Wednesday, June 20, 2007

A TRAGEDY OF ERRORS - An evolution gone wrong

- An evolution gone wrong
Dipankar Dasgupta
The author is former professor of economics, Indian Statistical Institute, Calcutta

The state of West Bengal is rent apart now by a controversy that does not promise any easy resolution. A deep divide exists between the warring groups and bridging the gap will be as illusive an exercise as discovering the Darwinian missing link.

It is hardly surprising that the Darwin analogy suggests itself in this context. For Darwin was concerned with a theory of evolution. And whether the parties involved in the raging civil war appreciate this fact or not, industrial revival in West Bengal cannot be treated as the construction of a bare superstructure adorning a primarily agrarian society. We are concerned here with the inescapable fact that only a fraction of the eight-crore-strong population of this state can survive on the basis of agriculture. A solid development of industry is a sine qua non for protecting the state from transforming itself into an economic wasteland. Any such development, however, is a process of evolution, involving fundamental changes in ways of life.

In the past, we have discussed in these columns the reasons why agriculture received primacy in the policies followed by the Left when it assumed power. The economic objectives that underlay its agricultural policies, however, have been fulfilled to a large extent insofar as productivity is concerned. If the state has to improve its per capita state domestic product further, as well as retain a healthy growth rate and a meaningful employment scenario, then the scope of economic activities needs to be expanded.

It is not too difficult to appreciate the thrust of the argument posed so far. Indeed, even the so-called opposition camp keeps harping on the theme of West Bengal’s much-needed industrialization. But there are errors that both parties are committing.

Let us begin with the government’s own position regarding the matter. During the first twenty-five years or so of its existence, the Left Front government earned for itself the dubious distinction of being an enemy of industrial capital. Labour militancy, strikes, bandhs and what have you became the hallmark of governance in this state. Even mildly put, and despite the distortions and exaggerations in many of the stories that circulated about West Bengal in the rest of the country, there was an undeniable truth in the industrialists’ perception of West Bengal as an unfriendly destination.

Children in the state were introduced to Marxist principles right from their cradles, with the result that Das Kapital turned into a household expression and the majority of the populace of the state “graduated” into self-proclaimed expositors of Marxian economics concerning the alienation of producers from ownership of the means of production and the extraction of surplus value by evil capitalists.

In the meantime, agriculture thrived and the economy, whatever the Left Front’s detractors felt, managed to display a reasonable growth rate of per capita output. Over time though, the size of the population grew and the inevitable realization dawned that outside the sphere of agriculture, “party work” alone could not define a sustainable occupation for the Marxists. Consequently, industry was recalled. Even if the present chief minister is credited with initiating this drive, it is likely that the soul-searching process started well before he was anointed successor to the master.

A confidence-building exercise, or, bluntly put, a metamorphosis was therefore in order. The image of capital-hatred needed total transformation into one of capital-adoration and that too at reasonably short notice, for the growth drama was well in progress all across the country. Capital had to be wooed now and there being nothing fair or foul in love and war, we decided to bend over backwards with whispering humbleness and cater to the whims of the Tatas. One does not know therefore why the farmlands of Singur were the only acceptable venue for the Tata venture. The Tatas wanted it — so it was written and so it was done!

Compensations were doled out, needless to say, to the farmers who lost their land willingly or unwillingly, but the principles governing the calculation of land price remained a closely guarded secret. The same scenario was prepared for Nandigram. Only, the farmers there, either on their own or aided and abetted by the opposition, revolted and we are aware of the fiasco that ensued. Later on, of course, sense dawned and the Jindal package in Shalboni tried to address the concerns of the displaced farmers.

The gaping hole in the government’s approach to the industrialization issue lay in the fact that a person traditionally accustomed to tilling the land could not be lured to embrace an alternative means of livelihood merely with the aid of a lump sum compensation money. The all-important question that remained unanswered was how he would use his financial wealth. Clearly, the handful of factories that would be mushrooming in the state at the incipient stage of industrialization would not be able to provide employment for the entire landless work force. Some, for sure, would be absorbed after a training period. What, however, would the rest be doing?

It is precisely here that no homework was done by the government, preoccupied as it was with its love affair with capitalists. The problem obviously is that an industrialized society supports livelihoods that have little to do with a farmer’s accustomed occupations. To be a part of the newly emerging society, one has to set up shop, so to speak, and integrate oneself with the needs of a new world. One hears, of course, of ancillary industries, of agro-based industries and so on, but the details of such suggestions are not available. Short of Moses-style miracles, few human beings would be prepared to accept the vague prospect of a promised land unless he is assured of a foothold in the immediate future. And immediate means tomorrow, that is, the day following the one on which he hands over of his plot of land.

What is missing in this confusing scenario is an institution such as Mohammed Yunus’s Grameen Bank, which had agents visiting its beneficiaries on a daily basis to keep track of the way they were using their money as well as to impart entrepreneurial skills and information regarding opportunities. Jyoti Basu’s recent statements refer to an exercise being worked out by the industry minister aimed at rehabilitation of the displaced and one hopes that, even if belated, something in the nature of the Yunus model is being contemplated.

So much for the government’s errors. Going over to the opposition now, it is not difficult to grasp its motives. For all practical purposes, it had been wiped out at the general polls. Pirandello-style, it was literally reduced to a handful of characters in search of a cause. Luckily enough, the cause was handed over to it on a platter as it were by the Marxists, who forgot in the midst of their confabulations with the Tatas, Salems and others that it would take them far longer to build up an industrial base than it did to destroy it. Quite clearly, the opposition does not have a single piece of feasible or constructive proposal for economic development of the state. Its one-point agenda that land should not be snatched away from unwilling farmers, however people-friendly this may sound, is as erroneous as the government’s overnight industrialization dream. If industrialization succeeds in Singur, a possibility the opposition dreads, the farmers themselves would not wish to continue as farmers. Farmers holding on to scattered plots of agricultural land in an industrial hub will be reduced to Robinson Crusoes, desperately waiting for a serendipitous journey back to civilization. Given the track record of the leaders of the opposition, however, it seems unlikely that anyone amongst them would be in command of that rescue ship.