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Mainstream, VOL L, No 19, April 28, 2012

Mainstreaming Equity in a World of Growth

Monday 30 April 2012



Alternative Economic Survey—India: Two Decades of Neoliberalism by Alternative Survey Group; Daanish Books, New Delhi; 2011; pp. 466; Rs 450.

For the last 20 years, the Alternative Economic Survey Group has brought out a compilation of essays in response to the government’s Economic Survey published around the time of the Budget. This has been an important annual intervention in the debates surrounding growth and develop-ment, bringing to the forefront issues of equity and justice. This particular volume brings together an analysis of India’s twenty-year experience after liberalisation, focusing on several aspects of the economy and society.

Critical essays on neglected topics such as education, health, tribal distress, environment, and science and technology, give a fresh perspec-tive on issues of development in India. The intro-ductory essay begins with a scathing but now familiar critique of the growth-at-all-costs approach post-liberalisation. K.N. Kabra argues that the exclusive focus on the GDP is misguided and that ‘it has been overburdened with tasks much beyond the meanings it can either contain, capture, convey or deliver’. (p. 11)

Kabra highlights the growing inequalities in the nature of goods and services produced and consumed: where 46 per cent of children are malnourished, one litre of milk costs more than a 25 minute STD/ISD call; or that airports are mushrooming while rural road and transport connectivity on rickety, overcrowded mini-buses is abysmal and dangerous. What are the structural reasons that enable such contradictions to emerge? Kabra attributes this to the deification of the GDP as the only measure of success, which ‘ignores most of the structural and qualitative aspects of…the elements that constitute development’. (p. 11) Other essays in this volume discuss various ways in which the poor have been further excluded from any benefits accruing from growth including the marginalisation of tribals by resource extraction for mining and industry discussed by A. Prasad, problems with the government’s approach towards disinvestment by R.K. Mishra and J. Kiranmai and a critique by K.A. Rao, the privatisation of healthcare and its consequences by T.S. Nair, and essays on finance, employment and the Budget.
V. Upadhyay highlights the state’s abysmal healthcare system for the poor and high food price inflation that has made basic sustenance a struggle, sending many spiralling back into poverty. Today, at best, the poverty line gives a measure of ‘desti-tution, hunger and starvation in the country’

(p. 149), rather than a minimum living standard. With the shift to the private sector provision of healthcare and education services in the period of liberalisation, the official poverty line must take into account these costs, he argues.

P.M. Mathew gives a snapshot of several small and medium enterprises (SMEs) in select industries such as leather, textile, metal works, silk and handlooms. For the unfamiliar reader, a short description of the policies and historical events related to the sector from the 1950s onwards would have helped put into context the impact of neoliberal trade policies of the last 20 years. In response to job losses and decline of these regional industrial hubs, policies of stimulus packages, micro-finance and promotion of entrepreneurship are questioned by Mathew. He argues that distress is creating ‘shadow entrepreneurs’—individuals who are forced to turn to self-employment without the skills or support to become successful.

Even more insidious is the role of policy prescriptions, such as microfinance, in creating pseudo-entrepreneurs—where there is ‘more of finance, with much less of enterprise’. (p. 171) Mathew mentions, but does not explore in detail, the ‘unusual resilience’ of the SME sector in India. This is linked to caste and gender dimensions of work and flexible labour arrangements in SME clusters (for example, see Chari 2006) and deserves more attention.

K. Das’ essay on infrastructure highlights inequalities in rural-urban provisioning in various categories such as sanitation and electricity. He questions measures of success like ‘coverage’ of areas, which considers infrastructure as a one-time input, as opposed to requiring maintenance over time. Data quality regarding coverage fails to account for the disrepair or breakdown of facilities that is commonly seen in rural areas. The neoliberal emphasis on financial returns from infrastructure provision, argues Das, has further throttled the creation of facilities for the poor, especially those living in poorer states.

The essay on trade by S.K Singh discusses the shift towards capital intensive, energy intensive and low employment growth of exports in India, in contrast to the free market theory’s expectation that trade would increase in areas of comparative advantage, such as cheap labour.

According to K.N. Kabra, the experience of commodity futures trading started in 2004, which saw the inflow of speculative capital from financial investors, contrarily showed that price volatility increased in certain food crops. Without stringent and timely regulatory actions, he argues, such trading has had primarily negative impacts especially when commodities chosen for trade do not fulfil the basic criteria. (p. 257)

An essay on science and technology (S&T) innovation by D. Abrol draws attention to an emerging contradiction between older policies of technology financing and neoliberal policies of foreign direct investment and competition. Tax-payer money and public resources have been put into Indian companies which have subsequently been acquired by foreign firms. The pharmaceu-tical sector is a case in point where Ranbaxy, Shanta Biotech, Nicholas Piramal and others benefitted from government funding for indige-nous technology development (for example, Hepatitis-B vaccines) but have now become a part of foreign entities with no stake in domestic health concerns. (p. 408)

Further, Abrol points to a shift that has taken place away from addressing the social and economic needs of ordinary Indians towards catering to market demand—usually reflecting the needs of well-paying consumers in India and abroad. For instance, no substantial research on fuel cells for scooters is being done despite it being a major automotive segment in India. (p. 388)

Pharmaceutical research on anti-ageing, pain management and cosmetics has seen greater interest with research on malaria, filaria and TB lagging behind. (pp. 407-8) Neoliberal modes of evaluation of research, such as the number of patents, has had damaging consequences for the S&T system—it ignores other forms of output from laboratories and privileges a closed knowledge system.

Abrol argues for a reorientation of priorities and promoting technology transfer to marginal groups. But there is also a need to recognise innovation at the grassroots and for promoting two-way collaborative research—past scientific research with a focus on developmental problems has yielded poor results partly due to this one-way technology dissemination approach. (Hall et al. 2004)

THE essay on environment and globalisation by A. Kothari brings together a critique of existing policies that disregard environmental impacts and proposes a radical ecological democracy as an alternative set of policy prescriptions for India. With growth seen as the only way to success, policies have promoted the extraction of natural resources with complete indifference to their deteriorating quality and reducing availability. Such growth benefits a small section of the population due to inequities in consumption, and this kind of consumption produces a huge amount of waste material that is burned or collected in growing landfills—both toxic to the environment and human health.

Kothari cites a 2007 study which shows that ‘150 million Indians who earn above Rs 8000 a month are already above the global limit of 2.5 tonnes of CO2 per capita that scientists consider is necessary if we want to restrict the temperature rise to below 2°C’. (p. 342) The lifecycle cost of resource consumption, from extraction to cons-umption to disposal, finds no place in the calcu-lation of the GDP. In fact, a study in the late 1990s concluded that environmental costs were nearly 10 per cent of India’s GDP—if they are included, our rosy growth rates will plummet.
In the recent past, environmental issues were publicly linked to several policy issues of resource extraction and science and technology research. But, as Kothari shows, they have yet to be mains-treamed into national planning in India. Despite a section on the environment in the Economic Survey for many years, there is no analysis of the impact of major economic policies from an environmental perspective.

To some degree, this is a criticism which can be levelled at the Alternative Economic Survey too. It is thus heartening to see an in-depth essay on environment in this volume, but such concerns are not foregrounded in the rest of the report. For instance, the essay on transport meticulously evaluates the class dimensions of vehicular growth, but mentions the problematic nature of resource consumption associated with this only in the last sentence.

The strength of the Alternative Economic Survey Group has been to help mainstream issues of equity and justice in thinking about economic growth and development. How benefits are distributed and who bears the costs are questions that our policy-makers are forced to confront today. The various aspects of inclusive growth and the need to focus on social and human dimensions of development are well articulated in the report. But the ecological consequences of the paradigm of growth are mentioned only selectively.

The essay on agriculture, for instance, discusses the problem of over-exploitation of ground water but fails to mention the growing problem of pests and environmental and health consequences of pesticide use as a result of monocropping in the pursuit of productivity. Further, it uncritically accepts government reports that blame farmers for low productivity due to lack of skills and education, without underscoring the ecological, social and economic context within which farming takes place.

Mainstreaming environmental critiques of growth is imperative today. Measures of growth like the GDP attribute value to natural resources only once they have been extracted, and consider them to have no value when they are under the ground, in the forest, or in the sea. The essays in this volume argue that resources must be shared amongst people in a just and equitable manner, but the report does not comprehensively address the longer term needs of future generations.
The Alternative Economic Survey is a powerful voice today, and can become an effective medium to foreground environmental concerns, especially of inter-generational equity, within the framework of equity and justice. One minor editorial suggestion is to provide an index which can facilitate cross-referencing on topics across chapters.

Chari, Sharad (2006), ‘Social labour and the geography of work in Tiruppur, Tamil Nadu’ in Raju, Saraswati and Kumar, M. Satish and Corbridge, Stuart (eds.), Colonial and Post-colonial Geographies of India, Sage Publications, New Delhi, pp. 141-161.
Hall, A.J., B. Yoganand, R.V. Sulaiman, Rajeswari S. Raina, and Shambhu Prasad (2004), ‘Innovations in innovation: reflections on partnership, institutions and learning’, CPHP South Asia, ICRISAT, and NCAP: ICRISAT: New Delhi.
Richa Kumar is an Assistant Professor of Sociology and Policy Studies in the Department of Humanities and Social Sciences, Indian Institute of Technology, Delhi.
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