Volume 3, No. 12, December 2002


"Reforms" and Scams are like an Object and its Shadow!

Government wages reforms-war on weaker section of people!!

Let us fight this war through People’s War!!!

Part I


(This is the first part of a two-part article, translated from Telugu. The second part will appear in the Jan. issue of the magazine. In this section we shall see the reforms taking place under the banner of privatization. In the second article we shall look at the so-called schemes for women — Editor)

All the schemes framed and implemented by Chandrababu under the training of the World Bank and in the background of its reforms are always with multifaceted effects. Fake transparency is its one face, high-pitched propaganda of people’s participation is its other face, and doing away with the government’s responsibility is its third face. Making hollow promises, offering nothing to the people and mingling with the people in a dramatic manner (interaction with the people) is its another important face. Above all these, the most important aspect in these schemes is the widespread corruption and the filling of pockets of his trusted followers and officials. The ‘Janmabhumi’ program, which is the highlight of these schemes, is a strong example of this. The ultimate objective of this scheme is to weaken the Panachayatraj system, which is supposed to be democratically responsible to the people, and imposing in its place the rule of nodal officers and his party activists. The ‘greatness’ of this scheme is not only diverting the panchayat funds to fill the pockets of their near and dear, but also to pocket the money forcibly collected from the people in the name of ‘People’s Participation’. And the other schemes like ‘neeru sanghalu’ (water associations), neeru-meeru (water and you), watershed, water meter schemes, drinking water supply by closing down small and medium level irrigation schemes meant for guaranteeing drinking water etc. are all being implemented in strict accordance with the World Bank. The ‘Privatisation of Water Scheme’, forcibly imposed upon the people by the World Bank is the most disastrous and anti-people scheme. People have to be appraised of the impact of this scheme. That is why recently an open hearing was held on this problem at the Institute Of Engineers in Hyderabad under the leadership of Neeti Privateekarana Vyatireka Praja Sanghatana (Peoples Association for Anti-Privatisation of Water Supply). The retired High court judges Justice Parvatarao, Justice Vamanarao, Justice Chalapathi, Professor G. Sudha, Satynarayana formed a bench and gave a judgement declaring the privitisation of irrigation and drinking water as anti-people and most disastrous.

As a result of the New Agricultural Policy as part of Vision 2020 (it is referred as Green 2020) and the Electricity reforms, the poor farmers of the rural areas, who constitute 70 percent of the total population in the country, are being completely pauperized, have become beggars and are resorting to suicides because of hunger. The condition of our all-India agricultural sector, which is mortgaged to the imperialist ‘World Trade Organization’ (WTO) and particularly our state agriculture, which has become a backyard for the World Bank is further worsened. What the WTO is doing is only to work for advancing the unjustified interests of the wealthy imperialist nations by sacrificing the interests of backward countries. This fact was also admitted by the State Agricultural Minister Vadde Shobana-driswara Rao. While participating as the Chief Guest in a seminar on "World Trade Agreements – Challenges and Opportunities" on February 2nd 2002, by FAPCCI (Federation of Andhra Pradesh Chambers of Commerce and Industries) at Hyderabad, he said, "Only rich countries are going to benefit by the WTO, however we can also benefit by raising the quality of our products." As a result of the unprecedented crisis in the agricultural sector, the migration of the rural population, who don’t have land to till and no other work to do, to the urban areas has increased. But are the towns in a condition to absorb all these people? No they are not. Thanks to economic reforms and industrial liberalization thousands of factories have closed, lakhs of worker families are thrown into the streets and all the towns are filled with armies of the unemployed.

The handloom sector, which was next only to Agriculture in providing employment in the rural areas went through reforms and was completely destroyed. Leave alone the handloom industry even the power-loom industry couldn’t survive these reforms. The present wind blowing in the textile industry is the jet-loom wind of the foreign monopolies and their collaborating multi-nationals. The appeals, Chandrababu is making to the center for saving the handloom sector is only superficial. As if tired of making these appeals, he has now started making efforts to completely wipe out the handloom sector. The closure of ‘APCO’ (State owned textile marketing agency) is part of this. As part of this APCO has already sent home 530 of its employees through VRS, and has been instructed by the government on 12-04-02 to remove another 500 employees. There are about 250 showrooms, 12 godowns and 12 offices for APCO in the state. When the present staff strength is not enough to manage this institution, the government is planning to remove 500 more through VRS. Through this it plans to close this institution and wash off its hands the responsibility of the weavers. Lakhs of farmers and handloom workers in the state lost their livelihood and are suffering from hunger. The Chandrababu government is trying to cover up their hunger cries with many false schemes and propaganda noise.

Except for taking away even the little livelihood available, all these schemes can do nothing to provide employment. And they can’t create any additional wealth. Now we can see only the VRS and not fresh employment in every government department. The employment exchange offices in the state are sitting idle.

The Chandrababu government, which is moving fast with the reforms agenda is not confined to pushing the agricultural, industrial and handloom sectors in the state into crisis but is determined to uproot the co-operative sector, which gives some employment and some respite to the local farmers. The sugar factories and oil mills under the co-operative sector are intentionally pushed into losses and are handed over to the private sector at cheap rates. Opposition parties like Congress and CPM alleged huge kickbacks in these oil mills and sugar factories and demanded for an inquiry into these deals. But their protests were in vain.

The Chittoor co-operative sugar mill with its 100 crores of fixed assets and 87 acres of land is one of the largest sugar mills in the country. It has a crushing capacity of 2200 tonnes per day and has a total crushing turnover of about 3 and half lakh units per annum. When its sale was announced the entire workers and farmers and the people in the state severely condemned it. The factory general body met under the leadership of its Chairman S P Ramakrishna on 15-03-2002 and passed a unanimous resolution condemning. But the government didn’t listen to their demand. Above this the principal secretary to the ministry of state Public Sector Undertakings, D K Panwar declared on 03-04-2002 the cabinet subcommittee’s decision to privatize a total of 8 mills under co-operative sector including this one. The remaining mills are at Nizamabad (Nizam Sugar Mill), Renigunta (Sri Venkateswara Sugar Mill), Paleru, Anakapalli, Amudalavalasa, Jampani and Cuddappah.

Soon the co-operative dairies also felt the wrath of the government and are being privatized gradually. The Chief Minister, who has been saying, both in side and outside the Assembly, that there is no question of privatized the Chittoor Co-operative dairy, issued the notification (GOMS- No 16) announcing its sale and VRS for its employees. Opposing this sale, the milk producers in the district and dairy employees staged a dharna before the Collector’s office on 15-04-2002. But Chandrababu said that he can’t stop the sale. In fact this is not an unexpected thing for the people in the state. Because they know about his personal selfish interest in this sale. Its sale was necessary to make the ‘Heritage Dairy’ under his wife, Buvaneswari’s name, to prosper by collecting 30 lakh liters of milk and making 3 crores profit per day. The same is the story for ‘Vijaya Dairy’ under the government co-operative sector. It was pushed into losses in a planned manner. In Nellore district one private dairy is collecting and selling about 70,000 liters of milk per day. Another private dairy is also collecting and selling the milk in illegal and un-authorized manner in the district. There are a number of such examples in every district. Neither the Vijay Dairy officials nor its executive committee members ever took interest or action to control the private dairies. The reason is not difficult to understand. They are getting large bribes from the owners of these private dairies.

The ruling party members and the government officials are doubly benefited by the process of privatization of Public Sector Undertakings. The process begins with making these institutions bankrupt. For this purpose corruption and irregular activities are encouraged in them. The ruling party members and the government officials will get their share in these corrupt and illegal activities. Once they are trapped in losses because of the large-scale corruption they are offered to private enterprises at throw away prices. And in these deals they receive huge kickbacks.

The privatization of the State Electricity Board was also conducted on similar lines. Before the beginning of the electricity reforms under Chandrababu, the Electricity Board was making profits under the leadership of its chairman Narla Tatarao. From 1995, the Board was pushed into losses in a planned manner. Uncontrollable corruption of some electricity board officials and political leaders, illegal supply of electricity to big contractors, millers and factory owners with huge political clout, crores of arrears accumulated against big contractors and industrialists, these are the reasons for the losses in Electricity Board. The Electricity Board’s former Chairman, Tatarao, has officially explained with examples that these are the real reasons for the losses to the Board and not the free electricity supplied to farmers. The astonishing facts coming into light day by day with the reforms are proving that Tatarao was very correct in telling the real reasons for the losses to the board.

The Chandrababu government trifurcated the APSEB, having 80 thousand crores of assets, into three companies: APGENCO, APTRANSCO and APDISCOM. In these the total assets of APDISCOM (Distributing Company), with four divisions, would be having at least 25 thousand crores of assets. But the Chandrababu government, announced their worth as only Rs.435 crores (at their book value) in their ‘second transfer scheme’ declared on 1st April 2000. And now this will be sold to any private person at half of it i.e., for about 220 crores (huge amounts will be amassed by brokers in this transaction). Nothing more is required to explain the criminal manner in which Chandrababu is transferring the government assets to his own people. The Electricity regulatory commission has issued licenses for the distribution and retail supply to these four DISCOM companies on 1st January 2000. According to section 11(1) of this licence, any DISCOM company can sell its property at book value. But it is required to take permission from the Regulatory Commission if the asset value is more than Rs.5 crores. It means by splitting the assets to less than 5 crores value they can easily sell the Board properties. Even the CAG (Comptroller and Auditor General) severely criticized this clause.

The majority of properties of the four DISCOM companies is located in the prime locality of Hyderabad city and have very high prices. But the cheat government of Chandrababu is showing their value at rates prevailing in 1959 in its Balance Sheet. In this way the property value was assessed at Rs.6 crores and 77 lakhs (Northern DISCOM – 1.36 crores, Central DISCOM –2.66 crores, Southern DISCOM – 1.66 crores, Eastern DISCOM – 1.15 crores). And if we go into the details of DISCOM lands in various districts, it is having 5065 acres of land in the state. It means 2,45,14,600 yards of land. According to the government’s estimate the value of the land is Rs.2.76 per yard. Can land be available at this rate in any corner of the state? The market value for its lands in cities like Hyderabad and Vishakapattanam is in the range of Rs 5 to 10 thousands per square yard. In any small town and in any corner, land value can’t be less than Rs 500 per square yard.

And there is no limit to the irregularities in the Power Purchase Agreements (PPAs), which the government entered into with private power companies. The payments made by the Chandrababu government to the ‘Lanco-Kondaplli’ power company will shake any one’s heart. From this company, APTRANSCO purchased 3.65 Million Units in August and paid Rs 28.48 crores at the rate of Rs 78 per unit! The Govt is saying that these huge payments are necessary as per the agreement made with that company. TRANSCO declared that this burden must be borne by the people in the form of increased tariffs. And there is no need to describe TRANSCO’s activities. Even after having surplus power in the state, the government entered into PPAs with four private companies – Konaseema, Vemagiri, Gautami and GVK industries. There is no approval from the Electricity Regulatory Commission for these companies. Even then TRANSCO is spending hundreds of crores of rupees on them in the name of ‘evacuation’. The reason for this is nothing but political pressures. And there will be huge kickbacks behind these pressures. That is the reason why TRANSCO is making losses of Rs 500 crores per annum.

We have seen the electricity magic. The RTC privatization is also continuing in the same manner. The Government is making all sorts of efforts to privatize the Andhra Pradesh State Road Transportation (APSRTC), which is number one in the country in operating efficiency, in fuel efficiency and in providing services. The reason for the survival of RTC is only due to the fighting spirit of its workers. Even then it seems that Chandrababu will not sleep till it is privatized. The Government is giving free licences to private bus operators and encouraging them to compete with the RTC. The Government is acting liberally in providing concessions to them. Many prominent persons in the Telugu Desam Party are eagerly waiting for licenses to operate private buses in various profitable routes once this institution is privatized. Hence sooner or later it is going to be privatized. Chandrababu is also using this privatization of PSUs and Co-operative institutions as means for political rehabilitation. Earlier various types of corporations were used to be political rehabilitation centers. In the reforms era 80% of them were abolished. And Chandrababu is forced to look for new avenues for giving favors to his followers. And ‘privatisation’ is very useful for this purpose.

We have seen the corrupt and irregular practices, which the Chandrababu government is indulging in officially, directly and through its policies in the garb of reforms. If we want to talk about the high level corrupt practices of the government committed unofficially and about the economic offences encouraged by the government by its negligent attitude it will become a lengthy book.

The first to be mentioned in this category is the recently exposed ‘food for work’ scheme. This is the ultimate combination of un-precedent economic and political corruption. It is a central scheme and is meant for providing food grains as wages to the famine affected people in various states. Our state got the highest quantity of rice against this scheme. And it is natural. The Telugu Desam government in the state is able to blackmail the center with its 22 MPs. In one way this scheme is nothing but a bribe of Rs.2000 crores to the state government by the central government. If this scheme is genuinely implemented we could appreciate Chandrababu. But this huge scheme became a feast for the ruling party. According to this scheme rice coming from the center under this scheme will go to the fair price dealers under the supervision of revenue officials. Contractors (generally belonging to ruling party) who work under this scheme will pay coupons to the workers according to their wages. Dealers will give rice to them as per their coupon value. This is the scheme. But except for some stray occasions this scheme was never implemented. Contractors, dealers and revenue officials joined together and sold it to rice mill owners. Rice mill owners in turn polished it and sold it to the FCI. In this way the government’s rice reached back to the government’s godowns keeping the people hungry and making huge profits for the contractors, revenue officials and rice mill owners. In the assembly opposition parties including its allies criticized the government for making this scheme a ‘feast scheme’ for the ruling party. Congress party representatives had submitted memorandum to the central team, which came to inspect the implementation of this scheme, demanding investigation by the Central Vigilance Commission (CVC) into the corruption and irregularities committed by the government in the implementation of this scheme. In spite of all these criticisms from every corner the Chandrababu government shamelessly swallowed this scheme and digested everything. The Congress also did not mobilize the masses on this issue as it has an equally corrupt reputation.

If we go a little further, we can see the high level scam of Eluru lands that thoroughly exposed the Chandrababu regime. In the name of paying compensation for the lands collected for the construction of the Eluru canal and for the construction of houses for weaker sections in Pinakiwada area, the Sub-Magistrate Potinaidu of that area in collusion with the defense lawyer has manipulated court records and swallowed crores of rupees. They have done this without the knowledge of the real claimants and also used some ficticious names. How the government sanctioned crores of rupees to them immediately as and when they asked for it, without verifying the records? And why did it give the money? These are questions yet to be answered. The then leader of the Congress legislature party, Janardhan Reddy raised this issue in the assembly alleging that a scam of this magnitude couldn’t be possible without the Chief Minister receiving his share. As a result of serious and hot discussion in the assembly, the government reluctantly appointed the Justice Somashekar Commission on 02-06-1997 to inquire into this scam. After extensively looking through in 13 districts, after critically examining about three thousand related papers and after hearing 916 witnesses and when the commission was about to come out with its final report, the State high court bench consisting of Justice Subhashana Reddy gave a judgement against the appointment of this Commission on some technical grounds on 23-06-1999. Taking the excuse of this judgement, the Chandrababu government immediately stopped the inquiry of this Commission and cancelled the Commission. On a Special Leave Petetion (SLP) filed by Janardhan Reddy on this judgement, the Supreme court overruled the high court judgement and gave its judgement declaring that the constitution of Justice Somashekhar Commission as proper and asked the state government to continue its investigation. But until now the Chandrababu government didn’t do anything to implement this Supreme Court’s judgement. By seeing the way Chandrababu tried to cover up this we can be sure that he had receive large scale kick backs in this scam.

Under the regime of Chandrababu there is no end to the list of urban co-operative banks cheating crores of rupees from their members. The Krishi bank chairman Kosaraju Venkateswara Rao swallowed 31.76 crores of deposits belonging to 10,912 members and closed down the bank in August 2001. And after that the Charminar co-operative bank with 32 branches in the city and with Rs. 321 crores collapsed. This didn’t come out till the suicide attempt by its Chairman on 25-02-2002. This bank had sanctioned Rs 181 crores to 124 persons against the guarantee of some worthless lands in Rangareddy district. This proves the involvement of some very big persons in this ‘Charminar Bank’ scam. Only 13 people were given loans of Rs 100 crores from this bank. This couldn’t be possible without the ‘co-operation’ of political bigwigs. And some other banks like Laxmi, Bhagyanagar, Sitara, Aryan etc. have also turned their boards. Out of the 165 co-operative banks in the state the condition of 30 banks is like this. And what to talk about the various finance companies. The Nagarjuna finance company has looted Rs. 80 crores from the public. On similar lines, institutions like the Pennar Patterson Limited, Midwest Growth Fund Limited, Asia Pacific Investments Limited, DCL Finance Company etc. have shown an empty hand to their members. The Govt didn’t show any response to these attacks on middle class investors. As government itself is a big cheater we can’t expect it to take action against these ‘small’ cheaters.

After telling one more example of how the World Bank reforms are encouraging various types of corrupt and irregular practices and economic offences, we shall stop this list of economic offences. The expansion of the national highways in our state is a huge scheme implemented with World Bank funds and under its conditions. As per the existing norms the forest department has the right to cut down the trees on either side of the road during their expansion and preserve the wood. But as per the World Bank’s directive this was given to private contractors. It limited the role of the forest department just to issue cutting orders. And not only this, the World Bank has imposed another condition, that forest department should plant new trees after the completion of road construction. Forest Department is for planting trees and Contractors are for taking away the timber. What a nice arrangement! For getting cutting orders contractors will pay good amounts to forest officials. And they take away crores worth of timber. With this arrangement loss to the government will be about Rs. 160 crores.

All the political and economic offences and corruption scams in the background of imperialist globa-lisation and World Bank reforms are carried out in a systematic and planned manner. They even display great transparency. They give new definitions for justice, morals, democracy, public opinion, development etc. Newspapers and TV Channels will be continuously highlighting these irregularities and scams. But there is a clever cover-up in their propaganda style. The information media will only talk about the people who amassed wealth from these scams but their discussions will not go in the direction of finding how they made wealth at the cost of peoples’ interest either directly or indirectly. Even if they show some of this angle, they will cover up the fact that people should fight for eradicating these corrupt and irregular activities. The media will try to mould public opinion in such a way that except being like spectators they can’t do anything to stop them. They make us believe that the responsibility to stop the scams and the capacity required for it is only with the state (government). And they cover-up the fact that all these are happening under state patronage, which is essential for its growth.

In this way all the bourgeois information and propaganda media will create an illusion in the people in the name of the information revolution and transparency, and mould public opinion against the people themselves. The information revolution started in the background of reforms and its hollow transparency will try to divert public opinion and put controls on constructive peoples’ resistance. Will there be any exceptions to this, with them taking the peoples’ side? There will be some such cases. But these are also determined and confined to their business interests.

Converting everything into commodities, creating markets for them and making profits by selling those commodities is the natural character of the imperialist capitalist system. Not only physical and mental labour of human beings, not only their bodies, not only the relations between them, but even their thoughts and feelings are also converted into profit earning market commodities for capitalists. In the background of globalisation and reforms, even peoples’ aspirations, their efforts and struggles will be converted into commodities in markets created by capitalist institutions. They can get publicity till they are able to generate profits for them.

Let us see the publicity style about the economic offences, corruption and scams, which are continuing unabatedly under the leadership of Chandrababu who is enlogized as the leader in implementing reforms. The ‘reformist’ intellectuals and media stalwarts who praise Chandrababu for his administrative efficiency will always remain in the forefront in exposing these scams as well. They will always be ahead of others in writing lengthy essays and giving lectures about them. They are worried that these scams will affect the spirit of reforms. They say that it is not proper for a genuine reformer like Chandrababu to neglect such scams. And recommend suppressing them with an iron heel. They do not realize the fact that Chandrababu’s iron heel works only against people’s struggles and revolutionary movements and it will become like a rusted heel on scams like this. Even if they realize this, they won’t talk about it. They are not prepared either to see or to admit the harsh truth that corruption scams will inadvertently follow reforms like a shadow follows its objective.

The reformist intellectuals gradually understand the extent of development achieved by Chandrababu government with the magic stick of reforms. The Loksatta leader Jayapraksh warned the government that its budget deficit is ringing the danger alarm. In one of his articles (Eenandu 4-3-2002) he wrote that government expenditure is exceeding all limits, and that a responsive system is disappearing. But he failed to realize that all this is due to the ill-effects of reforms. Though he started a crusade against criminal politics he is yet to understand the reality that the structure of criminal politics is built on the foundation of economic crimes.

In December 2001, Vaartha newspaper started the discussion on the impact of economic reforms implemented by the Chandrababu government in the state in various fields and continued this discussion for three months. On 15-04-2002, it concluded the discussion with the heading ‘Economic Terrorism on Weaker Sections’. This is a very meaningful heading. In fact the Chandrababu government has entered into a war on the people of the state. This is the war waged by government on weaker sections! This challenge has been accepted and is being repulsed with People’s War!



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