THE FISCAL CRISIS AND THE MONETARY SYSTEM 29
either a political crisis or a further reduction of private effective demand in relation to capacity.
Keynesian in origin, this simplistic construction provides little insight into the fiscal crisis of the Indian State, if there is one. The Indian public fisc has two basic purposes, different from and much more important than supplementing private effective demand. These two purposes originated from two kinds of weaknesses of the Indian big bourgeoisie at the time of Independence: in terms of resources, material and monetary, and in terms of social and political clout or credibility. Corresponding to the first it was necessary that the State undertakes to build an infrastructure to complement the development of capital, as also build up a financial superstructure that would draw into the mainstream of capitalist circulation all the assets held by other property-owning classes which had not been hitherto monetised. The second weakness implied that if the big bourgeoisie were the sole leader of the new State, it would undermine the credibility of the regime, thus impeding the development of capital. It necessitated the mobilisation of other property- owning classes as allies into a coalition to be led by the big bourgeoisie.
A working coalition between the big bourgeoisie on the one hand, other property owners and the middle classes, urban as well as rural, had already emerged during the Independence movement for the same reason, i.e.,to provide credibility of the movement in the eyes of the Indian people. After Independence the bourgeoisie had to continue to rally these classes around itself. This required from the very beginning that the common fisc of the government function as a source of various transfer incomes and compensation to all kinds of property and to the petty bourgeoisie. It also required the erection and elaboration of a country-wide machinery for implementation of such transfers, evaluation of claims, setting up of norms and arbitrating between counter-claims of different claimant groups. This led to the proliferation of a wide network of government departments and offices all over the country, and a rapid rise of government's consumption expenditure. Significantly it also rapidly expanded not only the bureaucracy but a petty bourgeoisie cadre of the government who held strategic positions not so much in decision-making but in implementation. This last group, the creation of political necessity also became essential for the political rule of the coalition to continue, and increased the cost of maintaining the coalition further, not only on account of their salary which of course has always increased faster than the cost of living, but because, to retain this vital section loyal to the political rule the governmental system had to leave enough discretion in their hands regarding implementation. While this has provided petty unaccounted incomes all over the system, it has further increased the social cost of maintaining the political coalition, and provided hospitable infrastructure for large black incomes to be generated.