By Krishna Jha
There is shift in the basics and when the basics change, superstructure also faces change. In a capitalist society, production process is based on the employer and the working class. One regulates the production process, which involves investment, which is scientifically called capital. This capital is the result of surplus production, a fact discovered by Marx while he was trying to formulate the main pillar of his theory, the political economy. Surplus is produced only when the worker slogs more than what s/he gets in return as compensation for his toil. This extra is called surplus that turns into capital in a capitalist society, its life source. As the society evolves, the character of capital also blossoms up, turning into finance capital. There is merger of banking and industrial capital. There is hardly any investment. The entire concentration is on financialisation of economy.
Today we observe the same features that two centuries back, when the society was entering the state of capitalism, there was the finance capital not far behind. With the evolution of capital, finance capital was also trying to gain roots. The dialectical process was underlined by the greatest theoretician of the modern period, and that was Karl Marx.
Today at every step, the old features are coming back with new significance. In the name of monetization, public sector is getting decentralized and private masters are ruling the roost. The revenue earned is going into their hands while the tax payers who had invested in these units go empty handed. There is neither the compensation nor the employment. Production has taken the brunt, GDP has been going down, the agrarian sector that had registered some browny points is facing disaster as the three laws imposed by the government to facilitate the corporatisation process, stand to destroy the present agrarian system along with the farmers.
Investment is the sector that becomes the early victim of financialisation. In our country, during the period in 2020-2021, according to RBI sources, private capital investment has remarkably declined. The process of decay started in 2019-20 itself when pandemic had struck. Surprisingly, that was also a period when the corporate sector had lavish gains, and unemployed migrant workers were walking thousands of kms to reach home, in search of jobs, shelter and food and got none. Only 220 private projects were cleared by banks and financial institutions, a record low that hardly served the starving. Those which were completed projects were very few and the average time taken to complete also got stretched, influencing the entire process adversely.
There was a time when the entire world was in the grip of “Melt down” in 2008-9, but in 2020-21, the decline has been even steeper. The cost of the projects also dropped from Rs 1,75,830 crore in 2019-20 to Rs 75,822 crore in 2020-21. So far as completion time of the projects is concerned, it has been stretched too far due to delay in the completion of bigger projects, that even faced greater disasters. A similar trend was visible in the days of economic crisis. Economy could not get over the trend of delay that continued even in 2014-15. Projects were even stalled, curtailed, or shelved. There was also exorbitant rise in time taken during the global economic crisis.
By 2017-18, there was a drop in sanctioning projects and hence very few reported completion. Thus financialisation moved fast as there were lesser initiatives toward investment. It had proved that process of evolution is blind. Along with the organized toilers, those engaged in unorganized sector, which comprises the larger share of the entire production process, stands destroyed. Millions of them are the victims of uncertain labour market in the country. The scanty openings of jobs, especially in projects that have managed their resources with difficulty, have turned the market exploitative. The wages received are not enough even for one individual. With less investment and less production, there is the hike in prices. In totality, life has become almost beyond survival. Also for the small, medium and micro level industrialists, it is fast decline. Except for few corporate houses, there are all other economic entities that face getting levelled down. Added to all this is absence of any social security. Each one deserves to be rescued. They all face change in the nature of work, duration of working hours, and then there is the overall uncertainty, as without investment, there is total closure of working units.
Till 2020, at least 72 per cent of the households had no regular wage or salaried income, 87.1 per cent in the rural areas and 56.9 per cent in the urban areas, according to the latest Periodic Labour Force Survey of 2019-20. Around 80 per cent of India’s labour force was employed in the informal sector at that time. There is also informality in the economy as the skill of the workers have been pushed into dustbin. They are engaged mostly in unskilled work and not considered as workers at all. They have no legal options.
It is the beginning of financialisation of economy with all its negativity. It demands a superstructure facilitative enough to run smooth. The days of disaster are here, and strategy to defeat it has to be drawn. (IPA Service)