Monday, April 27, 2009

The State And Its Step Children

India’s industrialisation has played havoc with its poor. An alternative suggests steps for inclusive growth



One of the most influential philosophers of the twentieth century, Wittgenstein warned us how language can mislead and trap our thoughts. We are reminded far too often of this warning when we are dubbed as anti-development, antiindustrialisation, romantic environmentalists, because in most people’s mind, industrialisation conjures the image of sophisticated manufactured goods, highly mechanised heavy industries, large IT parks with imposing infrastructure or world class cities, airports and luxury apartments. While the toiling masses seldom figure in this image, the beneficiaries do, as the rich consumers of these goods and the relatively fortunate skilled workers who are absorbed in these enterprises.

We have aimed at this form of industrialisation since Independence and have switched to a fast track in recent decades. And yet, India has remained an overwhelmingly ‘poor’ country. Three out of four Indians have a purchasing power of not more than Rs 20 per day. At the same time, a large percentage of our population still lives on common natural resources like land, water, rivers, forest and fish. Their vast manpower receives neither value nor value additions for their ‘natural’ yet critical investment. If we have to think of industrialisation in democratic India, we cannot simply ignore this majority of our citizenry and their potential. The right question to ask, therefore, is not whether to industrialise or not, but industrialise for whom and how?


This question explains why tensions over policies of land acquisition and displacement in the name of industrialisation, Special Economic Zones or mining are gathering furious momentum across the country. Those who are dispossessed hardly figure as direct and major beneficiaries of industrialisation, and yet, they bear a disproportionate burden. Although dalits and adivasis, the poorest and most oppressed, constitute about one fourth of the population, they are estimated as more than half of the people dispossessed of their land, livelihood and habitats. It is said that capitalism is a process of ‘creative destruction.’ When destruction systematically targets the poor and their life-supporting natural resource base only to create wealth for the rich, the dispossessed see no possibility of benefiting from industrialisation for generations, and the process is resisted. ‘Industrialisation’ has come to conjure images of world class cities where toiling masses seldom figure

Today, the sign of destruction looms nowhere larger than in agriculture. India is dying rather than living in her villages. A farmer commits suicide every 30 minutes. The extremist political resistance has gained ground at least in one fourth of the landmass at the very heart of the country. Millions who are in these local struggles and peoples’ movements, over apparently diverse yet linked issues, are beginning to shape a new politics. All natural resources such as land, water, forest, including private property and that which used to be common property indispensable for people’s survival, are being forcibly acquired by the state to be handed over to the Tatas, the Ambanis, POSCO, Coca-Cola, mining giants and others. This is often under the veil of non-transparent deals. When recently the Gram Sabha in Kathikund, Jharkhand refused to hand over land in the name of development, two adivasis were killed in a police firing. Others were wounded and jailed. The systematic onslaught by liberalisation, privatisation and globalisation is being reinforced by the direct violence of the State to dispossess millions who live traditionally on a natural resource base. These poor populations are now condemned and continuously bulldozed for being poor in the name of some ‘illegality’ or ‘encroachment’ defined by the expropriators themselves. This results in the abandoning of existing rural forms of ‘manufacturing,’ including agriculture, horticulture, pisiculture, cottage and small scale industries. If we want to understand the motive for such dogmatic discrimination, it has to be linked to the process by which India created so many billionaires so swiftly, with political corruption in high places.


India, we are told, is a winner in the global economic race, which is being propelled by money and a market economy. A large section of our agrarian economy is unable to participate effectively in it; instead they are literally looted in a game with unfamiliar rules. Industrialisation is exceptionally generous to a small minority that is accumulating enormous wealth and buying and taking over communities, even civilisations. The victims are marginalised, left illiterate and undernourished, dispossessed of resources and any steady source of livelihood. At the most, some of the victims will live on bureaucratic charity, supported by meagre social security and an employment guarantee for 100 out of 365 days, which seldom creates productive capital. They would be incapable of participating — let alone competing — in the global market.


An alternative has emerged, and peoples’ movements need to crystallise around it. It could turn our weakness into a strength by starting at the most vulnerable points of our economy. The alternative way of industrialising would involve the poor and illiterate, who constitute the skilled and semi-skilled labour force, in their traditional environment. Through a productive full-employment programme, they could become a propelling force for the creation and distribution of wealth. Existing livelihoods would not be destroyed in this process without people’s consent, and would ensure that they can have not just a habitat but also an alternative livelihood. In the present Indian context this means that industry should come up on vacant and uncultivable land, while productivity of cultivable land should be increased. Decentralised, efficient and participatory management of land, water and tree-cover with human power can achieve this. Industries can be labour intensive, producing on a small scale with more direct market linkages

We have to start by extending the employment guarantee scheme everywhere — urban and rural areas at a minimum uniform wage, for 300 days a year, available on demand.

With work opportunities conceived by the communities through innovative plans aimed at fulfilling basic needs within a short radius of the village centers, this alternative industrialisation would be characterised by labour-intensive technology, small scale of production by masses and maximum direct linkage between consumer and producer. The large projects, enterprises and heavy industries considered essential would need the consent of the community, compliance with social and environmental rules, justice with both labourers and landinvestors and economic viability without seeking maximum profit. The guidelines would be environmental sustainability, equity and justice monitored by wider institutions and agencies, who would work with unit tiers like the present Panchayati Raj, with suitable amendments to draw units on the basis of the eco-system boundaries.


Without consensus, plans would be neither accepted nor effectively implemented by the people. The precondition is decentralisation and transfer of power to the lowest level of elected local government, in the true spirit of Panchayati Raj. Mere political pronouncements, not backed by real intention, cannot deliver. Neither the Centre nor the states have been enthusiastic about giving full autonomy of decision-making or even little financial autonomy to the local governments. The legal first step is to actualise the 73rd Amendment with the help of Article 243 of the Constitution. The legal framework exists, but mainstream political parties would rather see our countryside in crisis than give up control to the people. Only irresistible peoples’ movements will make it a reality. Our focus must shift from external to internal markets that constitute local economies to reduce poverty

The cost of such an employment programme works out approximately six to seven percent of the GDP. We must afford this as the highest priority, increasing the Central Government budget deficit as and when necessary, by doing away with the Fiscal Responsibility and Budget Management Act. The funds would be held in a separate account in nationalised banks and provide credit lines to local governments or panchayats without interference from Central and state governments. The mechanism for supervision would be a checks and balance system between banks and the panchayats with a compatible incentive scheme.


This way of industrialisation would produce a large range of goods and services for the local market created through a purchasing power generated locally in the hands of the poor. This is the route through which the poor, rejected by today’s industrialisation, would enter the larger economy with dignity as both producers and consumers. The composition of our national output would change as we put the internal market, constituting many local economies and populated by the poor, at centerstage. The composition of output produced in this manner at the local level would be much less intensive in its use of natural resources. No big dams or ruthless exploitation of natural resources would be needed to provide electricity and minerals to benefit the nexus of contractors, industrialists and politicians. To reduce the pace of mad urbanisation that sucks enormous natural resources for a handful of rich, by dispossessing the poor and forcing migration to cities, is a related task which only this alternative can achieve. The domestic rather than the external market must occupy the centre of economic policy, with the purchasing power rising at a faster rate at the bottom than at the top of income distribution, and the market used by the poor for local exchanges to suit their needs and priorities. There are isolated experiments where local use of skills and resources have successfully withstood corporate competition.


We live in a time when both centralised planning and corporate industrialisation have visibly failed. Even the workforce of the organised sector (less than 10 percent) feels increasingly insecure. The faith in existing paradigms is deeply shaken. The conventional politics of trying to capture centralised power by any means of democracy without trusting the creativity of the people has rendered both the right and the left political parties without legitimacy in the eyes of the people. The time is ripe for a new beginning.

Medha Patkar is founder-convenor of NAPM Amit Bhaduri is Professor Emeritus at JNU, Delhi