Unpredictable Circulations

FROM 1965 a particular figure, the accumulated revenue deficit (the gap between net revenue profit and operating income) appeared at the end of the annual accounts of the Calcutta Port Trust. Despite its debut in 1965, this number came to dominate policy on the Hooghly only from the 1980s. Its annual return then created a year-long crisis. It had to be responded to by immediate short-term policies aimed to reduce its size during the following year. It became a financial legacy that required no analysis of the reasons for its existence. It was not attributed to specific policy actions or decisions from which different strategies could be learned. Instead, it dispersed a general responsibility throughout the Calcutta Port Trust. Gradually the bureaucracy and its highest body, the Port Trust Board, became a site of struggle over how to reduce this figure.

In this chapter I breach the status of the accumulated revenue deficit as a mathematical fact. I trace its origins in the era of centralized state planning, restoring its complex political history. I then explore the new fetishized agency that it acquired as public deficit was increasingly managed as a technocratic fiscal problem. I show how this shift created an accelerating, volatile rhythm focused on repayment of debt within the Calcutta Port Trust. This replaced an older emphasis on state debt as an endlessly deferred, long-term political obligation. I follow the unplanned alterations to relations with labor, property, nature and technology that developed out of everyday fiscal crisis. Austerity capitalism, as we will see, is characterized by increasingly unpredictable forms of capital circulation and unstable, dangerous livelihoods. It proceeds through the devaluation of labor; decentralized speculative planning; and improvised low-tech investments.

State Debt and Long-Term Political Obligation: Nationalist Capitalism on the Hooghly, 1965–84

The accumulated revenue deficit had its historical origins in ambitious political schemes for the remaking of the Hooghly through technological intervention. In the 1960s and 70s the future of the Calcutta Port Trust rested on three projects laid out in the first four five-year plans. These were top-down, centralized schemes orchestrated and financed by the Ministry of Surface Transport (MOST) and the World Bank. The first of these, the Farakka barrage, was for the benefit of the port, but was not under its control. This was under construction across the Ganges in order to regulate the flow of the river into the Padma and the Bhagirathi River (the tributary that joins the Hooghly to the Ganges). Water levels had been declining in the Hooghly since the 1930s. The plan was that the Farakka barrage would divert 40,000 cubic feet of water per second into the Bhagirathi. This would guarantee flow into the Hooghly, reviving the fortunes of the Calcutta port.

The second project, which was directly under the control of the port, was the refurbishment of the docks in Calcutta. In 1958 and 1962 two World Bank loans were negotiated by the chairman and the government of India to finance this. The total loans were for $29 million and had a long, slow repayment term of twenty years at a low interest rate. This was to be used for the expansion and modernization of the berths at Calcutta docks. It would also pay for new heavy equipment such as cranes, dredgers and pilot vessels. An infrastructure of repairing workshops and mechanical cargo-handling would also be put in place. But the majority of the loan was to set up a hydraulic survey department. This department was seen as particularly crucial, as it would remake the river into a productive artery.

The third large-scale project was the building of new docks downriver from Kolkata on the west bank of the river at Haldia, only 40 kilometers from the sea. In 1958 the port had considered introducing a deep draft anchorage at Diamond Harbour on the eastern side of the river, but the deputy conservator suggested in 1959 that a place on the opposite bank at Haldia be chosen. From this small seed the project for a satellite port to Kolkata at Haldia took on momentum. This was in spite of the fact that in the same year the channel at Haldia had become impassable. It was only reopened through twenty-four-hour dredging. Ignoring this inauspicious beginning, MOST and the port trust pressed on with this location. They were confident that the World Bank loan to support the development of the hydrographic survey department would allow them to overcome these limits to their ambitions.

The expectation of MOST and the Calcutta Port Trust was that that any debts taken on to support these three schemes would be paid off by future productivity. Bureaucrats and politicians were confident that a combination of hydraulic science and long-term investment in national prosperity would have a transforming effect. So when the amounts of loans steadily increased from 1967 onward, the central government was not concerned. Instead they kept on renewing their political commitments to the possibility of future national wealth. When the accounts of 1967–68 revealed a deficit of 3.13 million rupees, resulting from the costs of borrowing to finance Haldia, a central government Port Finances Inquiry committee was convened. This concluded that the government should keep lending over the long term to guarantee future success. As debts mounted, MOST even began to suspend the fiscal responsibilities attached to its loans and subsidized the Calcutta Port Trust. It introduced a complete moratorium on the repayment of government loans for Haldia. This continued into the 1990s, even as costs for Haldia rose. When the accumulated revenue deficit rose to Rs10.56 million by March 1972, the central government also agreed to give a retrospective subsidy of 80 percent of dredging costs in the Haldia area. Confidence in these expenditures continued because all concerned were convinced that hydraulic science and the effects of the Farakka barrage would solve current problems. In 1973 it was estimated that each year 4 million tons of cargo would move through 40-foot-deep drafts in the Hooghly near the new port. In 1976 the board confidently predicted that the full amount of the debts would be paid back to the government within eight years of the opening of Haldia.

Yet these ambitious political plans for prosperity were already looking as if they were unlikely to ever be realized. They had been sacrificed to a greater national good — the building of diplomatic relations with the new state of...