Are we creating a just society? Or an unjust one?
Are we a liberal democracy? A liberal society? Isn’t the Prime Minister confused about subsidies? Indian economy may be growing fast.
But it is still an unjust and an iniquitous economy and society that we are pursuing in India. There are faulty economic policies, especially for the poor sections, for the agri sector and for the villagers. Also, there are faulty social policies.
The government, instead of assuming more responsibilities, seems to be concentrating on some narrow ends like promoting the private sector as led by the big corporations and the MNCs and withdrawing from the public sphere in some critical sectors.
That is why we see a skewed growth instead of our economic growth becoming more dispersed and more regional imbalances becoming more pronounced. Even such questions like the demand for separate states like Vidarbha, Telengana are not conceded. For what valid reasons? For petty narrow partisan reasons only.
A more dispersed growth strategy would call for creating more districts, more communications, more social and physical infrastructure and also more employment generation through unorganised sector small and tiny enterprises.
All these thoughts don’t find any echoes in the speeches of the Prime Minister or other ministers. Most of these ministers seem to be courtiers and they have no empathy with the larger picture that is India’s poor and neglected regions, right?
Is India a liberal state? A liberal society? A welfare state?
Our economy a liberal ,free market economy?
The Prime Minister the other day has given out his thoughts on the current regime of subsidies for various sectors and segments. He was speaking at the Golden Jubilee celebrations of the Institute of Economic Growth. Many readers might not know what this institute does or why it was founded. It was founded in the heydays of planned economy when stalwarts like the late economist V.K.R.V.Rao and others were closely associated with Pandit Nehru. After the Delhi School of Economics( in fact, it was just a post-graduate department of the Delhi university for economics), and sociology was a later addition, Rao, a great institution builder added this institute. I have so many personal associations with these institutes, some of my economist friends, including Prof.Amartya Sen, used to teach there.
The Economic Growth institute, as its name implies, was to focus on economic growth as a focused research area. In fact, when in 1967,the All India Congress Committee, under the very able leadership of Atulya Ghosh as the treasurer of the party called upon some of us, my friends from the Institute of Economic Growth, called me from my remote village(where I was engaged in building a secondary school) to Delhi to write the campaign literature for the 1967 General Elections.
Nehru had gone then, so too I think the other economic planning stalwarts like Rao and Mahalanobis and we, the next generation came together and put up a campaign strategy and literature that if anyone looks into it might show where we were, the Congress party’s think- tanks as such. Whether we were still swayed by Nehruvian Socialist rhetoric or we were under the pressure to drop the word Socialism and go for a sort of welfare state?
I think we were then in the welfare state mode and Gunnar Myrdal’s “Asian Drama” was a sort of bible for us and we were very clear that the state must play the very over-whelming role in directing the economy and the private sector was to play a more increasing role.
It is now clear that India always had a mixed economy, under Nehru, the PSUs were making news and later under Indira Gandhi, it was the more realistic mixed economy and also the private sector that was very much becoming active.
I remember when Indira Gandhi was very much fighting her unsure battle for supremacy in the party, then still dominated by the “Syndicate” of older generation leaders, it was still men like Rajani Patel in Mumbai who used to collect funds for the Congress party elections.
So, very much the welfare programmes, family planning to health and education etc were our campaign themes. My own close friend was a population expert from the Institute of Economic Growth and obviously his views prevailed in drafting the manifesto and the campaign literature.
Now, where does Manmohan Singh come in and what are his views and what weight we can give to them?
As far as I know Manmohan Singh, from my knowledge about him from my Oxford days, are very vague. He never seemed to have had any economic or political views at all. Even you can pin down the views of Sen and Jagadish Bhagwathi, his colleagues at the teaching stage of his career. Soon he joined the government, Indira Gandhi’s establishment, under P.N.Haksar and also he went to the World Bank and IMF etc.
So, he never seemed to have any clear ideological position in economics or in politics. Now, to cut the story short, the present government under his leadership is for all practical purposes are all-out private sector economic reforms. The only constraint for this government is its dependence on the Left support for its reforms. The Left, again, under its own compulsions, after Nandigram and also within the CPI(M)itself, the West Bengal unit would like to fall behind the UPA and allow more reforms. The Central Committee under the leadership of Prakash Karat seems to be playing some election-related rhetoric, its opposition on the Indo-US nuclear deal is clearly a watered-down version and the CPI(M) knows that any of its further destablisation move would cost itself more than harm the prospects of the Congress in the next election.
In this context, some basic questions can be asked for some public clarification.
Is India moving towards an American type capitalist economy? Big corporations(MNCs included)-led faster economic growth? Is the globalisation, another name for the new American domination(American imperialism might be too comical a description)?
Why our leaders are not dwelling on this rather emotionally disturbing theme? Our culture, our consumerism, our lifestyle and our outlook is becoming more materialistic, our nuclear family values are imitative of the Western lifestyle?
These are questions for our leaders to raise and clarify Prime Minister’s job is never a routine one of just sounding relevant and staying relevant for the occasion!
It seems business as usual syndrome for the UPA as it is nearing its term and also calculating the next election game. Let us hope that along with the permutations and combinations of parties and their alliances, the socio-economic compositions of the new generation would throw up some patterns in the emergence of a some rational economic and political belief systems.
No society can hope to hold together and weld the diverse interests into a coherent whole unless there is some articulation of some shared ideas and ideals.
What this new set of ideas and ideals would hold together the new generation of voters? That would be an interesting study for any thinker and intellectual.
Or, has India any different economic growth strategy? From all accounts, India, under Singh & co’s direction, is moving towards a big-industries-led growth strategy only. It is Mukesh Ambani and now, Bharati Mittal types who call the shots, be it SEZs or telecom policy. Economic growth is becoming more focused on what the private sector-led growth prospects are.
What the government does as a matter of economic growth strategy, as far as I can see, amounts to precious little. There is no big disinvestments, no further growth in the banking or the energy sector, the oil companies are incurring heavy losses, the only difference is the private sector Reliance petroleum is setting the agenda, and be it oil drilling or refining or pricing its output in the export markets.
The FDI is a contentious issue with the Left opposing it in some sectors like retail. But this is just a temporary illusion. For the Left have no clear position on the flow of foreign funds into the stock market and the Indian stock market is now attracting huge funds, some “unaccounted” if we can use such a phrase.
FDI is flowing as it would if any country grows fast, right?
The point here is the Left too is confused as to its future ideological positions on various emerging issues.
The critical questions we like to ask are: Is India a liberal democracy? Is India a liberal society? Are we for universal healthcare, as it is being debated in the USA? Are our poor becoming poorer and the rich becoming richer? If so, then in what sense we have to go about reducing the economic inequalities?
The PM is talking about our subsidies are not serving their ends, that is, to end the inequities. But the PM is no guide ,either for the common man or for the elites as to what he intends to do, if he is to cut the subsidies.
We all know this government is a reluctant giver of subsidies, there is strictly no subsidies for the farmers. In the name of food and fertiliser subsidies you are only serving the consumers and that too the urban, well-off consumers and the fertiliser industry.
There is no health insurance worth its name for the poor, the rural poor, for the rural farm sector. All the farmers’s suicides are now left to the fate, there is no clear insurance or credit policy for the debt-ridden farming sector.
So, when the PM bemoans the subsidy regime, he doesn’t clarify why he does so. He seems to be simply talking for the sake of talking, neither he has a clear vision to bridge the urban-rural divide, nor the agriculture vs. industry divide nor he has any clear further forward movement in creating new institutional structures that would safeguard and also secure the vulnerable sections in the regime of faster changes.
Is India a liberal economy?
Is India a liberal economy? Not fully. We are still being a regimented bureaucratic state. Even political parties have become oligarchical family-centered entities. There is no room for free movement within the parties. We seem to be distancing ourselves from the public space, there are no easy entry and exit points in our political space.
There is a distinct perception at the top of our political setup that the inequalities, however glaring, are in some ways inevitable, right? Such economic inequalities, there is the further perception(or you can call this perception born out of sheer plain ignorance of economics and politics!) that such economic inequalities are part of our economic becoming a more globalised and integrated with the outside world.
Then ,what about the free trade? Yes, there are problems here, the WTO talks are important to us, any further concessions to the US farm lobby would antagonise the already “pauperised” more marginal farming community that is unfortunately far too big still, in spite of our complacent approach to economic management.
What about our political choices? Our political choices are played down under the constraint of the economic laws. We have to deny the poor and the weaker sections the many benefits for which they are Constitutionally entitled but they are unable to get for the simple reason the resources at the government disposal are limited.
Our budget doesn’t fully reveal how much we are concealing from the public view for paying for the oil imports, for other development needs, the various special purpose vehicles are meant to keep the budget deficits under the prescribed laws, fiscal responsibility bill and if the poor have to remain poor, then, though not said so openly, then it is their, the sin of the poor only.
Our political choices are limited by our resources constraints and institutional inadequacies.
So much corruption, so much tax evasions and so much crony capitalism!
Unfortunately, our current leadership doesn’t seem to understand the realities of rural India. They don’t understand our agri sector at all. Even now, the current industrial sector scenario, the stock market boom, the inflow of foreign funds, the present regime of subsidies,Rs.7,000 crores loss sustained by the oil companies over fuel import bill etc call for a judicious distribution of subsidies. Now, it looks it is the urban middle class, consumer interests that are uppermost in the mind of the government.
There is a growing distress in the rural segment. Even unemployment is persisting, in spite of the rural employment guarantee scheme.
We need new institutional mechanisms and new employment generation tiny sector industries and non-farm growth strategies.
So, political choices are the choices dictated by the prevailing economic oligarchy only! The middle class is taken care of by various subsidies and it is the poor who are unorganised and who have no voice that is left out. It is in the states we see further proof for the way the poor are “drugged” and kept voiceless through various freebies, free electricity, free land for the landless and free colour TVs etc. Cash compensation in lieu of any institutional safety net comes handy for populist politicians and let us gives the credit for the Congress, the grand old party that is left marginalised progressively in all major states. The poor in the states are taken care of by the regional political parties through their own ‘subsidies” often got as direct transfer of Central funds! Also, through various, often socially undesirable policies to serve the liquor lobby, the tobacco lobby etc.
So, what we know as a liberal democracy in the West might not be relevant here in India. There the society is developed into a culturally advanced, education and awareness of rights are all very advanced there. There, the rights of citizens and the individual liberties are highly valued and sought after. Other civil society organs like a free press and organisations like the courts and other bodies are active in the protection and advancement of individual citizens.
Here there are so many barriers, the principal one being the very ignorance of the politicians and also the very attitudes of politicians. The citizens movements are almost non-existent or very weak.
So, the question and the goal of India becoming a truly liberal society, a liberal democracy is far off.
What we have is still a very much state-directed and state- controlled bureaucracy-driven illiberal society only.
In such a perception, we need more subsidies, more focused on the poor, rather then directed towards the already well-heeled middle class and other professional classes like the government servants and employees in the PSUs..
Even our well-heeled middle class wants education, the IITs and IIMs and the medical education segments wants the state to subsidise so heavily their education just for outward migration only! Thank go our “out sourcing” industry is growing fast and our other segments of the professional middle classes are getting good jobs and salaries and thereby creating a “multiplier effect” on the rest of the economy. That is the only positive outcome of the current economic growth.
Prime Minister talks of inclusive growth. He is either a non-serious man or doesn’t care for communicating the hard truths to his audience. Certainly, he is not comfortable in communicating with the general public. He is a learned man and we recommend to him and to the Indian public a latest economics book. “Super capitalism”. The transformation of business, democracy and everyday life. By Robert B.Reich, Alfred A Knopf. The author is professor of public policy at the University of California; he served as secretary of labour under Clinton. In 2003 he was awarded the prestigious Vaclav Havel Foundation Prize for pioneering work in economic and social thought.
He says that under American style capitalism, it is now globalised financial markets and US style corporate management that pushes for quarterly profits and CEOs are the least concerned about the larger society, social justice or equality etc. He cites data to prove that in unregulated modern societies and economies would only produce high inequalities. He divides the population into five categories, five quintiles, the lowest poor fifth are pressured and left out and the highest well-off fifth grow disproportionately. Hence our news stories of new billionaires and millionaires! Also, the lowest bulk of poor living on less than one dollar a day stories and statistics!
So, the author says concepts like Corporate Social Responsibility (CSR) is only cosmetic, it doesn’t touch the fundamentals of “super capitalism”!
Strong regulations to strengthen democratic institutions, decentralised institutions call for a politically (ideologically) committed leadership. That can come about only through an open and democratically elected leader!