest workforce in the State, employee resentment was growing owing to privatisation policies. Water and power tariffs were hiked and the government was slowly withdrawing from the responsibility of providing drinking water in many local bodies.

Since the UDF government came to power, electricity tariff was increased three times, causing much resentment and protest. Against its promise of increasing electricity production by 1,200 MW, a mere 12.5 MW was produced additionally. The State has also seen a reduction in welfare investment and the rise of the private sector in key areas of health and education. Service charges and fee for education, especially in the mushrooming self-financing education sector, took education beyond the reach of the common people. New guidelines for assessing poverty removed a large disadvantaged section of the State's population from several government programmes, the rationing system and concessional medical and educational facilities. One of the most effective PDS in the country was thoroughly weakened after the introduction of targeted PDS and new norms for assessing `poverty'. Currently, the PDS prices and open market prices of basic foodgrain and fuel are almost equal. This is a significant blow to Kerala, which imports more than 70 per cent of its foodgrain from other States and where 97 per cent of the population is covered by the PDS.

But like other southern State governments, the Antony government too chose to ignore or could not respond properly to the widespread concerns expressed on these counts and others and stuck to its view that the mechanism of growth was powered by privatisation and liberalisation and that social justice was perhaps an objective that could be achieved separately. It had an apologetic rationale for organising the GIM as it had for seeking financial assistance from the Asian Development Bank (ADB) under conditionalities that were criticised by the Opposition parties as being "anti-poor and serving the interests of the local elite and transnational players at the cost of local labour, capacity, resources and industry".

During the early days of his government, still enjoying the euphoria of the 100-seat victory in 2001, Antony had declared: "The government is helpless. It has no money. Government revenue is not enough even to meet its own expenditure or pay the salaries of government employees. The government can no longer be a big employment agency. It will be a disservice to the people if the government continues to cling to the old and resist change. Kerala has no other go but to seek private investment like the other States. Until now Kerala has failed to find itself a place in the list of investment destinations in south India, which are attractive to domestic or foreign private capital. This situation has to change. The government has to become a catalyst that encourages private capital, to prevent Kerala from continuing to be the State with the largest number of educated unemployed in India."

The results of the Lok Sabha elections in Kerala is as much a vote against the state of affairs in the State Congress and the ruling UDF as it is against Antony and his government which failed so comprehensively to deliver. The victories of the LDF candidates in constituencies comprising the Wayanad and Idukki districts where the crisis in the farm and plantation sectors has been acutely felt, in Chirayinkeezhu and Kollam, known for their traditional industries, and in the Ernakulam industrial district can be attributed to this. No wonder, the argument of the LDF that higher economic growth can be achieved only through an activation of the productive capacities and demands of the poorer sections of the population, especially in the rural areas, and that this requires egalitarian redistribution of assets, seems an attractive agenda in the State.