A Frontier Editorial | Vol. 50, No.25, Dec 24 – 30, 2017
Persons in power had been boasting about India’s high rate of growth in terms of the GDP. Now the fall in the rate of growth is being highlighted, while the official spokesmen are dishing out the hope, somewhat against hope that the rate of growth will soon pick up.
For one thing the impact of the global recession on the Indian economy was not negligible. The Indian economy was, however, not as much export-oriented as that of China. This was not due to the perspicacity of India’s policy makers but to popular struggles of varying forms and degrees, which prevented the ruling authorities from implementing full-scale globalisation. Recently, however, Narendra Modi’s demonetisation move has had a debilitating impact, particularly on the informal sector of the economy, besides causing immense harassment to the common money-using public. The fact that 99% of the demonetised cash returned to the baking system bears testimony to the fact that the so-called campaign against black money is a big failure, if not a big bluff. Demonetisation coupled with Goods and Services Tax (GST) has slowed down the rate of growth of the GDP; on this there can be no disagreement. The twin evils seem to have hastened the process of decline of the manufacturing sector that grew by just 1.2 percent in the first quarter in 2017-18, as compared to 5.3 percent in the preceding quarter in 2016-17.
There is however a big-snag in the whole discourse. When India was projected as the fastest growing economy in the world, how did the rate of employment grow? Besides, did the extent of inequality fall, rise or remain stationary? Had there been no demonetisation, would the state of the economy have improved in these respects?
On these issues, very little discussion has taken place so far. The present ruling dispensation tries to assure the people that India will soon overcome its present crisis and become the fastest growing economy of the world. But who has so long benefited from this fast growth is a question it has preferred to avoid. Trillions of rupees of unpaid bank loans continue to cripple the economy and the major debtors, namely the corporate houses, are moving around happily, probably assured that they will not have to repay these loans. In terms of human development index, India now ranks extremely low; in respect of some of its parameters India lags behind even her neighbour, Bangladesh, which entered the development stage much later as a blood-drenched country. Besides, there is the frightening revelation that in present-day India, income inequality is greater than that prevailing in the days of the British Raj. It is learnt from the painstaking research work done by Thomas Pickety and Lucas Chancel that during the period from 1980 to 2014, the top 10% of the Indian population managed to corner 66% of the increase in national income.
The UPA regime introduced a programme called NREGP (National Rural Employment Guarantee Programme), which stipulated the provision of at least 100 days’ work for each rural able-bodied person. The regime that succeeded the UPA has, however, been constantly maintaining that the NREGP is an evil and the money allocated for it may be used elsewhere. The suggestion that is implicit in recommending the abolition of the NREGP is that the money thus saved should be used to give concessions to the corporate tycoons, who will produce goods necessary for the top 10 to 20% of the population, with highly capital-intensive techniques of production everywhere. This simply means that more and more workers will be thrown out of organised sector and be employed in the informal sector at low wages and without any social security. Even white collar jobs are vanishing. YES Bank has eliminated about 2500 jobs, more than 10 percent of its workforce. Earlier, HDFC Bank had cut its workforce by 11,000 employees over three quarters up to March 2017. By the end of the financial year 2017-18 the number of unemployed in India would be around 1.8 crore as per ILO report.
Growth and development are not the same things. In a really democratic state, every citizen has the right to quality education, health care and minimum nutrition. When access to education and health care becomes a function of income and wealth, democracy becomes a useless term. Government-run hospitals cannot provide the necessary medicine. Doctors write prescriptions and recommend various tests; medicines have to be purchased from nearby shops and tests done at diagnostic centres at considerable expenses that a large number of people cannot easily afford. And everywhere one would see English medium schools with high tuition fees operating side by side with state-sponsored schools. The quality of education imparted in state-run schools is abysmally low. Democracy without education is hypocrisy without limitation.
Removal of these anomalies requires a thoroughgoing structural reform aimed at finding out a path of development that is an alternative to the corporate and multinational-led, inequality-accentuating growth path. Whether the rate of growth of GDP is high or low is not of much relevance here. What is more relevant is whether the growth path will raise productive employment, provide more incomes to the bottom sections of the people, enlarge the domestic market for consumption of goods, and ensure a more or less equitable access to education and health care. People in many places resist, consciously or unconsciously, the implementation of the pro-corporate policy of development, but pro-people activists all over the country do not seem to have paid enough attention to an alternative line of development suggested by Professor Amit Bhaduri a few years ago. Yet this is the need of the hour.