Innovate! India! Innovate!

Given the recent state of politics in the country; revolving around FDI and Capitalist takeover by the corporates which would facilitate the exploitation of our material and human resources it becomes essential for us to investigate the feasibility of capitalism which is essentially a Western proposition and its applicability in the Indian context which is known to be very diverse.

India is a country where 70% of the population directly or indirectly are dependent on agriculture. With the rapid industrialization after the Neo-Liberal reforms were enforced, it cannot be denied that India is going through a phase of Agrarian Transition. But the reality is not so beautiful, which is evident from the widespread farmer suicides especially in the states of Andhra Pradesh and Maharashtra. 

The subsidies that the developed countries are giving to their farmers are enabling the farmers of those countries to sell their produce at cheaper prices than the Indian counterparts mainly because our government is not in a position to afford such subsidies. And because the Neo-Liberal reforms were enforced on India due to the ‘Balance of Payment’ crisis, these developed nations have free access to Indian Markets to sell their products without price regulation, the Indian farmers are suffering.

For general interest, it is very essential to discuss the Balance of Payment crisis whereby the Developed nations used the IMF and WTO to put forward an agreement to liberalize the Indian economy. India was forced to sign the agreement because India did not have enough foreign currency to run its trade for even 3 weeks. It was at this time that India had to borrow $600 million by pledging its gold (67 tons in total).  India never wanted capitalism; it was forced to adopt it, to obtain free access to Indian markets. Indian markets still have the potential for growth as they are not saturated like the Western markets. The Indian market also has very high customer purchase power.

Agriculture is a risky proposition in India, with the risk of the failure of crops, the ever-growing migration from rural to urban areas, the ever-growing Human Population or resources, as could be said, has fuelled the growth of the corporates. Import substitution and closed economy when they were in force in the pre-liberalization era brought about prosperity but the privatization at the present point in time becomes essential to sustain the GDP.

If not for the corporates, the result of the neo-liberal economy, the skilled and unskilled labor which is being generated at the present rate, would find it difficult to find employment. With unemployment rates hovering at around 9% already, it is well poised to increase without the growth of the Private sector.  This may, in fact, lead to a situation existent in countries like Greece and Spain and that’s Europe we are talking about, given the case in India there will be total civil war. So, closing the economy at the present point in time is not an option. A Communist ideal therefore for the economy of India is also a dangerous proposition.

If India violates the agreement made with the IMF and WTO, which are dominated by the Western powers, there might be sanctions that the nation might have to face which is not an option which may further aggravate the situation.

The solution to this entire dilemma starts with the problem that Indian industries are more service-oriented like Infosys and TCS among others, these companies work for their American counterparts which generate a lot more profit than these Indian companies even though they are bigger organizations and that is definitely Colonialism 2.0 altogether. And because they are service industries the associated risks are much higher due to higher fixed liability in terms of employee management. Indian companies are not engaged in innovation and have very less spending on R&D. If Microsoft and Infosys are compared which were started at a similar time, the failure of the Indian corporates is very much evident. To be able to sustain Indian Corporates need to innovate.  Innovation! That is the only solution.