SACW #2 | 2 Jul 2004 [India: Economy / Reforms / People]

[Harsh Kapoor]

South Asia Citizens Wire  - Dispatch #2  |  2 July,  2004
via:  www.sacw.net

[1]  Humane Mask - Full of reform buffs, the 
government is unlikely to address inequality 
(Ashok Mitra)
[2]   Jai Kisan! not Jai Jawan, Jai Kisan!  (Aseem Shrivastava)
[3]  Will Congress rule slow down reforms? (Kamal Munir)
[4]   An Open Letter To The Finance Minister  (Vandana Shiva)
[5]  Andhra Pradesh: Beyond Media Images (K Balagopal)


--------------

[1]


The Telegraph
June 29, 2004

HUMANE MASK
- Full of reform buffs, the government is unlikely to address inequality
Ashok Mitra
Who is afraid of the common minimum programme? 
Certainly not the Washington Consensus put 
together by the World Bank and the International 
Monetary Fund. For it, the personalities crammed 
in the package of prime minister-finance 
minister-deputy chairman of the Planning 
Commission constitute a dream team. For pushing 
ahead with economic "reforms", the three 
gentlemen have impeccable credentials. They have 
not lost any time to disclose these credentials. 
The wellbeing of the financial market, they have 
gone on record, will receive their highest 
priority. Privatization and disinvestment will 
continue; minor irritants will be ignored. The 
nonsense of subsidy for the poor will be 
dispensed with, but not subsidy for the rich, the 
principle of which is mirrored so dazzlingly by 
the Central Electricity Act, 2003. While the new 
government is deeply worried over the increase of 
the "food subsidy burden", the CMP's anxiety to 
"unleash the creative energies of our 
entrepreneurs" is a one hundred per cent echo of 
July 1991.

So what, some will say; has not the CMP pledged 
that the reforms henceforth will bear a "human 
face"? One or two chief ministers with alleged 
links to the left are bowled over. It would be 
sheer cruelty to inform them that the expression 
"development with a human face" is a patent owned 
by the World Bank. Thirty years ago, it had come 
out with a publication, Redistribution With 
Growth, a pristine example, if there was one, of 
pretended self-flagellation: so sorry, the 
measures we recommended had caused regrettable 
inequalities here and there; the bank would now 
make amends. Since then, the World Bank and its 
sister institutions have continued to discover 
poverty in this far-flung world; their 
poverty-enhancing measures, otherwise known as 
economic reforms, have not been under any 
restraint either.

The new government, overfull with reforms buffs 
has, in World Bank-esque contrition, admitted 
that reforms till now have aggravated social and 
economic inequalities in the country. It has 
promised, again a la Fund-Bank, to do something 
about it.To begin with, it has decided to address 
the problem of rural poverty by doubling bank 
credit to the agricultural sector in the course 
of the next three years.

Whom are these gentlemen fooling? Doubling farm 
credit will not necessarily reduce poverty; it 
could actually increase landlessness and rural 
misery. Rich farmers might avail of the 
additional credit to buy up smallholders, who 
would be thrown to the wolves. Some obvious 
measures, essential for stemming further 
immiserization in the countryside, should have 
been, but are not, listed in the CMP. These are, 
for instance, (a) increasing several-fold public 
investment in agriculture, including in 
irrigation, land reforms and rural 
infrastructures; (b) invoking Article 18B of the 
World Trade Organization treaty and asserting the 
nation's right to enforce quantitative and other 
restrictions on agricultural imports; (c) giving 
directives, through the instrumentalities of the 
Finance and Planning Commissions, for 
wide-ranging land reforms; and (d) ensuring 
supply of power, fertilizer and seeds to small 
farmers and sharecroppers at subsidized rates. 
But, then, such suggestions are likely to 
scandalize the "reformers".

The budget is round the corner. There is though 
hardly any mention in the CMP of the sombre truth 
that, in order to re-situate India on the growth 
path and, at the same time, generate adequate 
employment in the system, public investment, not 
just in agriculture but in industry and 
infrastructure too, must go up several times. The 
Bank-Fund obsession with fiscal deficit will, 
however, frown at any talk of augmented public 
expenditure, and the new government, for dear 
life, has to be on the right side of the 
Washington institutions.

Attaining the target of an 8 per cent annual rate 
of growth in gross domestic product is a cliché 
everybody loves to iterate and reiterate. The CMP 
is no exception. Few however seem to be 
interested in analysing the morphology of such a 
rate of growth. At the theoretical level, an 8 
per cent growth for the economy as a whole is 
conceivable, even with zero growth in both 
agriculture and industry, in case, the services 
sector grows, say, at the rate of 16 per cent. As 
the experience of the past decade-and-a-half 
reveals, a spurt of growth in the services sector 
might however lead not to an increase, but a net 
diminution, in employment. A pattern of growth 
which concentrates exclusively on overall GDP 
growth, but does not care where or how it takes 
place, could render uneven the distribution of 
national income and assets even further; it will, 
alas, have no worthwhile "human face" about it.

The 2004 electoral verdict has been against 
communalizing the polity and against mindless 
economic reforms which do not advance, but in 
effect reduce, overall social welfare. The 
verdict has yet another dimension: it has cut 
down to size the two major national parties. The 
emerging trend is glaringly clear: the regional 
parties are increasingly coming to the fore. In 
several states, the national parties have in fact 
obtained the relatively large number of seats 
they have because of the munificence of this or 
that regional party. Whether lotus-eaters in New 
Delhi realize it or not, the nation is moving 
towards a federal polity.

In the light of this development, it should have 
been one of the primary tasks of the CMP to lay 
out a blueprint for a thoroughgoing 
re-structuring of Centre-state relations, 
including a probe into the reasons why the 
recommendations of the Sarkaria Commission, made 
nearly two decades ago, have remained a dead 
letter. No concrete measures to correct the 
existing imbalances, including fiscal imbalances, 
between the Centre and the states are proposed by 
the CMP. Instead, it talks of yet another 
commission, the best possible device to bury the 
problem.

Etching the economic contours of a federal 
republic is not part of its agenda; on the 
contrary, the CMP plunges in the reverse 
direction. It has pledged the speedy introduction 
of a uniform value added tax for the entire 
country. There is seemingly little awareness that 
the VAT as proposed is a substitution, lock, 
stock and barrel, of sales taxation, the 
principal revenue-raising source of the state 
governments. Despite their current precarious 
financial position, the states are being asked to 
surrender their major revenue-raising instrument 
and thereby become totally dependent on the 
Centre's mercy. This process of throttling the 
sales tax system is by no means going to be an 
afternoon's picnic. The subterfuge of moving an 
amendment to the existing sales tax legislation 
in the state assemblies will not do; the VAT is 
not just another version of the sales tax, it is 
a totally different kind of animal. To effect the 
crossover, an amendment to the Constitution would 
be called for. Kesavanand Bharati too could cast 
its shadow; questions might be raised over the 
legality if a constitutional amendment disturbs 
the basic structure of the Constitution.

Such issues will not go away. The new government 
will perhaps proceed nonchalantly despite 
objections raised by its constituents or others 
on this or that matter. It could proceed 
nonchalantly since the left have already made the 
commitment, come hell or high water, they will 
see to it that the regime lasts for five years. 
In that situation, whatever the government does, 
the left could only watch helplessly from the 
sidelines.

Who knows, the new government has presumably 
finetuned an arrangement for division of spoils. 
While the economic ministries will play to the 
tune of the mentors in Washington DC, the 
ministry of human resource development will throw 
freebies of secularism toward the direction of 
the radical crowd at home.

There will be, now and then, also some 
perfunctory talk of raising public expenditure on 
education and health to 6 per cent and 3 per cent 
of the GDP respectively. The government, as 
earnest of its anxiety to project a "human face", 
will agree in principle. Difficulties will 
however immediately rear their head: health and 
education are important, but defence and security 
compulsions cannot be wished away either. The 
left will be frozen by fear: the human face would 
be persuaded to hide itself for the present.

_____


[2]

www.sacw.net | 23 June 2004

Jai Kisan! not Jai Jawan, Jai Kisan!
by Aseem Shrivastava

URL: www.sacw.net/Nation/aseemJun23_2004.html

_____


[3]

Dawn
26 June 2004

Will Congress rule slow down reforms?

By Kamal Munir

Despite the hue and cry over the recent Indian 
election, and the endless rhetoric about the 
'fall of the fascists', it is quite incredible 
how little has actually changed in India. In this 
sense, the people of India, who have the 
thankless job of voting one government out only 
to get it back in a different guise, deserve our 
sympathy.

Take the votes for instance. Although Congress 
has increased its seats from 112 to 145, its 
share of the national vote has actually declined 
from 28.3 to 26.7 per cent. With 138 seats, the 
BJP, whose vote share declined from almost 24 per 
cent to 22 per cent, is only marginally smaller 
than Congress in the Lok Sabha. That this vote 
represents a massive backlash against the 
pro-free-market policies and an increasingly 
elitist stance of the BJP is agreed upon by all 
and sundry, including the BJP hardliners. That 
this is far from being a ringing endorsement of 
the Indian Congress Party (I) is equally clear 
from the numbers.

The story told by numbers is echoed by a 
qualitative assessment of the way Congress is 
likely to function in power. That Sonia Gandhi 
has declined the prime ministership, or Manmohan 
Singh has been put in charge of India's new 
government are issues of marginal importance. 
What matters is that the Congress is subject to 
pressures that are uncannily similar to those 
which influenced BJP policies.

On one hand of the Congress stands the Indian 
Left, which, given its highly 'pragmatic' 
approach to the market in the past can at most 
serve to delay rather than halt India's 
pro-market policies. On the other is the 
globalization imperative in the form of WTO 
regulations and the highly attractive lure of IT 
exports. The Indian left, with 62 seats, has a 
decisive influence on the policies of the 
Congress.

That they have declined ministerial posts and 
retained their independence only goes to their 
credit. But they lack a viable alternative. All 
they can do is drag their feet when the Congress 
begins to privatize what remains of the Indian 
state and altogether remove the door which the 
BJP opened.

That the Congress will do that is already clear, 
with Manmohan Singh declaring his intention to go 
with the state or the private sector, depending 
on which is more 'efficient.' Since efficiency 
was not why the world decided to put certain 
firms and sectors in state control in the first 
place, Singh's selected criterion reveals his 
intentions to continue with the IMF policy he 
implemented in 1991 in return for their loan.

India's tryst with globalization has developed a 
strong dynamic of its own. The Congress will find 
it difficult to resist it. The impressive success 
of the Indian IT sector, perhaps the leading 
beneficiary of liberalization, has served to 
produce a stark digital divide in the country. 
The vast majority of India's population finds 
itself locked out of this phenomenon. At least 40 
per cent of the population cannot even read or 
write.

The literacy in Andhra Pradesh, whose CEO 
Chandrababu Naidu served as the World Bank's 
poster child and was a regular invitee to Davos, 
for instance, is about 54 per cent. It also has 
the highest rate of economic suicides among 
farmers. The way Naidu was kicked out in the 
recent elections highlights the tension between 
the imperatives of globalization and the needs of 
the Indian people.

The IT sector, as well as many in the 
pharmaceutical sector in India, want to knock 
down the doors and embrace free trade. This has 
the potential of securing them lucrative western 
markets. The poor and illiterate, on the other 
hand, gain little or nothing from this and stand 
to lose substantially.

Take the small manufacturing sector. This group 
has lost profoundly to cheaper and better quality 
imports from China and other countries. 
Similarly, Indian agricultural industry has 
remained almost stagnant throughout BJP's tenure, 
with real incomes actually declining. What works 
for the knowledge-intensive industry, at least in 
the short-run, is bad news for the 
labour-intensive.

As much as Manmohan Singh wants to put a human 
face on India's development, his government will 
be subject to increasing pressures from outside 
to privatize key sectors such as education, 
health and infrastructure. These trends are 
evident in most developing countries, and in most 
places have led to increased disparity between 
classes.

Regulatory as well as normative pressures will 
make India conform to the new norms. With markets 
taking over such key sectors, the have-nots are 
likely to continue their lives in abject poverty, 
unless the government can somehow build the 
infrastructure or impart the skills they require 
to participate in the new economic order.

The hands of the Congress government will thus be 
tied. Any deviance from the globalization agenda 
will be punished by the markets. Those benefiting 
from access to foreign markets will also voice 
their resentment internally. Under the Congress, 
India is likely to continue the polarization 
trend that we witnessed under the BJP.

Interestingly, these pressures on the Congress 
government are almost a mirror image of those 
that the BJP government functioned under. The 
world worries about the resistance that the CPI 
(M) will offer to continuing reforms. In fact, 
the BJP faced similar pressures from within the 
party, although springing from entirely different 
motivations.

The BJP's erstwhile supporters include several 
groups, including small manufacturers, who have 
been adversely affected by globalization. Two 
other close allies (which, like the BJP sprang 
from the RSS and are part of the Sangh Pariwar) 
include the Swadeshi Jagaran Manch (SJM) and the 
Bharatiya Mazdoor Sangh (BMS).

These parties impeded BJP's pro-globalization 
policies at various points. The SJM's mandate is 
to block the multinationals from capturing the 
Indian market, while the BMS, India's largest 
trade union collective with approximately 6.5 
million members, is supposedly responsible for 
protecting the interests of industrial workers.

BJP's nationalist capitalist ideology before 
coming to power was closely aligned with the 
mandates of these parties. However, once in 
power, the imperatives of government and 
globalization forced the BJP to pursue a path 
that diverged from its siblings.

International investors need not worry. The 
Congress does not have any more retarding 
pressures on it than the BJP did. Since the 
policies furthered by the BJP were started by the 
Congress and Manmohan Singh, the reforms are 
likely to continue with alacrity.

But despite these reassuring signs, foreign 
investors worry that India is not as stable as 
they would like. They do not care whether it is 
the BJP or Congress in place as long as the 
pro-free-trade reforms continue. That the BJP 
passed draconian laws like the Prevention of 
Terrorism Act or that it was responsible for the 
massacre of thousands in Gujarat has never 
bothered the investors.

What worries them is that unlike many other 
countries which attract large amounts of foreign 
investment, India still has an active left, 
which, with the help of disaffected constituents, 
can theoretically put the brakes on the gravy 
train.

However, on that account too, they need not 
worry. The Indian Communist parties have shown 
great pragmatism in the past. As a Bloomberg 
columnist noted, when they aren't sloganeering, 
the Indian Marxists are a realistic bunch. The 
only Indian state where information-technology 
enabled services are labelled essential and 
therefore unable to go on strike is in West 
Bengal, which is ruled by a Communist party.

What is in the interest of foreign investors, as 
well as the Indian middle class is, however, not 
necessarily also in the interest of the vast 
majority of its population. Unfortunately, just 
as the pro-market policies are likely to 
continue, so is the plight of the common Indian.

While the pro-establishment think tanks like the 
New Delhi-based National Council for Applied 
Economic Research claim that by 2010, 84 per cent 
of India's households will earn more than $1,000 
a year (currently up to 35 per cent of the 
Indians live on under $365/year although the 
government gives a lower figure), this three-fold 
increase is highly unlikely. For these Indians to 
prosper, India's gains will have to become much 
more broad-based, which, without substantial 
government spending is not possible. And if 
Manmohan Singh's recent statements are anything 
to go by, that is not looking like a distinct 
possibility.

The writer teaches strategy and policy at Cambridge University, UK.

_____


[4]

Outlook Web | Jun 30, 2004    
COUNTERPOINT
An Open Letter To The Finance Minister
Asking banks to give more loans to solve the 
problem of suicides caused by indebtedness is 
like asking a neighbour to turn on their taps to 
solve the problem of a leaking water storage tank 
in your backyard.
VANDANA SHIVA
http://www.outlookindia.com/full.asp?fodname=20040630&fname=farmers&sid=1



______



[5]

The Economic and Political Weekly
June 12, 2004

Andhra Pradesh: Beyond Media Images

Y S Rajasekhara Reddy, the new chief minister has 
given the impression of being a man who cares for 
the classes neglected by Chandrababu Naidu's 
model of development. Whether that is really so, 
is extremely doubtful. That those classes have 
reposed trust in the Congress Party under his 
leadership is clear: the issues of irrigation and 
employment appear to have contributed to 
the defeat of the Telugu Desam Party, augmented 
by the desire for a separate state in the 
Telangana region. Having realised his debt to the 
dissatisfaction, the new chief minister has 
already promised heavy investment in major 
irrigation projects and free power to farmers. 
And as for Telangana, YSR has made no secret of 
the fact that he has neither any understanding of 
the cause nor any sympathy for it.

by K Balagopal

Chandrababu Naidu's defeat is the kind of event 
that lends itself so well to analysis by 
hindsight that the effort would be too tiresome. 
In any case, analysts attached to the Left 
parties have done that as ably as hindsight alone 
permits, and there is no need to add to their 
wisdom (by which it is not intended that they are 
altogether wrong). In fact, Naidu (or 'Babu' as 
he is known to his admirers in the state) is a 
classic instance of a phenomenon that the west is 
probably already very familiar with, but we are 
only just waking up to: a pervasive media creates 
a celebrity out of almost nothing, and then calls 
in experts to explain why its creation turned out 
to be nothing. Chandrababu is merely an ambitious 
political schemer who has managed to con quite a 
lot of  intelligent people because he knows that 
their hunger for the image he has put on - a 
third world politician in the mould of a 
corporate executive spewing IT jargon and the 
verbiage of the World Bank's development policy 
prejudices - is too acute for the normal 
functioning of their other senses.

This is an effort, in part, to introduce his 
successor. For if someone does not do so now, a 
new myth could soon be in the making, and if the 
analysts of Left parties participate in its 
creation, as a homage to coalition politics, one 
may have to spend a lot of time disabusing the 
public of it. It is so easy to clothe Y S 
Rajasekhara Reddy, MBBS with the image of the 
good doctor who has turned to politics to cure 
society, that even without the help of such 
expertise, the media may itself involuntarily do 
so. Reforms with a human face, which appears to 
be the current slogan of the Congress, suits the 
image so well.

The man is anything but a vendor of humane 
visages. His rise in politics has been 
accompanied by more bloodshed than that of any 
other politician in this state. Not bloodshed for 
some avowed 'higher cause', but bloodshed for the 
narrowest possible cause: the rise of one 
individual to political power and prominence. The 
recent elections may very well have meant many 
things in terms of popular aspirations, and one 
has no desire to be cynical on that score. But in 
the matter of the change of helmsmen, it has 
merely replaced a man who would find nothing too 
crooked if it is in his political interest, with 
one who would find nothing too brutal. And for 
both, the goal is the same: Power. Such precisely 
are the men neo-liberalism wishes to find in 
power in countries such as ours which it wants to 
subordinate to its logic and interests. It would 
be imprudent to regard this as an irrelevant 
consideration on the ground of the Congress 
Party's avowal of a 'human face', for firstly 
that expression has no precise meaning, secondly 
Congressmen are known to be capable of changing 
course mid-stream, and thirdly India's rulers 
irrespective of party have knowingly put 
themselves in a position where they have little 
leeway in matters of policy.

YSR (as he is known in short) belongs to Cuddapah 
district of the Rayalaseema region of the state. 
His constituency, Pulivendula, exhibits a most 
distressing topography: endless stretches of nude 
soil studded with gravel and relieved by rocks 
that are even more bare. It is watered, using the 
expression figuratively, by the Chitravati, a 
tributary of the Penna (called Pennair in most 
maps), itself hardly a river worth the name. 
Today YSR wishes to be seen as a politician who 
has responded to the needs of farmers and is 
determined to do well by them, but in the nearly 
three decades of his political life, he has not 
been instrumental in adding one acre of assured 
irrigation to the parched lands of the 
constituency that has again and again returned 
him or his brother (when YSR chose to go to 
parliament instead) to the state sssembly.

His father Raja Reddy was, to begin with, an 
ordinary farmer and a small time civil 
contractor. He got converted to Christianity in 
the days when even upper castes thought there may 
be material benefit in doing so, and was 
ostracised by the Reddys of his native village, 
Balapanur. He shifted to Pulivendula, the tahsil 
head-quarters. He quickly made a name for himself 
as a rough and violent man with whom one had 
better not get into a quarrel. To understand how 
Raja Reddy took advantage of that and paved the 
way for his son's rise in politics, one must know 
something about Rayalaseema.

Viewing Rayalaseema

The Rayalaseema districts of Andhra Pradesh are 
known for severe water-scarcity. Though as a 
matter of convention the four districts of 
Anantapur, Cuddapah, Kurnool and Chittoor are 
said to comprise the region, in physical, social 
and historical terms, only the Madanapalle 
division of Chittoor district can be talked of in 
the company of the other three. The rest of 
Chittoor is in every sense, including average 
rainfall precipitation, a distinct entity. The 
other three districts have an average annual 
rainfall of 618 mm, which is among the lowest in 
the country. They lie in the basins of the 
Tungabhadra and Penna rivers, which popular 
memory associates with bounteous waters once upon 
a time, but are today mere apologies of streams. 
The catchment of these rivers gives only a 
moderate yield, much of which has already been 
dammed, rendering the river-beds dry along most 
of the length of the rivers. But the canals from 
the dams serve only about 4 per cent of the 
cultivable land in the districts.

The major irrigation source of Rayalaseema, 
however, used to be the excellent system of tanks 
constructed by the Rayas of Vijayanagar, from 
whom the region gets its name. Like the rulers of 
Hyderabad and Warangal to the north, the Rayas of 
Vijayanagar got constructed a system of tanks all 
over the region to husband the scarce water 
resources and channel them to the fields. Indeed, 
most of the kings who ruled the various parts of 
the Deccan, and not merely the Telugu country, 
built such tanks to provide water for drinking 
and irrigation to the populace. A characteristic 
of the irrigation tanks of Rayalaseema is their 
huge size, probably because rainfall there is 
even more scarce, and demands even more 
comprehensive husbanding of water than elsewhere 
in the Deccan.

This tank system, as indeed everywhere in the 
Deccan, is however in a shambles, now. Almost 
nothing has been done for their upkeep during the 
last several decades. Because of the denudation 
of the land around, even the slightest rainfall 
causes inrush of water into the tanks, breaching 
the poorly maintained bund. The breaches merit 
only the most cosmetic of repairs, and as a 
result, the tank bunds are but bundles of 
ill-repaired breaches. For the same reason, all 
the tanks are heavily silted, so heavily indeed 
that they look more like irregular-shaped 
football fields than irrigation tanks. In the 
days before chemical fertilisers, the silt was 
prized by farmers as a source of fertile topsoil, 
but now nobody is interested in taking the silt 
to fertilise their fields, and so de-silting, if 
it is to be done comprehensively, would be akin 
to a mass waste-removal exercise. As such, it is 
too costly for the funds governments are willing 
to spare for the upkeep of traditional irrigation 
systems.

The upshot is reliance on increasing use of 
groundwater, through deeper and deeper borewells. 
But this is a self-destructive game, for the 
deeper farmers dig wells in competition with each 
other, the deeper they will have to dig next time 
round. The scarce rainfall cannot sustain this 
technology-driven thirst for groundwater. In 
2002, in the midst of the second successive year 
of drought, a middle class farmer of YSR's 
Cuddapah district had dug a borewell 1,000 feet 
deep, and still did not find water. ("If only I 
had persevered a little more, I may have struck 
oil" was, however, the farmer's only response to 
commiseration, for a sense of humour rarely 
forsakes farmers, even in the worst of 
adversities).

Violence-Prone Society

A harsh physical environment does not necessarily 
lead to a harsh social life - there is no such 
homology - but the peculiar history of 
Rayalaseema combined with the region's scanty 
endowment has led to a violence-ridden society. 
The kingdom of the rayas was characterised by 
devolution of the power of administration, more 
particularly that of 'law and order', down to the 
lowest level. This was even more true of the 
border areas which were administered by men whom 
the British Gazetteers called polegars 
('palegadu' in Telugu and 'palayakkaran' in 
Tamil). They (often) had small forts, and an 
armed retinue of men, with whose help they 
maintained order and assisted the collection of 
revenue. Except in the most well-administered 
periods, these men were not bound by any known 
rules of conduct, not to speak of anything 
resembling law. They behaved like - and in fact 
were - war-lords. With the fall of the 
Vijayanagar empire most of them became sovereigns 
over a handful of villages and incessantly raided 
neighbouring domains for booty and territory. It 
is said - though there is no hard evidence in 
this regard - that the villagers caught in this 
conflict sought refuge with village strongmen who 
could gather a retinue behind them and play the 
role of protector. But of course, when they did 
so, the villagers had to pay for the protection 
by living in accordance with the protector's writ.

As the fall of the Vijayanagar empire was 
followed by conflict between the British Indian 
rulers and the rulers of Hyderabad and Mysore, 
much of which took place over the Rayalaseema 
districts, the warlords as well as any villager 
who could gather an armed group around him 
carried a double premium: the battling armies 
wooed them, and the local people too needed their 
help to protect them against the marauding 
soldiers from outside the region. At the end, by 
the time the British brought the entire region 
into their control by the beginning of the 19th 
century, there was left this residue of a social 
practice: men of the dominant sections would 
gather an armed gang around them to assert their 
power, enforce their writ in the village and 
fight off challengers to their power over 
society. While the polegars were mostly of 
non-cultivating communities such as boya and 
patra, the practice of establishing dominance and 
exercising power through the force of armed gangs 
became a characteristic feature of powerful 
landed communities, generically described as kapu 
(husbandsman) but mainly of the reddy caste in 
recent decades. The British, who successfully put 
an end to the polegars by a carrot-and-stick 
policy, found to their dismay that this residue 
continued to disturb their notion of rule of law. 
They christened these gangs 'village factions', a 
name that continues to be used to this day.

The typical village faction was that of the 
village headman, called reddy in Rayalaseema. 
That appellation today refers to a dominant caste 
which is present all over the state, and men of 
the caste tag on reddy behind their names. But 
that is a phenomenon of recent decades, more 
particularly the latter three-quarters of the 
20th century. The word has a complex history, one 
moment of which is that it designated the village 
headman in the Rayalaseema districts, in the days 
when village administration was presided over by 
the institution of hereditary headmen. This reddy 
would protect his primacy in the affairs of the 
village with the most aggressive zealousness. Any 
challenger to his importance would have to 
contend with a violent response from him. Though 
we spoke above of a retinue maintained by such 
strongmen, it was not a permanent gang maintained 
only for fighting. Most of the retinue would be 
ordinary farmers or labourers who come to the aid 
of the Reddy when called upon to do so. They 
would, it goes without saying, benefit in matters 
where the reddy had the final say, but passionate 
loyalty of the reddy's followers is a 
characteristic of village factions. Their 
attachment was never merely a matter of 
rational calculation.

The dominance of the reddy would often be 
challenged by someone in the village. He would 
invariably be either a big landowner, or an 
otherwise powerful man, e g, by virtue of his 
closeness to the ruler of the area. From about 
the time that the word reddy started signifying a 
caste and not just hereditary headmanship, it is 
seen that in most cases, the challenger is also a 
reddy by caste, though there have been important 
exceptions, especially where the militant boya 
community is numerous. That man would gather a 
group of villagers behind him and fight the group 
of the 'reddy'. The people to gather behind him 
would include, of course, his kith and kin, his 
tenants and sharecroppers; it would include 
persons who have suffered at the hands of the 
'reddy'; it would also include persons who have 
conflicts of interest or ego with the followers 
of the 'reddy'; it would even include people who 
are obliged to the challenger for their day to 
day life or livelihood, even to the extent of 
people who, by virtue of the village topography, 
have to pass by his house or fields to reach 
their own house or fields.

Once such a challenger emerges, or in the course 
of his emergence, street fights between the two 
groups break out at every conceivable instance. 
The slightest material interest of every member 
of the group has to be protected or realised by 
force, and the slightest injury to every ego has 
to be avenged by force. But everything turns 
around the primary interest: the leader's 
pre-eminence in the village, his honour, his 
writ, his word. For this, lives are sacrificed in 
a spiral of killings. Every death has to be 
avenged with a death, every burnt house or 
haystack with a burnt house or haystack, and 
every devastated acre of land with a devastated 
acre. The implements of fighting in the old days 
were stones, sticks, and every implement made by 
the human race for taming nature and making it 
yield fruit. It was after the 1950s that crude 
explosives, crude firearms and lately more 
sophisticated weapons entered village factions. 
It is an interesting aside that at each stage it 
was the communists that were, in all innocence, 
responsible for modernising the weaponry of 
faction fights.

The village factionist of yore, as can be 
imagined, was hardly an epitome of rationality. 
By the time he was through with his energies he 
would also be through with much of the property 
he had: it costs a lot to fight court cases, look 
after injured followers, repair burnt down 
dwellings and replace hacked orchards, all to 
keep his manly pride and moustaches intact. But 
after the introduction of panchayat raj democracy 
and rural development works, the brutality of 
village factions acquired the sheen of 
instrumental rationality. It was quickly realised 
by the village factionists that the methods used 
by them to protect the elusive social prominence 
or importance, could be put to more practical use 
for rigging polls and winning panchayat elections 
at the village or block level, and monopolising 
road and other public works contracts in the 
village. This started earnestly in the 1960s.

The next and natural step was for a leader to 
emerge from among the village factionists of an 
area or from a town nearby, who would gather 
support of all the powerful factionists of the 
area, create factionists to fight the 
recalcitrant, assist the faithful in defeating 
their rivals, protect their crimes and make it 
worth their while to indulge in crimes of 
violence on his account in addition to theirs, 
and make that the base of his rise in politics at 
the district level and beyond, and the guarantee 
of a monopoly of not small or local public works 
but substantial civil contracts. It took a new 
generation of men to see this possibility and 
realise it. YSR was one of the pioneers of this 
change, which  has terrorised and devastated the 
social and political life of the Rayalaseema 
districts.

Communists as Catalysts

The communists played a peculiar catalyst's role 
in all this. The undivided Communist Party of 
India (CPI) had some base in the Rayalaseema 
districts. Its leader Eswara Reddy was elected MP 
from Cuddapah on four occasions starting with the 
first parliament. It fought - or sought to fight 
- feudal domination in the villages, but had to 
contend with the culture of village factions. The 
communists, from that day to this, have 
unfortunately understood factionism as merely a 
rather violent form of feudal domination, which 
may only require a more violent response, and 
nothing more. That village factions divide all 
classes in the village vertically, from absentee 
landlords to the poorest labourers, which 
vertical division is accompanied by a degree of 
felt loyalty to the factionist at the top, 
thereby reproducing the animosity at the top all 
the way down the line, and that such a state of 
affairs is seen as the natural ordering of 
society by all classes, has never been adequately 
understood by them.

And so when the communists found it difficult to 
organise the masses to fight a feudal landlord, 
they encouraged and supported any upstart who was 
willing to challenge the landlord's dominance. 
All that they achieved was to create a new 
factionist, who would discard the communists once 
his purpose was done. Pulivendula was dominated 
in the early years after independence by 
Devireddy Nagi Reddy (known as D N Reddy), a 
somewhat haughty landlord, mill owner, some time 
zilla parishad chairman, and some time MP. YSR's 
father Raja Reddy was willing to take on 
D N Reddy, and the CPI assisted him by helping 
him to win the block level panchayat elections. 
Today, the CPI has all but left the district, but 
Raja Reddy's legacy continues in the form of his 
powerful son.

Raja Reddy established his credentials as a man 
to fear by an incident that people still talk of, 
nearly 50 years later. The town of Pulivendula 
has a sizable colony of Erukalas, a scheduled 
tribe, some of whom were known for their unruly 
ways. They were despised but feared by the higher 
castes, though it is rumoured that D N Reddy was 
not above using their crimes for his ends. One 
day one of them, Oosanna, tried to steal the 
ornaments worn by a woman of the reddy caste in 
the bazaar. When the woman struggled, that man 
cleverly exclaimed that she was his wife and was 
being disobedient. By the time people realised he 
was telling a lie, he had slipped away. Later in 
the day, Raja Reddy reportedly caught hold of 
Oosanna, dragged him to a public place, poured 
kerosene on him and burnt him alive. This 
incident made Raja Reddy a feared man, and people 
became willing to gather behind him in his 
conflicts with established leaders. By and by he 
established immense dominance in the area.

But he lacked money of the kind that would 
sustain his further rise in politics. This 
problem was resolved by a combination of chance 
and brutality just about the time that YSR 
entered politics. Cuddapah has deposits of the 
mineral barytes, which was once upon a time not a 
highly priced mineral. One of the mining leases 
was held by Venkatasubbaiah of the balija caste. 
Raja Reddy joined him as a junior 
partner/supervisor (it is not clear which), 
reportedly because Venkatasubbaiah believed he 
would be useful in controlling the workmen. Round 
about the mid-1970s, however, it was discovered 
that barytes has use in petroleum refining, and 
its price shot up. Raja Reddy wanted 
Venkatasubbaiah to hand over the mining lease to 
him and go. A prominent CPI leader and writer, 
Gajjela Malla Reddy, brokered a deal whereby 
Venkatasubbaiah would take Rs 11 lakh and leave 
the mining lease to Raja Reddy. Venkatasubbaiah 
refused, and was killed. The mining lease, passed 
into YSR's hands.

For many years in the later half of the 1980s and 
the early half of the 1990s, YSR's barytes mining 
operation was the subject of one scandal after 
another. Lease - or sub- lease, after barytes 
mining became formally the monopoly of the A P 
Mineral Development Corporation, only to be 
sub-leased to the same previous lessees - would 
be taken for a certain extent, but many times 
more land around would be mined. Even a piece of 
land on which stood a protected monument so 
notified by the Archaeological Survey of India 
was mined, and one and a half lakh tonnes of the 
mineral (priced at Rs 600 per tonne) was taken 
away by the time the government woke up and put a 
stop to it. And there was the case of a villager, 
Vivekanandam, whose private land of 1.8 acres was 
also sub-leased to YSR by the Corporation. Though 
that man went to court and obtained an injunction 
against the sub-lease, YSR continued with the 
mining and took away mineral worth Rs 5 crore. 
The maternal uncle of the said Vivekanandam, a 
retired government employee, Rajagopal, set out 
to Hyderabad, to express his protest to the then 
chief minister Janardhan Reddy, and to move the 
high court again. The old man was set upon by a 
gang in the middle of the state's capital, and 
had his hands and legs broken. This was as 
recently as 1992.

With the money flowing from the barytes mines in 
his pockets, YSR was in a position to undertake 
the transformation of 'village factions' into 
full-fledged instruments of political and 
economic domination at the highest level. There 
were others of his period - the post-emergency 
breed of educated, intelligent and utterly 
cynical politicians - who made money from other 
sources, such as for instance excise contracts, 
and used that wealth in the same manner as YSR to 
rise to prominence in Rayalaseema politics. The 
money was used to buy the support of village 
factionists. The factionist would be helped to 
overcome his rivals and establish unchallenged 
power over his area of operation. If a factionist 
was too adamant and did not heed the call, a 
rival would be funded to rise against him. A lot 
of lives would of course be lost in the process, 
but then that was, for these gentlemen, a matter 
of no moment. Once a sufficient monopoly of 
control over the local factionists was 
established, the leader's political-economic 
future was ensured. Elections would be concluded 
in his favour, and his muscle-power would ensure 
that he monopolised all the civil/excise 
contracts he coveted. This sounds bland when 
stated in this fashion, but the process involved 
tremendous amount of violence and inaugurated a 
veritable regime of terror in the area.

Manipulation of Election Process

Political parties and programmes have meant 
nothing in Rayalaseema, more particularly 
Cuddapah district. The only distinction in that 
district has been: with YSR and against YSR. 
Those who are with him can be in his party or in 
any other party - not excluding the CPI - and 
similarly those who are against him. On more than 
one occasion he has exhibited his capacity to 
ensure that a candidate to the assembly from his 
own party who has got a ticket against his will 
is defeated by a candidate of his choice 
contesting on a Telugu Desam ticket. Elections in 
Rayalaseema have meant open violence on polling 
day to scare away voters and leave the field open 
to bogus voting, taking away the ballot box to 
stuff it with ballot papers stamped elsewhere, 
preventing voters of the rival candidate from 
entering the polling station, forcing voters to 
show the stamped ballot paper to the local 
factionist's man before putting it in the box, 
and other acts of like nature.

Until recently, a rule followed by the Election 
Commission was that in the event of death of any 
candidate, the election would be postponed. 
Killing defenceless candidates to get the poll 
postponed is a method not unknown in the more 
violent parts of our country. Rayalaseema is no 
exception. In the assembly polls of 1989, YSR's 
follower Nagi Reddy fought the Telugu Desam's 
Palakondarayudu at Raychoti in Cuddapah district. 
In the parliament polls of 1985, Palakondarayudu, 
who was then a candidate for parliament, was 
unsure of the support of the two main local 
factions that ruled Raychoti town. So he is said 
to have got an independent candidate, Guvvala 
Subbarayudu killed and got the election 
postponed. He thus gained time to rope in the two 
factions, and succeeded in winning the election 
held later. In 1989, polls were held 
simultaneously for assembly and parliament. 
Palakondarayudu was this time a candidate for the 
assembly. Apprehensive that he may repeat his 
victorious performance, YSR's man Nagi Reddy set 
up a pliant man of their own faction, Avula Subba 
Reddy by name, as an independent candidate, and 
allegedly killed him the day before the election 
to get the election to the assembly postponed. It 
is inconceivable that this could have happened 
without the knowledge and consent of YSR. In the 
parliament poll that took place that day as 
scheduled, there was an orgy of violence in which 
five persons were killed in Raychoti town 
including a polling officer by name Ahmedullah. 
The polling officer was dragged out of the 
polling station and murdered. The Congress 
candidate was elected to parliament. The terror 
created by YSR's group on that day was sufficient 
for his candidate Nagi Reddy to carry the day 
when the assembly poll for the postponed Raychoti 
segment was later held.

Parallel with establishing themselves in power by 
such means, these leaders set themselves up as 
representatives of the region who would fight the 
rulers of the state for justice to water-scarce 
Rayalaseema. It has been the tragedy of 
Rayalaseema that, unlike Telangana for instance 
which has a vibrant political climate that throws 
up activists close to the people, the same 
leaders who have devastated the region's social 
and political life with their strategies of gang 
warfare have time and again doubled as saviours 
of the people. But as their interest is merely 
the furtherance of their political careers, such 
espousal is short-lived and fruitless.

For about three to four years in the early part 
of the 1980s, these leaders led major agitations 
for irrigation water to the region. They held 
lengthy 'padayatras' and boisterous protest 
meetings. YSR was among those in the forefront. 
But their interest tapered off once they 
succeeded in putting pressure upon N T Rama Rao 
to sanction the extension of the Telugu Ganga 
project to provide irrigation water to parts of 
Cuddapah district. Later, the Congress came to 
power in the state, and many of the agitators 
became ministers, but they did precious little 
for the irrigation needs they had agitated for. 
Subsequently the Telugu Desam Party came back to 
power again, but this time YSR took care not to 
be seen agitating for the rights of one region. 
He had aimed his sights higher. He would dislodge 
Chandrababu and become chief minister of the 
state. Power, and power alone has been his 
guiding light, at each stage of his career, much 
like Chandrababu. Given the peculiar nature of 
Rayalaseema society, brute force served YSR's 
purpose in the initial stages, much as 
unscrupulous manipulation did in Chandrababu's 
case. But once he set his sights on Hyderabad, he 
knew that other methods would have to be tried 
out, and he has been game for that.

He worked quite systematically towards this end 
and has succeeded. In the process he has given 
the impression of being a man who cares for the 
classes neglected by Chandrababu's model of 
development. Whether that is really so is, to put 
it politely, extremely doubtful. That those 
classes have reposed trust in the Congress Party 
under his leadership is clear: all analysis as 
well as impressionistic views point to the issues 
of irrigation and employment as central to the 
defeat of the Telugu Desam Party, augmented by 
the desire for a separate state in the Telangana 
region. Economists too are agreed that poor 
growth of employment opportunities, and poor 
capital formation in agriculture, the latter 
mainly because of low public investment, are two 
among the negative characteristics of the Indian 
economy's performance in recent years. Too 
categorical an analysis of voters' preferences is 
a risky business, but it appears reasonable to 
suppose that the dissatisfaction generated by 
these factors lies behind the victory of the 
Congress. YSR realised it in the course of his 
pre-election padayatra which brought him face to 
face with much dissatisfaction regarding issues 
on which - barring free power to farmers - he had 
never taken any stand till then. Having realised 
his debt to the dissatisfaction, he has already 
gone on record promising heavy investment in 
major irrigation projects, and free power to 
farmers, which will encourage private investment 
to the same end. If he has not issued any 
immediate policy statements in the matter of 
employment, that will be declared to be 
understandable because it is by no means an easy 
matter. And as for Telangana, YSR has made no 
secret of the fact that he has neither any 
understanding of nor sympathy for that cause.

But it is doubtful that he has any real 
convictions in regard to the first two issues 
too, other than the realisation that they have 
been useful instruments in his ascension to 
power. If freedom to all prisoners were to serve 
that purpose, he would equally readily have 
emptied all the state's jails, without holding 
any philosophy of punishment commensurate with 
the act. These may appear to be points not worth 
labouring at length, and it may even be cleverly 
said, as the Hindi saying goes, that we are 
concerned that the fruit be a mango, and not that 
the tree be a mango tree.

But if correcting economic policy distortions is 
what the aspirations revealed by the elections 
are about, we must note that change in irrigation 
policy from Chandrababu's exclusive espousal of 
drip irrigation to a more realistic programme is 
not sufficient by itself. Such change is not by 
itself inimical to the ruling policies being 
prescribed in the name of reforms. The whole 
gamut of the policies concerning resources, 
opportunities and governmental responsibilities 
will have to be addressed, even if they have not 
been voted about in bringing YSR to power. There 
is little evidence that YSR is committed to a 
different view of these matters than Chandrababu, 
or that he is willing to devise ways of standing 
up to the pressure that the World Bank and other 
instrumentalities of neo-liberalism have been 
exerting in these matters. Much of what he is now 
heard saying against Chandra babu's brand 
of  neo-liberal economic philosophy he picked up 
in the run up to the elections, and was never 
part of his way of looking at the economy.

It is also to be noted that the forces distorting 
India's economy to serve a variety of external 
interests inimical to those of the poor and 
needy, have not been content with prescribing any 
transparent economic policy imperatives at all to 
suit their ends. They have indulged in a number 
of devious measures behind the backs of the 
people, with the active connivance of the rulers. 
Chandrababu was a willing collaborator in this, 
and YSR is not proof against it. The economic 
philosophy ruling the world, namely that 
resources, opportunities and governmental 
assistance of all kinds are optimally distributed 
when they are put unreservedly at the service of 
those who can augment them with the most 
investment and generate from them the most 
income, is easily understood when it is plainly 
stated, and easily dissented from if one has the 
slightest conviction that progress should be 
everybody's progress, not at some unspecified 
date in the future, but with reasonable 
immediacy. But that policy prescription has not 
been content with such transparent debates. It 
has sought to work itself into our polity by 
opaque devices and has succeeded wherever it has 
found local collaborators among those in power. 
Those who believe that YSR will resist where 
Chandrababu was willing are fooling themselves.


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Buzz on the perils of fundamentalist politics, on 
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