MY ARTICLE IN INDIAN EXPRESS, PUNE(13/09/2007)

WORRYING DISPROPORTIONATE GROWTH

India's economic boom continues unhindered. Together with China, it is emerging as the most important nation that will keep the economic wheel spinning at a time when the developed world slows down to re-examine what capitalism-led economic reforms have done to its human capital and social well-being. The growth of India has been indeed phenomenal. The Forbes magazine noted this year that India has the highest number of billionaires in Asia ­- 36 -­ exceeding the 24 billionaires in Japan. Together, the Indian billionaires hold among themselves assets worth $191 billion. India, after all these years of economic reforms, is at the crossroads. While one road leads India to economic prosperity and glory, the other road leads it to social inequality. Presently, as India is one of the fastest growing economies in the world, the social aspects have been ridden roughshod by the economic benefits. While this growth is laudable, there is another India or Bharat for some, which escapes attention. India's unquestioned acceptance of neoliberal policies and the resultant prosperity has largely bypassed the nation's poor ­­- a reaffirmation of the trend of the rich getting richer and the poor getting poorer. What has been conveniently forgotten or suppressed till date have been the disparities, mainly the socio-economical issues. This has led to growing discontent among the population and it has gathered momentum since the reforms began 15 years ago. It will very soon reach a critical point wherein the very purpose for which the reforms were started, will start to lose their significance rapidly and throw the country back into the ‘license raj’ and ‘unionist’ era.
India's agrarian crisis has successfully dismantled the rural infrastructure and hastened the migration of those dependent on farming to cities in search of jobs. The migration of the rural poor to cities in search of jobs has created frequent skirmishes between city dwellers and migrants of different economic, social and cultural backgrounds. Another problem is the packaging of these issues as cultural conflicts without looking at the economic crisis that is driving this antagonism. India's agricultural crisis continues to aggravate and the economic reforms initiated in 1991 under the P.V. Narasimha Rao government and accentuated under the NDA government led by A.B. Vajpayee have eroded the agricultural infrastructure of India. The current UPA government led by Manmohan Singh has been of little help, a fact made obvious by the heightening plight of cotton farmers in Maharashtra and Andhra Pradesh. Another worrisome aspect of India's economic growth is that it is mainly led by the service sector, particularly IT and IT-enabled services, in which the country has emerged as a force to be reckoned with. But this also raises the question of sustainability of growth in this sector. While agriculture has been systematically altered to meet the dictates of neoliberal policies, the secondary sector has also experienced a steady setback with the major growth being realized in what academician David Harvey calls as FIRE: Finance, Insurance and Real Estate. With these sectors emerging as the major areas of growth in the future, a prominent feature of all neoliberal economies, India's embracing of the free market is almost complete. But what is alarming is the set trajectory of India's economic growth, with most of it being realized in areas that are driving the world economic order. The rise of information technology as an integral tool through which economic growth is managed, the steady abandonment of agriculture for corporate takeover, the ignoring of the industrial sector and increased dependence on export-oriented growth - all features conducive to and dictated by Western economic forces - places India in a peculiar position and intertwines its well-being excessively with global economic conditions.
The chasm between the rich and the poor has increased so vastly that the rich are just getting richer and the poor are just getting poorer. The real benefits of the economic reforms have rarely percolated to the lowest strata of society. Just to illustrate the same with an example, most of the states today vie with one another to grab a project of any significance, be it chemical, auto or even IT. In doing so, the benefits they are offering, right from free land to tax sops are being given on a platter. But the benefits or savings that a company gains from this does not affect the lower strata of management, but remains in the hands of the top management, thus depriving the former of the economic benefits. Also, most of the labour laws in the country are outdated and have not kept pace with economic reforms. Thus, the exploitation of the working class becomes much easier. A classic example is the BPO industry in our country. While most of them work in the nights, the pressure each employee faces to deliver results and the working conditions are appalling, to say the least.
The agricultural sector has also seen this disproportionate growth, as it is a field that has been left high and dry in the pursuit of agricultural reforms. The sector has been opened up to the multi-nationals, without having evolved a comprehensive cover for our farmers, most of who are poor and own very little land of their own. A case in point is the spate of farmer suicides that our country has witnessed in the past few years. The developed countries, which clamour for open-ended policies, have, in fact, some of the fiercest protection policies when it comes to their agricultural sector. Small scale industries (SSIs), the heart and soul of many towns and villages, have been virtually ignored. More than half of them have closed down in the last few years in the face of intense competition from multi nationals who have unmatched financial and political muscle.
This dependency, though desirable as it promotes global harmony, may place India in the hands of dominant economic forces that have a vested interest in promoting the global integration of economies. The fear that globalization is the next phase of capitalist expansion is not totally unfounded. While India needs to be a part of the global economic apparatus, allowing the latter to control it excessively would hurt its interest. The only way out would be to create a self-sufficient India, a condition almost impossible if the primary and secondary sector continue to be kept out of the policy makers' priorities.
On a parting note, what are essential for India are economic reforms with a social face. The economic policies and their subsequent reforms must be accompanied by suitable clauses to benefit the economically weaker sections. Various schemes must be thoroughly scrutinized and efforts must be made to see that the rewards must reach everyone. Then India will not only be economically prosperous, but will also forge ahead towards its goal of world dominance.
ABHISHEK RANJAN
IMED, PUNE