The Dark Side of India’s ‘Growth’ Narrative

BOOK REVIEW
by Debraj Bhattacharya

Alternative Economic Survey, India 2011, Economic Growth and Development in India: Deepening Divergence; Yuva Samvad Prakashan, New Delhi; 2012; Rs 225.

This volume contains several essays by a distinguished group scholars affiliated to the Indian Political Economy Association on the negative aspects of the Indian political economy since the ‘liberalisation’ of the economy in the early nineties. In a way the volume is not just an Economic Survey for the year 2011 but rather a critique of the model of economic growth adopted by India in the last two decades. The volume goes well beyond the specificities of the economic achievements of a particular year and provides the reader with a series of essays that gives a fairly comprehensive analysis as to why in spite of the high growth rate of the economy India continues to be a poor country with a low rank in the UNDP’s Human Development Index. It covers issues such as agrarian crisis, inflation and food security, problems of the power sector, problems of the FDI policy, the increasing clout of the corporate sector, displacement of vulnerable people as a consequence of neo-liberal growth, problems of Indian polity and democracy, corruption and wastage of public money through the Commonwealth Games.

The central argument which binds the various essays in the volume together is presented in the Preface by Kamal Nayan Kabra and V. Upadhyay. They argue that the “neo-liberal policy regime has consistently and increasingly deviated from the basic interests and rights of the common citizens, let alone their democratic aspirations†. (p. 1) They argue that the growth of the economy has not managed to lead to the desired development because the model of neo-liberal growth has failed and it is time for the neo-liberal policies “to go and go lock, stock and barrel†. (p. 4) Kamal Nayan Kabra in another essay has raised doubts about the new slogan of “inclusive growth†which he regards as an eyewash. The slogan is simply meant to make predatory neo-liberal capitalism more palatable to the masses who ultimately vote to elect the politicians who facilitate the process of corporate plunder of the Indian economy in the name of growth of the GNP.

Several essays in the volume further elaborate on this core argument. Jaya Mehta, Vineet Tiwari and Roshan Nair explore the present agrarian crisis in India. They show, on the basis of the NSSO data for 2003-04, that 9.5 per cent of the rural households in India own 56.6 per cent of the total land area and 41.6 per cent of the rural households are landless if we exclude homestead land. (p. 53) They also point towards several emerging areas of concern—arable land is shrinking in India at a rapid rate; Muslims and Scheduled Castes own land only where entire villages are inhabited by them, otherwise they hardly own any land; small farmers are leasing out their land to big farmers as they are unable to cultivate their own holdings; irrigation is getting privatised as there is a shift from surface water to ground water; marginal farmers are not able to cultivate their land around the year and poorer farmers have less access to formal credit than rich farmers. They also point out that the seed industry is now controlled by private companies and multinationals which has resulted in greater exploitation of the farmers and farmers’ suicides. In another essay on the agrarian scenario S.P. Singh shows that 60 per cent of the farmers do not have access to information for advanced agricultural technologies. He also quotes a Greenpeace document to reveal that farmers are aware that use of chemical fertilisers has resulted in soil degradation but they do not know of any alternative option. The small farmer therefore is under severe pressure.
What has made the situation worse is the pressure of inflation. V. Upadhyay, in his essay on Inflation and Food Security, shows that the purchasing of Rs 1 in 2011 was equal to 22 paise in 1990-91. The Government of India has done precious little to control the inflationary pressures and the Planning Commission has in fact reduced the poverty line which has evoked outrage across the country. The Public Distribution System has also failed to provide relief to the poor as the system is mired in corruption and inefficiency.

One reason why arable land in India is decreasing is the fact that land is being grabbed by the state and the corporate sector for setting up industries, dams, mines, highways and Special Economic Zones. Asit Das shows in his essay that millions of hectares of rich multi-crop land and forest land have been acquired by the state in return for a pittance and this has resulted in massive displacement of the population. This “primitive accumulation†is often justified in the name of economic growth and employment. Das however informs that between 1993 and 2005 the net change in employment actually has been adverse. In other words, while there has been growth of the economy, such growth has not resulted increase of employment opportunities for the poor. Instead millions of displaced poor persons have ended up in the urban slums and are forced to work in the informal sector where income is low and social security is absent. To make matters worse in spite of protests by peasants, Special Economic Zones have been set up across the country; these do not subscribe to the labour laws prevalent in the country.

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The setting up of Special Economic Zones is in fact one of the many ways in which corporate capital, national and multinational, have used the neo-liberal policy changes to their advantage. As Surajit Mazumdar points out in his essay, private corporate capital has gained also from the liberal dose of tax sops in the name of “incentives†and certainly from illegal means corrupting the decision-makers. It is in fact the biggest irony of the liberalisation era that at the beginning of the reforms it was argued that the state must withdraw so that markets can operate freely and if the market operates then corruption will decrease. The opposite seems to have been the case over the last two decades. While important sectors of the economy have been opened up to privatisation, it has led to greater corruption as is evident from the series of scams that have taken place over the years, each involving bigger amounts than the previous one. Corporate capital has in fact not played according to the logic of the free market and has tried to get contracts by influencing through money and other means the key decision-makers in the administration.

Several contributors in the volume have asserted that what has emerged in the two decades is not so much a capitalist economy like the advanced countries of the West but rather crony capitalism which is intrinsically linked to the growth of the black market and corruption during this time. Arun Kumar, Saumen Chattopadhyay and A. Sunil Narain have discussed the impact of the black economy on the revenue collection of the state. They have argued that “the black economy results in shortage of resources due to non-payment of taxes and reduction of the effectiveness of the expenditures due to leakages on account of corruption†. (p. 91) They argue that if the black economy could have been dealt with adequately then the Indian economy would not have slowed down during the global financial crisis of 2007-09. Kamal Nayan Kabra, in his essay on the black economy, has also reiterated a similar argument. He says that “despite the role of the political players, the criticality of the corporate entities as the main fountain-head of the illegal-immoral economy remains the main force†. (p. 168) The case of the Commonwealth Games as a specific example of the corporate class and political class conniving to create black money has been discussed by B.P. Mathur.
Two essays, one by Krishna Murari and the other by M.P. Singh and Krishna Murari, discuss the impact of neo-liberalism on the Indian polity. Murari shows through a detailed analysis of specific policies that there has been very little difference between the BJP-led NDA and Congress-led UPA on issues such as privatisation, financial sector reforms, FDI, EXIM and Education. He also shows that the Left parties have moved to the Right and have accepted the Special Economic Zones. This has produced what he calls an “option-less democracy†. (p. 145) Singh and Murari have shown that corruption and criminalisation of politics have made elections an affair of the rich and the powerful. Hence in the 15th Lok Sabha nearly 58 per cent of the MPs are crorepatis (1 crore = 10 million) and nearly 30 per cent of the MPs are accused in criminal cases. (pp. 156-57) The essays argue that while following neo-liberal policies which are not popular with the masses, the political parties have increasingly resorted to money and muscle power in order to win votes.

The contributors, all of whose pieces cannot be discussed in this review, deserve to be congratulated for raising serious questions about India’s “emerging superpower†narrative. This volume certainly adds to the critique of the growth narrative that is emerging in recent times from the works of several scholars, writers, journalists and activists like P. Sainath, Arundhati Roy, Prabhat Patnaik, Pranab Bardhan, Partha Chatterjee, Kalyan Sanyal and others.

Let me end with a question that has plagued me while reading the volume. I am not sure whether India’s sordid story of exploitation, inequality and corruption can be explained only in terms of a specific economic model. Without doubting the role of a certain economic model, I would like to add that there is perhaps a deeper malaise within the culture of the society itself. While the entry of multinational seed companies can be explained in terms of the neo-liberal policies, we cannot quite understand rural exploitation without looking into the culture of the society which discriminates on the basis of caste and gender. Similarly, while neo-liberalism can be blamed for Special Economic Zones and 2G spectrum-like scams, it cannot quite explain the all-pervasive corruption of the rural development schemes and PDS system. While I agree that the political parties are more and more favouring the neo-liberal policies, it does not explain why people go out and vote for crorepati or criminal leaders even after 60 years of democracy. The nineties saw the growth of neo-liberal capitalism but it also saw the rise of Hindutva politics based on hatred of a particular community. Finally, as far as the failure of the state machinery in implementing rural development schemes is concerned, I wonder how far it has something to do with the absence of a culture of efficiency in public administration in India. Both in the pre-reform and the post-reform period “efficiency†has never been important in the discharge of the government’s responsibilities. There is also a remarkable tolerance in the Indian society for such inefficiency; it leads to jokes but hardly ever a serious public outcry.

Perhaps the only silver-lining is that in the new century political parties are increasingly forced to prove their worth in terms of their development achievements and the electorate is showing greater and greater willingness to throw regimes out of power. While this has also produced certain forms of populist politics, there is perhaps a ray of hope that politicians of the country are increasingly forced to perform or perish. Religion or birth in a particular dynasty is no more proving to be a sure trump card in the elections.

The author is a Researcher at the Institute of Social Sciences, Kolkata Centre.