Indian Agriculture -Capitalist or Pre-Capitalist?-Parts Two and Three-1983


Indian Agriculture – Capitalist or Pre-Capitalist ?

This is a continuation of the article that appeared in the March issue of Vanguard. The first installment examined the aspects of Land utilization and Holdings, while this deals with inputs and Produ­ctivity Trends. The last installment will appear in the May issue of Vanguard and will cover, Credit, Disintegration of the Peasantry, Markets and utilization of the surplus.


The main distinguishing feature of capitalist agriculture from the pre capitalist modes is that in the former the inputs in agriculture in the form of

(i) irrigation

(ii) fertilizers and manures

(iii) improved seeds

(iv) plant protection

(v) drai­nage and reclamation

(vi) live­stock and

(vii) mechanization;

is far greater and effective than that of the latter. Let us now look at the degree of utilization of the above inputs in Indian agriculture today.


A regulated supply of water is an indispensable precondition for capitalist agricultural pro­duction. In India, though the water potentialities are immense, the tapping of the available resources is extremely low. Even the water that is tapped is not properly controlled. In India though there are 113.1 million hectares that could be irrigated the area actually under irrigation is only 57.2 million hectares.18

But this is not all, In order to improve the productivity of the soil; irrigation must be closely linked with drainage. But today, due to lack of proper drainage, floods and salination of the irrigated area is a co­mmon occurrence. It is estimated that no less than Rs. 10,000 crores would be needed to improve drainage in Indian agriculture.19


These are the nutrients for the plant that has a direct bearing on the productivity. The average consumption of fertilizers on an all-India basis is 29.8 Kgs. per hectre. Within India there are certain states where the fertilizer usage is still less: Assam 2.4 Kgs. per hectre, Madhya Pradesh 9.00 Kgs. per hectre, Orissa 9.3 Kgs. per hectre, Rajasthan 7.7 Kgs per hectre, Tripura 4.0 Kgs per hectre.20

It would be interesting to com-pare these figures with the fertilizer consumption of some capitalist countries: Nether-land 610 Kgs/hectare, Belgium 520 Kgs/hectare, New Zealand 503 Kgs/hectre; Japan 354 Kgs/hectare.21Even this meager consumption of fertilizers in India is not met by sources within the country. The following table throws some light on the source of fertilizers, which feed our agriculture.

The table that about Nitrogenous, 24% of the phos­phorous and 100% of the potash fertilisers is imported – while the remaining so-called indigenous production is with foreign collaboration. Such a situation drains rural capital to the foreign country and retards capital formation in the Indian urban centres. In any freely developing capita­list economy the minimum one would expect is the ability of the urban centres to provide the necessary inputs in agriculture, espe­cially when they are so insignificantly small.


(Thousand Tonnes: second column imported first column indigenous production)


Nitrogen (N)                                                           Phosphorus (P205)                                                        Potash (K20)


1952/53  53.1 44.3                         7.4  —                                          —   3.3

1962/63  194.2 229.5                     88.3 8.0                                         — 44.3

1968/69  563.0 780.1                     213.290.8                                      — 165.2

1979/80  3224.3 1295.3                 763.1 237.1                                    — 554.5

Also, the above table indicates that in absolute terms there has been a manifold increase in fertilizer consumption over the 28 years. This is often quoted as yet another proof of agri­cultural capitalism. This state­ment becomes utterly absurd when we compare the per acre usage in India of 29.8 Kgs/ hectare with that of a capitalist country like Japan, whose usage is 358 Kgs/hectare. Now, let us turn to the question of manures. Manures, the base to which chemical fertilizers must be added, are the fertility and physical condition of the soil. In India the chief poten­tial source of organic manure is cattle dung and urine. Most of the urine is wasted, while half of the available dung goes as fuel. Also green manure, fish manure, oil cakes etc. are rarely used – indicating a very low level of the systematic application of agronomy, which would be the norm of any capitalist who tend to devise the best methods to maintain the health of their soil.


A method to advance agri­culture development is through improved seed utilization. To­day the indigenous strains have low response to fertilizers and are low yielding. The improved seed utilization does not cover even 33.1% of the cultivated area, and the few promising, high yielding varieties are not derived from Indian conditions, but are foreign strains acclimatized in India, of which most have failed. This indicates a complete lack in development of plant-breeding research in India and dependence on foreign technological developments,


In India crops are extensively damaged by diseases, insects, rodents and other animal pests. The Indian farmer tends to leave plant protection to nature itself. As a result of this, cer­tain of the promising varieties are going out of cultivation eg. TNI paddy; P2. 16F cotton; IR8 paddy. It is estimated that the loss of paddy due to “stem-borer” varies from 15% to 50%, and as yet there is no method of control. The same is true with “rusts” on wheat and sugar cane. In India the average consumption of pesticides. 0.3 Kg/ hectare,


The patched-up technology and the unscientific use of land in Indian agriculture, has had disa­strous effects on the Indian soil. The cultivation of heavy crops year after year without returning much back to the soil, the use of chemical fertilizers with­out the manure base; etc. has resulted in salination. Also, due to deforestation and a pri­mitive mode of preparation of the soil, it has been estimated that roughly 200 million acres are suffering from soil erosion and that Rs. 8,400 crores will be needed to prevent this ero­sion. 23


India has the largest number of livestock in the world, (20%) yet its contribution to the culti­vators is very limited. The percentage of agricultural in­come from live-stock is a mere 14 per cent while that of the U.S.A. is 60 per cent, U.K. 78 per cent, W.Germany 71 percent, France 64 percent and Denmark 32 percent24. Italy serves as an illustration of how an increase in live – stock income reflects a development of capitalism in agriculture. In the early 7P30s, about 36 per cent of the natio­nal income of Italy was derived from agriculture and the contri­bution of livestock was only 18 per cent. By the beginning of the 1960s the share of national income from agriculture had declined to 20 per cent, but the contribution of livestock to agriculture had gone up to 37 percent.25

In India the percentage of live­stock income to agricultural income has remained static. . Most of our cattle exist under terrible conditions. In India, cattle has remained chiefly as a source of power and of milk for home consumption, rather than for meat and dairy indu­strial requirements.


“Capitalism” on the one hand, in the factory giving rise to and extending the use of, machines in agriculture; on the other, the application of machinery to agriculture is of, a capitalist character, ie. it leads to the establishment of capitalist relations and their further development.26

Mechanization is, in fact, one of the chief manifestations of capitalist farming. As in the case of fertilizers there is mani­fold increase in the utilization of machinery especially, imple­ments like tractors and electric pump sets. In mid 50s there were just 20,000 tractors and \ ,50,000 electric pump sets but by 1975-76 their number increased to 2.42 lakh and 24 lakhs respectively. But still their role in Indian agriculture is secondary. The animal (8.12 million draught animals) and human labor dominates Indian agriculture.

Also, the limited mechanization introduced is entirely dependent on imperialism – either by direct imports or by collaboration agreements, which drain the surplus from agriculture not to industry but abroad. Lenin pointed out that “urban capi­talism strives to provide all the resources of modern science for the development of the technique of agriculture, but it leaves the social position of the producers at the old miserable level….”.28 In India, urban capitalism Is subordinated to imperialism by which the cycle of mutual exchange and accumulation of agricultural capital and national industrial capital is broken, and the process of industrialization, retarded, which, in turn, directly affects the develop­ment of capitalism in agri­culture.

In India the chief factors behind the poor level of inputs in agri­culture are – (i) Small parcels of land; (ii) primitive techni­ques; (iii) isolated character of the economic system; (iv) poverty and miserable condi­tions of most of the producers; (v) large scale unemployment and under-employment resul­ting in very cheap labor; and (vi) insecurity and high rate and degree of tenancy. Also, the cultural backwardness of the producers prevents them from utilizing all the inputs available. All these are in fact manifestations of a semi-feudal made of production.


The stage of development of agriculture can also be gauged by two factors; labor and land productivity. Marxism points out that the higher the stage of development of agriculture the greater is the degree of land and labor productivity. Since the feudal stage is histo­rically at a lower stage than that of the capitalistic stage, the land and labor producti­vity in a feudal system will be much lower than that of a capitalist system.

This can be seen from the tables: IV &. V


Land productivity in yield per hectare in Kgs of specified commodities 


India1667 Japan-5503 USA-5244


India 1410; USA-2039 Canada-2112 France3760  USSR-1630


India-757 Japan-1730 USA-2763.




Average labor productivity per year in agriculture (in US Dollars)

India 105

Norway 973

UK 2057

Canada 2126

Japan 2265

USA 2408

New Zealand 3481

W Germany 3495



Increase in India of the average rate of productivity from 1955/56 to 1978/79.

(1969-70 = 100) [figures below are for the following years] 1955/56 1965/66 1978/79


Rice 85.4  95.8  108.7

Wheat 77.9 77.3 139.9

All Cereals 87.4 92.3 104.9

Pulses 105.7 103.4 107.0

All foodgrains  90.8 94.5 105.0

Oil Seeds

Groundnut 70.8 106.1 104.0

Oil Seeds 81.0 101.2 107.0


Cotton (lint) 103.9 1-2.4 103.9

Jute 97.2 104.6 122.6

Total Fibres 103.0 103.0 105.6

All Plantation Crops 71.0 96.6 123.4


Sugar Cane 75.6 116.1 129.5

Tobacco 94.3 86.6 94.8

Potato 55.7 94.4 166.7

Total Miscellaneous 86.6 115.1 158.8

Total non-food crops 87.0 101.8 116.1

All commodities 90.0 96.1 107.6

The above tables clearly show a very low level of land and labor productivity in Indian agriculture.

Capitalism entails a develop­ment of the productive forces and so the productivity – both in industry as well as in agri­culture. What then has been the increase in productivity of Indian agriculture?

Table VI  shows that taking 1969/70 as the base (100), the average annual growth of productivity in food grains in the ten years between 1955/56 and 1965/66 was 0. 37which rose to 0.62 in the years between 1965/66 and 1978/79, a small rise.

With regards to non-food crops the productivity actually decreased from 1. 48 to 1. 27 in the same two periods above mentioned. The only substantial increase is in the case of wheat. In the case of wheat the average annual growth rate between 1965-66 to 1978-79 is 4.6.

The above figures clearly indi­cate a very low growth in pro­ductivity, in which the produ­ctivity of cash crops is even less than that of food grains. Even a most slowly developing capitalist economy would not show such a trend. Also, considering the growth in popu­lation is approximately 2.5 per cent annually and that the in­crease in productivity of all crops is just 0.76 points annu­ally, the effective development is negative. Also, it can be noticed from the above table that there is a phenomenal degree of fluctuation in produ­ctivity from year to year.

In any developing capitalist country the “productive forces are continuously increasing, and thereby the productivity increases without significant fluctua­tions.” In India, though, there is only a marginal increase in productivity in an absolute sense, the net effect is negative.


The major form of credit in Indian agriculture is usurer’s capital. What exactly is meant by usury and what mode of production is normally associ­ated with it? To explain this in the shortest possible manner it would be necessary to quote Marx at length, who brings out, in a most brilliant form, the exact nature and content of usury.

He says, “interest bearing capital, or, as we may call it in its antiquated form, usurer’s capital, belongs together with its twin brother, merchant’s capital, to the antediluvian forms of capital, which long precede the capitalist mode of production and are to be found in the most diverse economic formations of society…………….

Usurer’s capital in the form whereby it indeed appropriates all the surplus-labor of the direct producers, without alte­ring the mode of production : whereby the ownership or possession by producers of the conditions of labor and small-scale production corres­ponding to this – is its essential prerequisite; whereby in other words, capital does not, directly subordinate labor to itself, and does not therefore, confront it as industrial capital—this usurer’s capital impoveri­shes the mode of production, paralyses the productive forces instead of developing them, and at the same time perpetuates the miserable conditions in which the social productivity of labor is not developed at the expense of labor itself, as in the capitalist mode of pro­duction”.32

Wherever commodity produc­tion is limited and predominant small-scale production of the self-employed peasant exists, the peasant has to depend on one source of money or another for his expenses. Now, let us take a look at the sources of credit in Indian farming.

(See table VII below)


Sources of Credit  in Percentages 

                               1950-51             1960-61               1970-71

Moneylenders             70                     61                      36.89

Trade &

Commission agents    6                        7.2                  17.3

Landlords                     2                        0.9

Government &

Co-operatives              6                    15.4                    26.74

Relatives                      14                    6.4                    13.83

Commercial banks

etc                                  less than1   less than 1             2.19

Others                            —                     —                       3.04

The figures from the table can only be a rough estimate as the moneylender will never disclose the actual money lent because of tax and feudal inhibitions while the debtor never reveals, the full debt as a matter of prestige. According to Reserve Bank of India survey, total rural indebtedness which stood at Rs. 900 crores in 1956 had gone upto over Rs. 3000 crores by 1964, & 3752 crores by 1970/71.

But even according to the above figures 67.75% of the credit comes from the money-lenders,, traders and relatives while roughly 28.93% comes from the commercial banks and government co-operatives. This clearly indicates the massive burden of usury on the backs of the peasantry. Also, the fact that only 28.95% of the credit is from banks indicates a totally undeveloped and inefficient banking system. In Fact, Marx pointed out that the “social character of capital is first promoted and wholly realized through the full development of the banking system”.

Also, usury centralizes money wealth where the means of pro­duction are dispersed. It does not alter the mode of produc­tion, but attaches itself firmly to it like a parasite and makes it wretched. It sucks out its blood, enervates it and compels reproduction to proceed under ever more pitiable conditions.

Furthermore, while the usurer, not content with squeezing the surplus labor out of his vic­tim, gradually acquires posses­sion even of his very conditions of labor, land, house etc. and is continuously engaged in thus expropriating him, on the other hand, this complete expropria­tion of the labourer from his conditions of labor is not a result which the capitalist mode of production seeks to achieve, but rather established condition for its point of departure”.33

As a matter of fact, Marx says that “Usurer’s capital employs the method of exploitation characteristic of capital yet without the latter’s mode of production”…………and…………….”under Asian forms, usury can continue a long time, without producing anything more than economic decay and political corruption”.34


In a developing commodity economy and of capitalism the agricultural population is transformed chiefly into two classes: the rural bourgeoisie and rural proletariat. What are the basic characteristic features of the mode of production in which these two classes are engaged? Marx says that there are two :-

First : it produces its pro­ducts as commodities. The fact that it produces commodi­ties does not differentiate it from other modes of produc­tion; but rather the fact that being a commodity is the domi­nant and determining characteri­stic of its products, This implies first and foremost, that the laborer himself comes forward merely as a seller of commodities, and thus as a free wage-laborer, so that labor appears in general as wage-labor………… The second distinctive feature of the capita­list mode of production is the production of surplus value as the direct aim and a determi­ning motive of production. Capital produces essentially capital……..”36

In the process of development of capitalism from the old feu­dal base, the producer who indulges in the capitalist mode of exploitation and production continually reduces the cost of production, augments, his capi­tal, re-invests the surplus to reproduce capital and ousts the uneconomical small holder. The means of production that the peasant loses is now transferred into a commodity in the hands of the capitalist, who again produces the commodities that were once consumed by the direct producer himself.

In doing so, the new owner, the capitalist, creates a demand for the home market through the purchase of farm inputs and consumer goods to feed his farm and family. This process takes place primarily due to economic reasons i. e. due to an increase in his income under the capitalist mode of produc­tion; and also because of certain cultural and environ­mental factors by which the old feudal landlord, who normally does not cross his village boun­dary, now comes into contact with urban life and culture and invariably adopts them,

On the other hand the ruined peasant, who used to fiddle on his patch of land like a maggot, now steps into the dynamic path of social life and conscious­ness like the busy bee, and is compelled to resort “o sell more and more of of his labor-power now a commodity, and to resort to the purchase of commodities in the market.

Thus the process of differentia­tion of the peasantry into the proletariat and the rural bour­geoisie in a developing commo­dity economy, creates a home market which acts as a fertile field for the canal of capitalist production.

Can any of the CPI, CPM and Trotskyites who so eagerly pro­claim agriculture capitalism in India show such a ‘polarization’ (or differentiation) of the pea­santry into the rural proletariat and bourgeoisie, necessarily resulting in an increase in the home market? As we have seen earlier the historical develop­ment of relations in Indian agri­culture involves a process com­pletely different from that of any capitalist country. 35 What has taken place in India is not the revolutionary process of differentiation of the peasantry into the rural proletariat and bourgeoisie, but a mere transfer of ownership of land from the poor sections of the peasantry into that of the zamindars, jagirdars, money lenders and merchants (not capitalists).

Further, Marx has said that there is no difference between a capitalist in general and a capitalist farmer in particular.

A capitalist farmer is one who makes his own capital breed by employing wage-laborers as ‘a particular sphere of production, 37 Also, the mere fact that labor power is purchased does not of itself imply a capitalist mode of production. For example, it is not capitalist wage labor if labor power is purchased merely with a view to satisfying by its service or by its product, the personal needs of the buyer of the labour-power. The fun­damental aim of the buyer of labor power in the capitalist mode of production is accumu­lation of his capital i. e. “The transformation of a part of the surplus value into capital, and its use …….. for new production, …….. And it is only this kind of seller of labor power who is a capitalist wage labor. As Marx said capitalist wage-labor im­plies free wage labor not ‘ veiled slavery’ and ‘formal freedom’ of the wage laborer. 38

In India the process is different: the majority of landholders till the soil chiefly with family or hired labor and spend most of the produce for their house and farm requirements, while only the balance takes the form of a commodity. Such a mode of pro­duction can be classed as subsistence farming rather than capitalist farming. In fact to even consider, there must first and foremost, be a capitalist.

Expec­ting capitalism without a capita­list is as ridiculous as expecting rain without clouds. Of course the big landlords lease out most of their land or, because of land reform acts are forced to take to cultivation through co-operative, mechanized farms, devasthans etc. with a view merely to keep the land in their hand rather than to extract increased surplus value from it.

Also, the new landholder did not re­invest his additional income to improve agricultural production and productivity, because of the flourishing nature of trading and money-lending capital. The added income was chiefly used as mercantile and usurer’s capital. So this new landholder was not able to create much new demands to the market either through farm or personal consumption.

The displaced peasant, on the other hand, either became tenants (paying exorbitant rents), or were thrown into that hell of unemployment or underem­ployment; there being no indu­stry to absorb them as would have been the case in a developing capitalist economy. This has led to an increase in com­petition for wages, leading to a rate of payment below that of the means of subsistence. This constitutes an important factor for the transformation of the peasant into a semi-free wage laborer dependent on the landlord. The semi-free wage laborer, as a result of his poverty and personal depen­dence on the landlord is not able to present any additional demand for the market. Most “Marxists” 39 blankly portray this section as wage laborers without specifying its essence. Marx has said that one of the fundamental prerequisites for capital is “the existence of a worker who is ‘free’ in a double sense: free of all constraint or restriction on the sale of his labor power, and free from the land and all means of production in general, a free and unattached laborer, a” Proletarian”, who cannot subsist except by selling his labor power”. 40 Let us now see exactly how free is our Indian agricultural laborer.

The following facts are well known to anyone from rural India: -

i) The overwhelming majo­rity of the wage laborers in rural India have neither fixed hours of work nor fixed rates of payment.

ii) A significant amount of rural workers are ‘perma­nent mazdoors’ who are semi-slaves. They go to work before sunrise and come home late at night. At times they have to return immediately after dinner to the landlord’s house, farm, or cattle-shed, as a watch­man or for menial tasks. They have to pay compen­sation for the implements or livestock lost or dama­ged at the farm. During festivals their family mem­bers are forced to do the housework of the landlord without any fixed payment (they usually receive food). Also the ‘Mazdoor’ is dependent on the landlord for loans on easy terms apart from his housing materials and firewood and at times, employment for his family members.

iii) Indebtedness of the laborer to the landlord. The-indebted laborer must work for a part of the wor­king days free of wages, which goes towards interest. Apart from this he has to present items like, fish, forest, produce eggs, chicken etc. free of cost as a token of gratitude to ‘the landlord for granting the loan.

Iv) Payments in kind.

v) Employment on a caste and family basis rather than on an efficiency basis-It is well known that the high caste landlords prefer non-sche­dule castes workers at relatively high rates, even though the schedule castes perform the same work with the same or even greater efficiency. Also, very often a particular laboring family is attached to a particular landlord for many generations.

Such then, is the nature of the wage-laborer and his emplo­yer, the landlord, in rural India. Can we call such a system capitalistic? And such a landlord as a rural bourgeois, a Kulak? And such a semi-free wage labourer a proletariat?

7 home market

Marx observed that “the expro­priation and eviction of part of the agricultural production, not only set free for industrial capital, the laborers, their means of subsistence, and mate­rial for labor: it also created the home market”. 41

But in India, as we have already seen (see disintegration of peasantry) that a part of the agricultural population is evicted from their soil but not absorbed into industry. The commodity which they possess, their labor power, has not been transformed into the elements of variable capital; in fact, they are unable to sell this commo­dity, labor power, and are so ‘unable to purchase other commodities from the market. This is the key factor for the misera­ble conditions of the Indian market.

TABLE VIII – (1977) 45

Country % share of Agriculture in the gross domestic Product . % of working population in Agriculture

India 37   73

U.S.A  . 3    3

Britian  3    2

Australia 5 6

Also “the degree of the development of the home market is the degree of development of capitalism in the country”.45 The size of the home market of a few countries is apparent from the following table.

TABLE IX (1977) 46

Country GNP Per Capita in US Dollars


USA 8520

UK 4420


JAPAN 5670



Another important factor as pointed out by Lenin is that the basic process of the develop­ment of commodity production and of capitalism is the social division of labor by which agriculture becomes a branch of industry. Specialization (the production of separate or even separate parts of a product) in both industry and agriculture takes place. 42

What is the extent of this specialization in Indian Agri­culture? The overwhelming majority of the peasantry produces different products of con­sumption within the farm itself without major involvement in the market mechanism. A glance at the village farmer shows that the same farmer produces seeds, nursery (seedlings), fodder, food grains, dairy and meat requirements, vegeta­bles, fruits, flowers, etc.

The major part of the above produce is utilized for home consum­ption rather than for the mar­ket, by which circulation of commodities and the size of the market is limited. As Lenin further pointed out that/’one cannot conceive of capitalism without an increase in the commercial and indu­strial population at the expense of the agricultural population and everybody knows that this phenomenon is revealed in the most clear-cut fashion in all capitalist countries.” 43 The extent of this process in a few countries is indicated by the following table. [ this table seems unavailable in the file we are transcribing from-Signalfire]

This shows how miserable is the extent of the Indian market. Also, there are many indica­tions within the Indian market mechanism, which reveal the size of the market and the extent of commodity production. The existence of many intermedia­ries, a poor communication system, sales at the village mar­ket itself and the fact that prices are at their highest just before the harvest and are lowest immediately after the harvest, are all indications of a primitive market mechanism.


Further proof that the cause for the existence of the big landed and landless laborers is not due to a differentiation into the rural bourgeoisie and pro­letariat can be seen from the distribution of the tangible wealth, and the nature and mode of utilization of the surplus.

A capitalist farmer would in­vest a large portion of capital in productive spheres, and reinvest the surplus so as to reduce the variable part of the capital (labor power) and increase the constant capital (machinery etc.). What then is the nature of distribution of wealth in rural India

TABLE X – (1971-72)

Tangible wealth of Rural Households (excluding land owned and held under Special rights)

PARTICULARS % of the total

Residential Buildings 52.1

Other structures and Building sites 1.8

Livestock 18.6

Implements and Machinery 8.3

Jurable household assets. 13.7

Dues receivable 1.8

Financial assets. 3.3

Now let us observe the cash



                                   A               B         C          D

Purchase of land     0.99        215.9  17.84   27.99

Purchase of land

rights                         0.29             6.6   0.54     0.86


of land                       1.36            27.1   2.25    3.52

Building and other

land improvement 12.08         139.7 11.54   18.11

Orchards & plantation 2.49     56.1    4.65     7.27

Wells                               2.17     111.8   9.24   14.50

Other irrigation

Sources .                          1.77     35.5       2.93    4.61

Agricultural implement

Machinery and transport

equipment.                       24.08  232.3     19.2  30.12

Farm houses sheds, etc.  4.94   50.8         5.02  7.88

Purchase of livestock     9.43  315.3       26.06 40.57

Others -                             0.77   8.6             0.71 1.12

Total                               l 27.93 1,209.8      — 156.86

A — Proportion of households reporting, (percentage,)

B –= The aggregate expenditure (in Rs. Crores)

C = Share in expenditure (%)

D = Average amount for households (in Rs.)

The table ‘shows that more than 67% of this tangible wealth is locked up in unprodu­ctive spheres (items 1, 2, & 5) while over 18% is locked up in livestock, and only 8.3% used for improved implements”.

Here too we see that 17.84% of all expenditure goes towards purchase of land” “which has nothing to do with capital in­vested in agriculture itself”49 while 26.06% goes towards purchase of livestock as against only 19.2% on implements, machinery, transport equipment etc. of which the percentage spent on improved machinery will be much smaller.

In rural India, in fact, huge amounts of the surplus are utilized in such non – productive spheres as: precious metals, con­struction of huge buildings and sites, conducting of massive marriage and ceremonies and in lavish living. Even the invested part of the surplus goes towards such profitable fields as merchant trading, usury and entertain­ment (eg. cinema production.)

To conclude, we find that the existence of commodity pro­duction in agriculture has often been portrayed as proof of a capitalist India. But commo­dity production, itself, has existed right from medieval times; Lund has existed as a commodity since the 1790s. And capitalism began to emerge in the Indian economy in the 1890s when British industrial capitalism was transformed in­to finance capitalism. And, also, as much as a third of the population had been divorced from their means of production ever since the latter half of the 19th century. Yes commodity production has definitely in­creased. Of course, since the 18th century. But, why after nine decades since the entrance of capitalism into India is 70% of the population still dependent on agriculture? Why is 72% of our working population is still employed in agriculture? Why is industry not able to supply the materials (fertilizers, machinery etc) required by agriculture Why is agriculture unable to supply the raw mate­rials (cotton, wool, ground-nut etc) required by industry ? And why is our half-starved massive agricultural labor-force not able to supply sufficient food for the remaining 28%?

As a Marxist, a dialectical and historical materialist, to be able to understand the exact state of the present it is necessary to trace the exact process of the past that has led to the present. Then, by co-coordinating the past with the present we can find out the path of the future.

India was a colony of the British, exploited first by mer­cantile capital (1702-1813), then by industrial capital (1813 to the late 19th century) and, finally, by finance capital (late 19th century onwards). During .the mercantile and industrial eras only exchange of commodi­ties took place between Britain and India. During the era of industrial capital one of the chief requirements of the development of capitalism in India took place-i.e. Expropria­tion of the producer (handi­craftsmen and peasants) from their means of production. But the other chief aspect was not fulfilled -i.e. The Indian capita­list (owners of money, means of production, means of subsistence who are eager to increase the sum of values they possess by buying other people’s labor power) did not exist.

This peculiar phenomenon was due to the specific features of colonialism by which the sur­plus product extracted in India was repatriated to Britain to further develop capitalism there. It is for this reason that capitalism could not even be set on its wheels in India. It was only after the transition of industrial capitalism into finan­ce capitalism (imperialism) that capitalism began to develop in India in an extremely limited way. But, while doing so they did not provide the basic requisite for the growth of capitalism-i. e. the destruction of feudalism. On the contrary, they aligned with feudalism, propped it up, and used it as their main social base from which to suppress and loot the people. But why did the imperi­alists not break the feudal base in India? There are two major reasons: Firstly, the breakdown of feudalism leads to the emergence of true natio­nal capitalist elements and a national consciousness which would be mobilized against colonialists themselves; and, secondly, the breakdown of feudalism increases the living standards and so the price of labor thus decreasing the sur­plus value that could be extra­cted by finance capital. Thus, it became imperative for the foreign imperialist monster to enter into an illegitimate mar­riage with the domestic feudal monster Alas; soon they had a baby monster-bastard, the Indian comprador, which to this day, is faithful to the parents.

After World War II when the colonial state machinery found it impossible to suppress the mounting anger of the Indian masses they transferred political power to the compradors while entering into an economic alli­ance with them. Thus, even after the transfer of power, the rule of imperialism feudalism and bureaucrat capitalism continued, but in a new form.

Today, it is this family of mon­sters that is fettering the pro­ductive forces of this country, causing the social degradation of the masses and maintaining the political and cultural back­wardness of the system. It is imperialism that is preventing capital formation in Indian industry by looting hundreds of crores each year, thus preven­ting industrialization and kee­ping India as a source of raw materials and cheap labor; it is bureaucrat capital that is serving as a vehicle to transmit our national wealth and resour­ces to their masters abroad while maintaining military, political and cultural control over the Indian masses; and it is the feudal relations that are hampering productivity and production in agriculture and so the development of the consciousness of the people, and it is this very feudalism that is serving as the social base for foreign finance and bureaucrat capital oppression and exploita­tion. So the breakdown of feudalism becomes the pre-requisite for the development of the productive forces and the democratization of the econo­mic, political and cultural life of our society. Since feudalism is inseparably linked with imperialism and compradorial capitalism; the struggle against feudalism is inseparably linked with the struggle against impe­rialism and bureaucrat capita­lism.

But then, what is the solution for the elimination of this family of monsters? Who will destroy them and release our people from this tyranny, oppression and inhuman exploitation? It is those ‘left and democratic forces including those within the Congress’ as preached by the CPI leaders? Or is it those ‘non— Congress United Front ministries at the state level’, as preached by the CPM leaders? No All these only help perpe­tuate the system by leading the people astray. It is the class struggle, and the uncompressing and ruthless class struggle within this country alone that will eradicate these monsters from the surface of our motherland and will pave the way for the establishment of the people’s democratic dictatorship, which is the only guarantee to prevent these monsters from raising their heads again.

This struggle is going on………It has to continue………it will con­tinue until final victory is achie­ved.


18) Basic Statistics on State Economics of India, Jan. 1980) Commerce Research Bureau.

19) Economic and Political Wee­kly, March 1973, ‘A Charter of the Land’ by B.B. Vohra.

20) Fertilizer News: Annual Re­views of Fertilizer Consum­ption and production 1978-79. Fertilizer Association of India.

21) Fertilizer statistics 1967-68. (The figures for late 1970s are not available.)

22) Fertilizer statistics 1968-69 and 1979—80. Fertilizer Association of India.

23) Vohraa,B.B.-‘A Charter of the land’, Economic and Political weekly, March, 1973

24) ‘Agricultural Situation in India’. 1966 and ‘Food and Agriculture Organization Bulletin, 1977

25) Duttj Ruddar and Sundaram K. P.—Indian Economy

26) Lenin-Development of Capi­talism in Russia, p 228

27) Lenin-Development of Capi­talism in Russia, p 150

28) Ibid, p 229

29) Indian Agriculture in Brief -seventeenth edition

30) Dr. Saljit Singh,- Next Step in Village India. These figu­res (ire for We late ^Ss

31) Ministry of Agriculture — Estimates of area and pro­duction of principle crops in India, 1978-79

32) Marx — Capital – Vol. 3, pp 857*8

33) R.B. l.-All India Rural Debt and Investment Survey, 1971-72

34) Marx-Capital, Vol. 3 p 857-8

35) People’s Power No. 5, arti­cle by author

36) Marx quoted by Ranjit Sau in On Essence and Mani­festation of Capitalism in Indian Agriculture, in Eco­nomic and political Weekly March, 1973

37) Marx-Capital Vol. 1 p618

38) Marx as quoted by Lenin, Vol. 21 p 63

39)Paresh Chattopadhyay in his controversy with Utsa Patnaik (Economic and Poli­tical Weekly, Dec. 1972) emphasized that unemploy­ment (the reserve army) is the general law of capitalism. But he forgot that in a capita­list society the formation of the ‘reserve army’ is due to an increase of constant capi­tal at the expense of variable capital, while in India the acute unemployment and under employment is due to lack of capital itself’

40) Marx as quoted by Lenin, Vol. 21 p 63

41) Marx-Capital Vol. 1, p 778

42) Lenin-Development of Capi­talism in Russia, p37

43) Lenin ibid p 40

44) World Bank-World Develop­ment Report, 1979

45) Lenin-Development of Capi­talism in Russia, p 69

46) World Bank-World Develop­ment Report, 1979

47) R.B.L – All India Rural Debt and Investment Survey, 1971-72

45; ibid

49) Marx-Capital VoL 3 p 788 other references:

1) Crop Husbandry by /. S. Rao

2) Hand book of Agriculture and personal information collected from people in rural areas.

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