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Mainstream, VOL LVIII No 47, New Delhi, November 7, 2020

Instituting An Alternative Mode of Employment Creation In Bihar Through Construction of Niche Structure | Sunil Ray

Sunday 8 November 2020

by Sunil Ray *

(The following is the revised version of my talk delivered on the topic on “Employment and Economic system” on the occasion of Bihar Assembly Election- 2020 organized by PAIRAVI, a Delh-based NGO (through webinar) on October 6, 2020).


Before discussing about the main theme of my presentation, I intend to share the following. After my presentation was over, one of the distinguished participants asked me why is it that unemployment issue never occupies the center-stage of public discourse as compared to social issues like caste discrimination, atrocity on women etc. notwithstanding it being so serious and all-pervading to destabilize the economy of the state? My responses were brief although they required elaboration. My responses were as follows: It may not do so now, but I could see that it is going to gain terrific attention in the days to come. Not in Bihar alone. It is bound to overshadow all other issues and surface as the major development issue throughout the nation under the present economic arrangement. The development engineering which is primarily rooted in the capital system under global capitalism cannot postpone resolution of such issue (principal development contradiction!) for long. Of course, it will try to evade it and see that it never occupies the center stage of the development discourse for some time. The system will continue to prioritize social issues as mentioned that are not so difficult for it to act upon and effectuate the mechanism of compensation. While inhuman structural deficiency of both economy and society continues to display its barbaric manifestation as time passes accumulation of social cost in terms of unending sufferings never stops. The dialectics of the evolutionary process of the society counts it and, at some point of time, the system discovers its point of inflection with those who are deprived of the right to employment.

It of course does not mean that unemployment issue is not going to be the central issue or mother of all issues. It is going to be so since it is bound to aggravate in the extant economic arrangement that has its inherent limitation to regenerate beyond a point. The system cannot overshadow it for a long time since it has the potential to encapsulate other issues and surface as the development plank (primary contradiction) in its relational totality. The system in place is well aware of the fact the if the unemployment problem that has been growing at a frightening scale is brought to the center of public discourse it can hardly hide behind social issues. It is easier to tide over the temporary crisis by redressing social issues as compared to hunger and undignified living of the humans for the latter has potential to trigger off social movements that can challenge the same system. Hence, it considers quite safe not to allow such an issue to be magnified. I also observed that political system that works according to the rules of the capital system has succeeded in expanding the size of the middle class even in the third world countries like India. If out of 10 unemployed persons one is employed, it is cited and exaggerated in an attempt to muzzle the voice of the rest by creating islands of hope to live in. Besides, concession in some form or the other works in the system so effectively that could stultify dissents by means of pushing them to soft bargaining with the system in which latter ceases to have words further. Finally, I observed that the point of inflection would gain momentum in the Indian sub-continent soon when the deprived together start claiming the right to dignified living after having crossed all trenches (like the ones mentioned above), as I am reminded of Antonio Gramsci’s Prison Note book, created by the power to safeguard its interest. The state of Bihar is, no doubt, has reached the point of inflection. The idea of Bihar as it was 50 years ago no longer exists. It has undergone transformation to an unbelievable extent in that battle cry for living with dignity is heard in chorus that has no caste, no class, no religion, no gender disparity. And, what is true for Bihar is true for India.

I begin by briefly discussing about the nature of the Bihar economy and examine the material conditions of living and its moribund economic structure that needs complete transformation. Then I focus on the appropriate means for transforming the existing structure and lastly, I propose to outline the actionable agenda that the elected government may choose to follow.


Bihar Economy

It is necessary to underline that the state has not undergone any meaningful transformation of its economic structure that could yield development through substantial creation of employment opportunities. Economic structure is determined by the nature and extent to which different economic activities take place and how their interrelationships reinforce each other for the structure to remain undiluted. While agriculture in Bihar with large (majority) small / marginal land holdings has been the source of economic development, industry / processing has registered a miniscule presence. Trade, service and business that are offshoot of major economic activities are stuck up obviously at a low ebb. Most of the farming households with marginal land holdings do not have sufficient income and works to meet their survival needs for a dignified living. In the non-agricultural sector including those who are self-employed are all categorized as “employed” but the fact is majority of them are poor. This category of population is also engaged in their continuous struggle to meet their survival needs. These two categories of population constitute almost 70 per cent of the population of the state and live in what I call “Need-based economy”. They never contribute to capital accumulation. They constitute non-capitalist production base. Hence, the economic structure that the state has had for decades especially after the bifurcation from Jharkhand took place is continuously reproducing itself at a low level and is undoubtedly trapped at it. The spurt in SDP can well be explained by the spurt in agricultural growth. However, the irony is that the latter fails to expand the chain of value creation in the absence of its forward and backward linkages. So, it is more of vertical expansion of a few landed gentry in the midst of massive horizontal saturation of the economy which is represented by the largest majority. It is, as I understand, outgrowth of another form of lopsided development that has no determinate ramification on structural transformation. However, such a temporal change showcases the political power as harbinger of change that wants to gain mileage out of it and confirms its perpetual stay in power.

However, the abysmal economic performance with fragile structure must not overshadow potential that the state has inherited to create employment opportunities. Its geographical positioning with vast ecological services at different levels in most parts of the state creates basic conditions for economic transformation to take off. Besides, the growing endowment of the skilled manpower in the recent past accompanied by its virtue inherited from the past of the ability to work hard, a cultural capital, for which Bihar is known for generation make it more plausible to churn out suitable combination of all forces together to ensure transformation of the economic structure. All that lacks is well-orchestrated state intervention. No such endeavor has been in sight ever since India gained Independence. Rural Bihar is left to be prone to crisis only to be aggravated after bifurcation in 2000.

To put the point straight, Bihar economy needs structural transformation. However, it must not be led by big / corporate capital as is normally prescribed and followed in the third world country like India. I am reminded here of the adventure of the dual economy model of Prof. Arthur Lewis taught in all universities suggesting breakthrough to be brought about by large capital-intensive industries in capital scarce countries. We were told and are told even now also by the ‘model builders’ of mainstream economics that logic of development and employment creation lie here only. True that big capital-intensive industries have come up in the country both in private and public sector, but unemployment also grew. The latter grew disproportionately at a higher rate and on the top of it, no substantial transfer of agricultural labor to the industry took place. Despite it being shabby in proving itself as an appropriate strategy in the given material conditions as exist in India in general and Bihar in particular, it continues to be seen as ‘path finders’ by the govt-sponsored economists who seem to have been colonized by the culture of ‘catching -up’ with the capitalist developed countries. Whether it works or not, the real issue is somewhere else that one can hardly discount.

Let us assume that such big industry is going to come up (nobody knows after how many years!). The question is how many educated unemployed (at various level of education and skill) from Bihar are going to be absorbed as wage earners. Second, no doubt there will be spurt of self- employment stating from small tea shop to big grocery shop around the industrial base as positive externalities. While self-employment is never a certainty in terms of magnitude of its expansion and whether the average earnings are above distress level or not, wage employment is more certain. But, then, the issue is how many of the educated unemployed people from Bihar will get wage employment.

The development story of the non-farm sector in the state presents a dismal picture. This has happened primarily due to almost non-existence of any worthwhile big industrial establishment in the state. But at the same time there is no noticeable growth of non-farm sector at small scale. The gradual decline of the agro-based industries that had grown in the past at several points of time testifies it. Besides, uncertainty loom large regarding inflow of large private capital in this sector from outside sources. Again, one does not know how labor intensive it will be and how it will impact the local environment. In other words, logic of employment creation through inducement of large capital is not only fraught with higher degree of uncertainty but also it cannot be the only source that the state must look forward for its development. It may boost up state GDP but may remain far away from installing development trajectory appropriate for the state especially for employment creation. In other words, my argument is that growth can never the source of development. It is contrary to what the government-sponsored economists have been religiously advising the nation following the footstep of the international organizations such as IMF and World Bank. It is important that we seek complete disengagement from such mystical route for transforming the economy. The development scenario which is embedded with several contrasts and contradictions can be made people-friendly only if, I argue, niche structure is constructed at the decentralized level that can lead structural transformation of Bihar economy. It gives new logic of development with low capital base but large employment opportunities. This is not possible to achieve if the state finds only corporate capital as the means of transforming its economic structure.


Niche structure

Niche structure is a new collective entrepreneurial structure for all types of economic activities with new practices and behaviour organized in the form of self -organization as a part of commons. Its construction may give rise to innumerable associated producers’ self -organizations in all lines of activities including manufacturing, processing, servicing such as education and health care services, trading, marketing, business etc. They are collective enterprises, but not co-operatives in the traditional sense, with low capital base, not being an appendage of the mainstream economic structure. They maintain their relative autonomy guaranteed by the local interactions among sectors triggering off indigenous growth process. They are independent creation of the workers who are also capitalists and who chooses to exploit themselves than allowing others to exploit them. They are not protégé’s either of the government or large capital, but choose to grow based on the force of ‘comprehensive co-operation’. They can even take the support of the state but being fully conscious that they are not ruled by it.

The idea of construction of niche structure is developed here under the influence of the Niche constructing Theory (NCT) which is branch of evolutionary biology. It states that species can influence its evolution or growth through appropriate environment which is propelled by the construction of niche structure. It means that the species can influence its own evolution or growth by means of creating niche structure and environment. This is contrary to the Standard evolutionary theory (SET) that states species can evolve or grow through natural selection in the environment which is already created or given. In other words, environment here is not created by the species, hence, it can never influence it for its growth. To contextualize the same in the case of Bihar economy, individual human species need to create niche structure for appropriate environment so that they can influence the same environment for their evolution and growth. They do not have to wait for the environment to be created by the large capital and finally to be left abounded. Natural selection of the Standard Evolutionary Theory (SET) which suitably explains creation of employment for those who prove themselves fit for the market to serve capital or those human species that are capable of being adaptive to the situation as created by capital for its own interest. It means that those who cannot prove themselves fit for the same market, the number of which is terribly large, remain outside of it. It is here that one finds absolute relevance of the construction of niche structure that triggers off growth of collective enterprises or associated producers’ self-organizations in all lines of economic activities to be spread over rural to peri-urban to urban areas.

The struggle for existence of the Darwinian evolutionary theory echoes here. It is a collective struggle, not an individual one including dependence on each other which relied on as Darwin call “web of complex relations ‘between different organisms, with a great deal of interaction and co-operation, rather than competition alone”. It is in contradiction to what is known as social Darwinism which champions the cause of ‘survival of the fittest’ as coined by the T.H. Huxley, a complete distortion of Darwinian evolutionary theory reducing it to individualistic struggle for wealth and status that fits well into the philosophy of modern capitalism. This goes well with the Standard evolutionary theory that espouses economic growth or evolution which is of no help to lay out the development trajectory of the Bihar economy. With this brief theoretical underpinning, I propose to outline the role that newly elected government of Bihar may choose to play to create employment opportunities for the unemployed of Bihar.


Role of the Government

One must keep in mind that the development trajectory that creates scope for employment creation as argued here has nothing much to do with employment creation for the unskilled labor through MNREGA. The latter is absolutely a state sponsored welfare programme which is distinctly different from structurally oriented employment generation as sought here. One may at the best see how the former is supplemented by the latter


Formation of a separate department

As a part of organized intervention by the government, the immediate task is to create a separate department at the government level. The principal activity of the department is to promote collective enterprises or associated producers’ self-organization in all economic activities throughout the state with low capital base. The Department will be responsible for the following.

Agro-climatic zones

Dividing the state in to several agro-climatic zones for lunching new entrepreneurial activities based on the local eco-system and agricultural practices.

Zone-wise Resource Mapping

The zone-wise resource mapping is must and should be completed before embarking on any non-farm activity. Resource mapping includes mapping of (a) natural resources (b) agricultural resources (c) skilled human resources including the traditional skill (d) unemployed human resources both educated (with the level) and uneducated ( e) those who are on permanent migration and temporary migration (f) animal resources (g) marketing of agricultural produces and processed or manufactured goods (e) nature and extent of the services available that include 1. availability and nature of health care services 2. educational services available from primary schools to University and any other technical education, coaching centers etc. 3. Availability of repairing works.

Zone-wise exploration of new product lines and processing activities

This must be accomplished zone wise based on the findings of resource mapping particularly natural and agricultural resources in the respective zones. It is here that the government must seek for assistance from the scientific research organizations such as Central Food Technology Research Institute (CFTRI), Central Science and Technology Institute (CSIR), Indian Institute of Technologies (IIT) Regional Research Laboratories (RRL), agricultural universities and any other technical-scientific institutions located in Bihar or elsewhere in the country that are needed to explore new product lines based on local natural and agricultural and other untapped resources.

Zone wise Identification of collective entrepreneurial activities

The next job is to identify what all activities could come up in each zone on the basis of resource mapping and exploration of new product and serving lines. These include both agro-based and non-agro based activities. Exercise must be taken up to examine the feasibility of such activities both from supply and demand side. It is followed by the immediate steps such as (1) identification of educated unemployed who are willing to join this endeavor as collective entrepreneurs to set up self-organizations (2) investment and management of seed capital in that public-private partnership framework can be examined if it works well in this respect although it is essentially a private entity. Even if the initial investment is partly made by the government, it may be in form of loan. In any case, several options may be explored and choose the one which works well. (3) appropriate and relevant skill development programme for the young women and men who are willing to join this collective enterprise development programme. Infrastructure which is now available at the decentralized level for imparting skill may be used. However, course curriculum, identification of skill which is required but in short supply and on which training is to be imparted, duration of the skill training programme and selection are all to be centrally monitored at the state level depending upon the requirement. It is needless to mention that most of the skill development programmes fail to succeed for they are being imparted without knowing whether they are required or relevant in practice. If necessary, a low-cost micro-management Institute for skill development may be set up at the state level to develop collective enterprises in the state in the light of what is indicated here (4) basic infrastructure required must be built by the state. In case infrastructure is available but remains unused, it should be brought to use as public property.

Last but not least, while it may be necessary to overview the existing status of the performing non-farm activities, regeneration of the economic process at the decentralized level based on the local resources may succeed to bring about development of the local economy. It leads me to argue as a part of my concluding remarks that indigenous process of development that can push the local economy to flourish can never be ignited by borrowing forces of change from outside. If borrowed then it must complement the local process of change. It must not dictate the latter.

(Author: Sunil Ray is Former Director, A. N. Sinha Institute of Social Studies, Patna)

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