Alex Tuscano explores the trajectory of India being the 5th largest economy in the world, and at the same is 111th out of a total of 125 countries in the Global Hunger Index (GHI) 2023; with its progress against hunger nearly halted since 2015.
When I was studying "capitalism" I understood that it is an economic system that is governed
by a certain law, more appropriately called logic of functioning of capitalism. The capitalist
invests his money to purchase capital, meaning the building, the machinery, the raw material,
and a certain hour of work (8 hours of work) from the labourers. In the process of
production, the labourers with the help of technology convert the raw material into finished
products. At the end of the production process the owner of the capital sells the product and
gets cash in return. The owner will not be satisfied if the sale of the finished product gives him
the same value as that which he puts in the process of production. He is looking for profit from
the process of production. The capitalist wants to recover his investment in the means of
production and the profit. If he has bought weaving machine, cotton and has employed wage
labourer he wants to recover the equivalent value of this with profit. Since the cotton has
become clothe there is an increase of value of cotton. This increase of value makes it possible
to get profit. The labourers need to get wages. How much does a labourer need to get?
Laborers should get wages that will be sufficient to maintain the family of the labourers. This
means the labourer should get equivalent value of the cost of his and his family’s shelter, food
clothing, health care, and education of his children. This the most basic livelihood needs of the
labourers. While labourers get their wages they produce double of the value of their wages in
8 hours of their work. This is where the profit of the capitalist lies. There is a difference
between the amount the capitalist pays as wages to the labourers and the monetary value the
labourers create in eight hours of work to transform
If capitalism functions along this logic there is nothing wrong with it. Of course there is an
inequality in the process. It is not anybody’s crime that there is an inequality in the society.
Those who own the means of production will make profits, their profits will keep growing and
it will get accumulated and expand his capital. The labourers will spend their wages on the
livelihood of their families and will again go to work to earn wages.
From the logic of capitalism labourers get wages and the capitalists get profit. The difference
we have shown here from the textbooks of economic is that the profit and the wages is from
the new value the workers have created. The difference between the total value the labourers
create and the wages they receive is actually the profit of the capitalists.
Capitalism exists because of unequal distribution of wealth. Moreover it exists because there
are people own the wealth and there are those who do not own anything. The wage earners
get to work with those who own wealth then they can live from the wages they receive for their work. When the wealthy put their wealth into production and when they employ wage-
earners who will work for the wealth-owners then capitalism comes into existence.
The capitalism has reached the next stage of development, and it is called finance capitalism. A
capitalist instead of investing his own money to buy real capital he invites people to give him
money which he can invest in real capital. He then issues share certificates and sells in the
open market. Here banks play a very important role in this process. Earlier we kept our
money in the bank and the banks lent to the capitalists. But now money comes to the
capitalist in the form of shares. Stock market has become the real market of capital and
capital has become socialized. What do we mean by capital is socialized? Today the capital is
not owned by an individual capitalist who started his industry. His capital belongs to the
people who have bought shares of the company. And those who own maximum shares of the
company control the functioning of the company.
Hostile Takeover of NDTV by Adani
Recently we have experienced how the NDTV which was started by Radhika Roy and Prannoy
Roy gradual grew into a corporate and public limited company and was able to sell shares to
public. He borrowed interest free loan of Rs. 403 crore from Vishwa Pradhan Commercial
Private Limited (VCPL). He took this loan in the name of RRPR Company. VCPL Company was
funded by Reliance Company; and gave it equivalent value of shares. Formally the value of
shares with Reliance remained as shares. But on a fine day the ADANI groups bought this
VCPL Company for 103 crores. Mr. Roy and his wife landed in a situation where they did not
any longer owned majority shares and therefore control of the company. In this way ADANI
became the owner of NDTV, holding the maximum shares and De facto overnight Adani
became the owner of NDTV. This is a classic example of how finance capital alters the nature
of capital and the capitalists.
It was important for ADANI to take over NDTV because it was the only TV channel that gave
news and report about the real issues of India: unemployment, education, farmers’ distress
and so on. This had become a major obstacle for his growth and the brand name of Adani.
Today NDTV runs the risk of become a mouth piece of Modi government and Adani company.
Coal Scam
We have heard of coal scam under UPA government. It was related to allocation of coal mines.
But today we have a much greater scam around coal. Mr. Prahlada Joshi had informed the
parliament that there was no shortage of coal. But in spite of this the National Thermal Power
Corporation asked the government to import 10% of the required quantity of coal. The price
of coal in India is Rs. 1700 per ton. But if we have to import coal then we have to pay Rs.
17000 per ton. The government of India decided to import 20 million ton coal. Out of this the
government gave the contract to Adani Enterprise to import of 17.3 million ton coal. Mr. Rahul
Gandhi brought to the notice of the public that Adani Enterprise while importing the coal to
India had rooted the coal through Dubai and escalated the price of the coal.
Privatization of Air Ports and Sea Ports
When Modi came to power it had decided to privatize the airports. It was stipulated that no
one corporate company can own more than two airports. But this rule was amended and a corporate was allowed to buy any number of airports. With this Adani Enterprise was able to
acquire six airports. The Mumbai Airport was owned by GVK Industries –a very reputed
company. They had developed the airport to status that it has today. The GVK was harassed
through raids by ED and income tax and finally made to hand over the airport to Adani. Adani
Ports and Logistics commenced operations at Mundra Port in Gujrat. Today it owns 15 ports
across India.
Loan Waving Business
Subramaniam Swamy has stated that the biggest non-performing assets of the bank are from
Adani enterprises. After 2014 the banks have written off Adani’s loans amounting to colossal
proportions. If one wants to know how Adani is able to acquire such huge number of
companies the answer is simple. He has not invested his own money. He borrows from the
bank to buy airports, and seaports; and when he fails to repay the loans it gets waved off. In
conclusion the amount of loans waved off is basically the money that belong to the tax payers.
Adani owns the companies bought from the loans that were waved off.
Hindenburg Report
This report exposes certain controversial dealings of Adani Company. Adani has 7 stock
registered companies, e.g. Green Energy, Power transmission, Ports and logistics, Coal
Company, Gas, etc. He owns $ 120 billion stocks. Of these stocks $100 billion came to him in
the last three years.
He is accused of violating SEBI rules. According to this rule any public limited company
should not hold more than 75% shares. 25% shares should be held by public. But these
shares are held by the 30 off shore shell companies created by Adani located in Mauritius,
Dubai. The names of some of the companies are APMS investment Funds, Cresta Fund, LTS
Investment Funds, Elara India, Opportunities Fund, Opal Investment Funds. These are
basically controlled by Adani and his family members, Rajesh Adani, Vinod Adani these
companies are suspected to be involved in money laundering. They can manipulate share
prices and over value their companies. Based on the high value of the companies Adani can
get huge bank loans.
Are you shocked by these details? This is capitalism. It is called aggressive capitalism fully
controlled by finance capital. Capitalists used production of commodities for human
consumption to satisfy human needs is only an excuse. Their real game is different. Now we
understand why while our economy is the 5 th largest economy in the world, we still have a
huge number of our population going hungry to bed every day; and health care, education,
employment, etc. will remain a far cry for our people.
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