‘Improving Every
Indian’s Life Must
be the Goal, Not Just
GDP Growth’
Below we reproduce the text of the speech
delivered by Tripura chief minister and
CPI(M) Polit Bureau member Manik Sarkar at the 56th meeting of the National
Development Council held in New Delhi on October 22, 2011 to discuss the
Approach to the Twelfth Five Year Plan.
AS we discuss the Approach Paper to the Twelfth
Five Year Plan, we should be aware of a major milestone that we have just
crossed, namely the completion of sixty years of planning in our country. Sixty
years is a long time in the life of a nation, long enough to warrant our taking
stock of the achievements of planning over this entire period. While there has
undoubtedly been much increase in the size of our per capita gross domestic
product (GDP) over this period, which is in sharp contrast to the last
half-century of colonial rule, on the basic task of building a nation where
each citizen is assured a minimum standard of life, where the gap between the
rich and the poor does not widen over time, and where everybody feels a sense
of belonging, our Plans have been a conspicuous failure.
This failure had already become apparent by the
end of the 1950s, which is why a committee was set up by the then prime
minister Jawaharlal Nehru in 1960 under the chairmanship of Professor P C
Mahalanobis to go into the issue of “distribution of income and levels of
living” and examine who had been the beneficiaries of the first two Plans. The
committee submitted its report in 1964 and observed that “planned economy
encouraged the process of concentration by facilitating and aiding the growth
of Big Business”. For the planners of that time, “aiding the growth of Big Business”
was a matter of concern; but, for contemporary planning, it has become not only
desirable policy, but one deserving the highest national priority. This shift,
which is the essence of our turn to neo-liberal policy, is justified in the
name of increasing the growth rate of GDP. And it undoubtedly has ushered in an
increase in the growth rate of the GDP compared to the pre-liberalisation
period; but the gap between the rich and the poor has widened even more sharply
under neo-liberalism, to a point where India is now home both to the most
malnourished people in the world, even more so than Sub-Saharan Africa, and to
some of the world’s richest billionaires. In fact, it is no longer a matter of
just widening gaps. There is a process of absolute economic impoverishment
going on which is as striking as it is dangerous for the future of our society
and polity.
CONTINUING THE FLAWED STRATEGY
The Planning Commission’s “poverty line”, which
has been much in the news lately, obscures this process of absolute economic
impoverishment. But if we take the
proportion of population accessing less than 2200 calories per person per day
in rural areas and 2100 calories per person per day in urban areas -- which
still constitute the official benchmarks for poverty, accepted even by the
Planning Commission -- we find that in 2004-05 the figures were 69 per cent and
64.5 per cent respectively. In 2009-10, the latest year of large sample NSS,
the figures have increased to 76 per cent and 68 per cent respectively. Thus on
the most elemental criterion and on the basis of the most authoritative
official data, we find incontrovertible evidence of an increase in the
incidence of poverty in the most recent period. It is exceedingly difficult for
any nation to hold together in the face of such a sharply accentuating internal
dichotomy. This constitutes our most urgent problem today and one would have
expected the Approach Paper to the Twelfth Five Year plan to do some
introspection in this regard, to discuss how this accentuating dichotomy could
be rectified. Instead we find the Approach Paper’s strategy being a mere
continuation of what has gone on before. Like the Eleventh Plan, it also talks
of “inclusive growth”, but since the above-mentioned increase in poverty
occurred precisely during the period of the Eleventh Plan, when growth was
supposed to have been “inclusive”, the continuation of the earlier strategy
clearly would compound the problem instead of providing a solution. The
Approach Paper’s basic strategy in short continues to be a flawed one.
There is an additional problem. The Twelfth Five
Year Plan is being launched at a time when the world capitalist economy is
caught in an acute crisis, of which no end is in sight. Meaningful planning
requires what Professor Amartya Sen has called a “control area”, over which the
planners have some control and hence a reasonable chance of ensuring that the
objectives and achievements of the plan can converge. The insulation of the
national economy, over which planning is being done, from unplanned shocks
emanating from the world economy is a condition for such a “control area” to
materialise. Even when there is no actual insulation, if no major unplanned
shocks are likely to emanate, then too there may be scope for meaningful
planning. But given the acute capitalist crisis, actual unplanned shocks from
the world economy are bound to come our way, which makes this planning exercise
tenuous. In this backdrop, under the
neo-liberal regime, India is closely integrated with the capitalist world,
which places the entire Twelfth Plan exercise on an extremely shaky foundation.
For instance, the rupee has been sliding down
against the US dollar for some time now, because of the predilections of
globalised finance capital. This, by raising the rupee costs of imported goods,
has contributed to the inflationary pressures in our economy, given the central
government’s totally erroneous policy of “passing on” the costs of imported oil
to the domestic users of petro-products. Now, with the Eurozone crisis getting
intensified and the Euro getting increasingly weakened, there is likely to be a
“flight to the dollar” which will further strengthen the dollar against the
rupee and aggravate our domestic inflationary pressures, undermining whatever
prospects of “inclusiveness” that the Approach Paper holds out before the
people.
INFLATION AND FOOD SECURITY
The current inflation is a worldwide phenomenon,
especially in the capitalist economy. To
say this is not to suggest that nothing can be done about inflation. On the
contrary, it can be effectively countered within the country, but through an
altogether different set of measures. What it requires is a degree of
insulation from the world economy on the one hand, and supply management,
including the provision of essential commodities at fixed and affordable prices
through the public distribution system to everybody, without distinction
between APL and BPL, on the other.
The Planning Commission has now announced that
benefits will no longer be linked in future to the poverty line estimated by
it, and that the “priority group” of beneficiaries will be selected on the
basis of the socio-economic caste census that is currently underway. The census
itself, of course, cannot determine who is poor; so the criterion for selecting
the “priority group” will simply be so fixed that this group comes to a
pre-determined percentage of the population. This is the logic of the draft
food security legislation: it fixes beforehand what percentage of the
population should constitute the “priority group”. This so-called “priority
group” however is nothing else but a revival of the BPL-APL distinction in a
new form. True, the percentage of population constituting “priority group” will
be larger than what has hitherto been counted as BPL, but if the so-called
“poverty line” of the Planning Commission makes little sense, then an
arbitrarily pre-determined ratio of the poor (even if re-christened as
“priority group”) makes even less sense. The only way that every Indian can be
assured of a minimum living standard is to have universal public distribution
of essential commodities at fixed affordable prices, universal healthcare,
universal education at least up to a certain level, and universal employment
guarantee. The de-linking of benefits from the Planning Commission’s “poverty
line” must entail, to start with, a universal provision to the entire
population of all those benefits which are currently available to the BPL
population. And together with this there must be an Urban Employment Guarantee
Scheme run by the centre on lines similar to the MGNREGS, as a rights-based
programme. The basket of commodities covered under the universal PDS and also
the scope of the Employment Guarantee Schemes will have to be enlarged.
To sustain and further strengthen and widen the
scope of a universal PDS, the requisite supply management will have to
encompass a stepping up of agricultural growth, including especially the growth
rate of foodgrains production. This requires a whole set of measures whose
essence is a re-engagement of the State in a supporting and protecting role
vis-Ã -vis the peasantry, and hence a reversal of what has occurred under the
neo-liberal dispensation when the State abandoned such a role. This no doubt
will yield results in the medium term, but, given the fact that there are 60
million tonnes of foodgrain stocks with the government right now, well in
excess of the “normal” level, and that the 2010-11 foodgrain harvest has been a
bumper one according to the Approach Paper, increased public provisioning of
essential items at fixed prices through the PDS can start right now. The fiscal
burden arising on account of it is perfectly manageable, especially if the
government resists its temptation to provide favours to the big corporate and
financial interests, and gets them to contribute more towards tax revenue.
AGGRAVATED POVERTY
The commodity price increase that has occurred
has hardly brought much prosperity to the petty commodity producers, but those
of them who have to buy their food requirements from the market have been
squeezed by the inflation in food prices. Other labouring classes and middle
class employees, whose money incomes are not indexed to prices, have of course
been its special victims. Even apart from the rise in the price index, there
has been a process of dismantling of public services, forcing people to turn to
private service providers and pay much higher prices. The net result of all
these, as we saw above, has been a remarkable increase in poverty precisely
during the eleventh plan period when “inclusive growth” was the plan objective!
The increase in poverty, defined in elemental
nutritional terms, must not just be attributed to the crisis of the capitalist
world. It had been occurring long before that crisis hit. Per capita food
availability for the country as a whole, which had risen until the end of the
eighties to roughly 180 kilogrammes per year, first stagnated and then came
down precipitously during the period of neo-liberal reforms, reaching around
165 tonnes by 2008, even before the capitalist crisis. This decline is on
account of the flawed trajectory of development that the country has been
following under the neo-liberal dispensation, where the emphasis on GDP growth
has been accompanied, as already mentioned, by a withdrawal of State support
and protection from petty production, including peasant agriculture. This has
meant not only a sectoral imbalance, between agriculture and other sectors, but
a social imbalance, between the bulk of the working population on the one hand
and the corporate and financial interests, together with their satellite
groups, on the other. It is this which explains aggravated poverty under the
neo-liberal dispensation.
This imbalance, producing aggravated poverty,
was sought to be justified in the beginning by invoking a “trickle down”
effect. But the emptiness of that argument was recognised in the Eleventh Plan
document which still made GDP growth the main objective of planning, but no
longer on the earlier argument that its effects would automatically “trickle
down” to the poor; instead it advanced a new argument to the effect that with a
high GDP growth it becomes possible, through State intervention, to lift the
condition of the poor. Its slogan of “inclusive growth” aimed as before at a
high GDP growth rate, but postulated in addition that the State should take
away a part of this growing GDP to provide for the poor. To focus on this
particular role, of taking resources away to cater to the needs of the poor,
the Eleventh Plan suggested that the State should off-load some of its
responsibilities in other sectors like infrastructure to the private sector,
through Public-Private-Partnerships (PPP). But if “trickle down” had not worked
earlier, “inclusive growth” too has been a failure.
This is to be expected: if the growth process
itself is poverty-engendering, because of the squeeze it puts on petty
producers and the entire work-force dependent upon them, then State
intervention can negate its effects only partially but not completely. The very
factor that makes the growth process poverty-engendering, namely the influence
on the State apparatus of the corporate and financial interests who use it
under neo-liberalism to enrich themselves at the expense of the vast mass of
the working people, also negates the State’s ability and willingness to reverse
this very process through fiscal intervention. The manifestations of this
inability and unwillingness can be seen from the fact that the instrument
chosen for affecting “inclusiveness” was a blunt one.
According to the understanding of the planners,
the chief means through which “inclusiveness” was to be affected consisted of a
set of centrally-sponsored schemes. These were of the “one-size-fits-all”
variety, with no variations permitted for taking into account the specificities
of the problems of different states. And each scheme demanded a contribution
from the state governments, whose share was arbitrarily fixed by the centre and
altered at its whim. The states from the
very beginning had been opposed to centrally-sponsored schemes, wanting instead
a transfer of the amounts to themselves to launch schemes in accordance to
their specific needs and priorities. The
centre not only systematically resisted this, but consistently undermined even
such schemes as it introduced unilaterally, by making impossible and
arbitrarily increasing demands for concurrent contributions from states. Thus
the centre decreed an increase in the states’ contribution towards the Sarva
Shiksha Abhiyan, despite a unanimous request from chief ministers at a meeting
of the National Development Council not to do so. The Right to Education
programme has been effectively dented by the centre’s refusal to transfer
adequate resources to the states for implementing it. This arbitrary approach
of the centre needs be changed to give flexibility to the states.
ALTERNATIVE
GROWTH STRATEGY
This poverty-engendering growth strategy itself
must be abandoned in favour of an alternative strategy, which places the growth
of agriculture, especially foodgrains, through State support to the peasantry,
at its centre. The neo-liberal strategy talks of the importance of export
markets. But a revival of peasant agriculture expands the domestic market; and
the effect of this increase in the domestic market that includes millions of
people is far greater than anything the country can hope to achieve in the
international arena. The perspective of export-led growth through an open
economy that underlies neo-liberalism, has to be replaced by an alternative
perspective of growth sustained by an increase in the domestic market through a
State-supported expansion of peasant agricultural output. In the latter
scenario, not only can the economy be insulated against external shocks
emanating from a crisis-ridden world capitalism, and planning acquires
meaningfulness through the cordoning off of an appropriate “control area”, but
the incomes of vast masses of working people, both peasants and agricultural
labourers, can increase, and workers and employees in the non-agricultural
sector can be protected against the ravages of inflation in food prices. The
provision of cheap credit, of subsidised material inputs, of extension
services, of State-initiated R&D support, and of assured remunerative
prices, together with the introduction of land reforms, to break land
concentration and distribute land among the landless, will have to be the
central elements of this alternative growth strategy. It will run counter to
the current trend of distressed peasants flocking to urban centres in search of
non-existent work, and being forced to become part of the reserve army of
labour; it will also entail a reversal of the current trend of dispossession of
land from the peasantry in the name of “development” which leaves the
dispossessed without adequate livelihood options.
A re-emphasis on the growth of peasant
agriculture, as distinct from corporate agriculture, will also enlarge
employment opportunities for the vast number of working people, unlike the
current growth strategy. Of course, the unemployed and the underemployed cannot
be made to wait for an increase in employment opportunities. They have to be
provided work immediately, for which, as I have already mentioned, an Urban
Employment Guarantee Scheme, to complement the MGNREGS, must be put in place
immediately, and the scope of both Schemes expanded to make the right to
employment a universal reality.
Together with emphasis on agriculture and the
realisation of universal right to employment, there has to be a universal right
to healthcare and education, at least up to a certain level. The neo-liberal
strategy of development which permeates the Approach Paper to the Twelfth Plan
aims at a commoditisation of education and healthcare, with the State coming in
at best to support a target group, defined on certain criteria, with cash
assistance. This is a completely misconceived strategy for a number of reasons.
First, any targeting, given the extraordinary levels of deprivation in India,
necessarily leaves out significant sections of the poor from its ambit. The
only practical way of covering the deprived is a universal system from which
the non-deserving rich will automatically opt out in any case. Second, any
scheme of cash assistance provides an incentive to the private service
providers to put up the prices of the services they provide. No attempt by the
State to control these prices can possibly succeed, unless the State is itself
in a position to provide these services through State-run institutions. And for
an adequate numbers of State-run institutions to be there, the State has to
play the primary role as service provider in these crucial areas of human
resource development. Third, when it comes to education, we cannot overlook the
important bearing it has on the whole project of nation-building, in creating a
society that is free of patriarchy, caste and gender oppression and extreme
inequalities. Commoditisation of education militates against these objectives,
whose abandonment is tantamount to a flouting of the Constitutional mandate of
the government. Hence there has to be a massive effort on the part of the
State, primarily through its own institutions, to provide universal healthcare
and education up to a certain level.
Likewise, there has to be universal provision by
the State of potable drinking water. Privatisation of drinking water will price
out the poor from this elemental necessity of life. Hence this must be a part
of the services made available by the State free of charge, but through a
system of rationing if need be. (Where a price is already being charged it must
be kept low with an adequate subsidy). The central government must have a
scheme for immediate universal provision of drinking water.
The other area crying out for attention is
housing. The current housing scheme “Indira Awas Yojana” is woefully inadequate
both in its coverage and in the amount of money it makes available to the
beneficiary households. State governments lack resources to implement housing programmes
of adequate coverage, which provide adequate funds to the beneficiaries for
decent housing; and the Planning Commission has been opposed to the idea of
states making advance claims on the IAY funds due to them. Under these
circumstances a scheme for universal and decent housing for deprived households
must be formulated by the centre to eradicate homelessness completely within
the Twelfth Plan period.
In addition to the above proposals, a special
package has to be worked out for the SC/ST, OBC and minority households, not
just religious minorities but other minorities as well. At present the only
special benefit they get is through reservations and that too in the public
sector. With the weight of the public sector declining in the economy, the benefit
of reservation too is declining; and minorities, including even religious
minorities, are deprived of these benefits in most states. Reservations must be
extended to the private sector, including private educational establishments,
and must be made available to minorities that suffer from socio-economic
deprivation. But over and above reservations, there has to be a special package
of assistance, so that these beneficiary groups can, among other things,
benefit from the reservation policy itself.
PROBLEMS OF THE NORTH-EAST
The development strategy being pursued in the
country at present also has the effect of widening regional inequalities. This
is especially apparent with respect to the north-eastern region of the country,
which continues to remain in a state of abject poverty and deprivation. The
region suffers from an absence of infrastructure, meagreness of employment
opportunities, underdevelopment of educational institutions, and a lack of
diversification of economic activities. Not surprisingly, it has become an easy
prey for secessionist and terrorist groups. The PPP route favoured by the
Planning Commission for initiating investment projects is almost entirely
irrelevant in this region, since very few investors are willing to come forward
to invest, except with subsidies that are so large that the very rationale of
PPP, namely, the need to supplement inadequate State resources by private
funds, gets defeated. Even when the state governments take the initiative to
develop some institutions with their own resources, there is usually a shortage
of personnel for running them, since very few persons are willing to remain in
the North-East, sacrificing careers in the metropolises or in the
non-metropolitan heartland of the country. A number of steps need to be taken
to overcome the problems of the north-eastern region, without which our very
integrity as a nation will get threatened. I shall briefly mention some of
them.
There is one problem which is common to all
small states, including those in the North East, of which Tripura has been a
special victim. Any state, no matter how
small, must have a minimum administrative structure which constitutes a fixed
cost from its point of view. Smaller states therefore have a higher fixed cost
per capita. When there are revisions of salary structure in tandem with Central
Pay Commission recommendations, which the state governments are more or less
obliged to follow if they are to avoid the invidiousness of unequal pay for de
facto equal work, the fiscal burden for a small state increases to a far
greater extent than for a larger state, even if the two have the same per
capita income. Unless some allowance is made for this fact in determining the
magnitude of resource devolution to states, which unfortunately the Thirteenth
Finance Commission, using its so-called “normative approach”, has not made,
states like Tripura suffer. For such small states, where Pay Commission-related
expenditures impose a heavy fiscal burden and eat into Plan funds, enhanced
Special Plan Assistance must be provided, for which a request has already been
made by me to the honourable prime minister.
I would request that follow-up action on the request made by me may be
taken by the central government at the earliest. In our federal polity while a
state faces problem whatsoever whom it should approach and ask for help other
than the central government?
Almost all the north-eastern states suffer from
the problem of insurgency and have to undertake substantial expenditure out of
their own resources for countering insurgency. This leaves less resources for
expenditure on people’s welfare, which in turn contributes further to
nourishing insurgency. Leaving insurgency-affected states to fend for
themselves, which has been the practice till now, especially when the
insurgency is latent as in Tripura, is totally counter-productive. Particularly
and specially, the recurring expenditure undertaken for countering insurgency,
therefore, must be shared between the centre and the concerned state in the ratio
of 90:10, even when this insurgency itself may have become latent.
STEPS REQUIRED
Starting institutions for higher education
requires heavy construction costs. Such costs are beyond the capacity of the
state governments of the North East in view of their resource constraints, and
PPP, as already mentioned, is entirely inadequate for the purpose. But starting
such institutions is absolutely necessary. In Tripura, for instance, our very
success in spreading school education now makes the starting of institutions of
higher education a matter of urgent priority. The centre must therefore take
the responsibility of starting such institutions, particularly the technical
institutions, in the north-eastern states.
Central government agencies like the Airport
Authority of India, and even the Railways, which make handsome profits and
which should be using these profits to cross-subsidise investment for meeting
the infrastructure needs of backward states, tend instead to make states
compete against one another in giving concessions to them, and invest where
they get maximum concessions. This crude “capitalist” behaviour is against the
logic of the public sector itself, and negates “inclusiveness”. This must stop,
and government agencies must be enjoined to pay heed to the needs of backward
states, especially those of the North East, whose connectivity with the rest of
the country is as important for them as it is for the country as a whole.
Connectivity must include above all an adequate
communication network in north-eastern states, which is currently very poor.
Even the internet connectivity that exists at present is woefully inadequate.
The centre must develop a communication package for the north-eastern states,
without which there will be little possibility even of attracting investment to
the region.
Connectivity also requires adequate road links
to the scattered hamlets in the region. The Prime Minister’s Grameen Sadak
Yojana as it stands now provides for connectivity to villages with a minimum
population of five hundred. This minimum must be brought down to one hundred,
so that tribal hamlets, which dot the entire North East and which typically
have less than five hundred inhabitants, get road connectivity.
The North East being properly connected with the
rest of the country is only a necessary condition for its development, but by
no means a sufficient condition. A development package covering industry,
tourism and other promising sectors and outlining concrete steps that must be
taken to give a boost to these sectors must be prepared by the centre in
consultation with the north-eastern states. The economies of most of these
states are already linked to those of the neighbouring countries, and the
region will stand to gain greatly if these links are further strengthened.
Tourism in the region for instance will get a big boost if tourist packages
could be devised covering both, the states in the region and some neighbouring
countries. For all this however, close and friendly relations with the neighbouring
countries are essential. The need for such relations for the purpose of
security is often readily appreciated; the need is equally great for the
purpose of development too.
Notwithstanding severe constraints Tripura has
taken significant steps to ameliorate distress in its largely poverty-ridden
population. It has been providing a minimum amount of homestead land to every
landless household in the state in a systematic manner. It has given rights
over forest land to the tribal population. It has introduced an Urban
Employment Guarantee Scheme, and it has vigorously implemented MGNREGS as well
as Sarva Shiksha Abhiyan. It is because of these measures that the problem of
insurgency that was so acute at one time has abated somewhat in recent years.
But to sustain these initiatives, the central government has to come forward
with a number of steps. Some of these, in addition to those listed above, are
the following:
(i) In Tripura a significant non-tribal
population has also occupied forest land for long, though under the existing
legislation it is denied rights over this land. It must be given legal rights.
The central government must take immediate steps in this regard. (ii) The
tribal population which has obtained rights over land needs financial assistance
for undertaking proper economic activities, obviously, of course, including
cultivation. This assistance cannot be provided through MGNREGS; and the state
government’s capacity in this regard is limited. The central government must
therefore formulate a scheme for providing such assistance. (iii) I have
mentioned above the need for a scheme that ensures universal and decent
housing. As a first step towards this end, the Indira Awas Yojana must be made
applicable to all SC/ST, OBC, Minorities and marginal households. They must be
provided with subsidised and decent housing. (iv) The Rashtriya Krishi Vikas
Yojana currently imposes “conditionalities” for eligibility for assistance, by
way of minimum ratios for agriculture in state plan outlays. These, no matter
how reasonable they may appear at first sight, are fraught, as experience has
shown, with major problems of definition and classification. RKVY funds must
therefore be made available without any “strings”.
Planning in India has come to be identified
exclusively with the promotion of GDP growth rate, and, towards this end, the
handing out of concessions to the private corporate sector and the financial
interests, which are supposed to be the main agencies for effecting higher
growth. This growth, by its very nature, is not only poverty-engendering, but
also restricts the “inclusiveness” which the Eleventh Plan believed that fiscal
intervention would achieve in the wake of higher growth. The Approach Paper to
the Twelfth Plan has gone a step further and now wants to induct the private
corporate sector even into the task of achieving “inclusiveness”, which only
underscores the hollowness of its conception. It is time that the planners
began “at the other end”, making the provision of a minimum standard of living
to every Indian the direct and proximate objective of the plan rather than the
growth rate, and worked out and arranged for the resources required for it.
The logic of such an alternative approach, as I
have argued, will necessarily lead to a development strategy different from
what the country has been pursuing under neo-liberalism. A minimum standard of
life for everyone is incompatible with the poverty-engendering growth process
that neo-liberalism unleashes. To ensure a minimum for everyone, we shall have
to develop agriculture, introduce proper land distribution, revamp the public
sector, and abjure the huge fiscal concessions that have been given out to the
rich in recent years. But, even if the union government does not immediately
accept my argument for an alternative development strategy, let us at least
agree to provide a minimum standard of life to every Indian, and let the
Twelfth Plan take concrete steps towards this. If planning aims at ensuring
such a minimum living standard for every Indian we would have made a genuinely
new beginning and fulfilled the promise of our independence.
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