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Development with dignity

C. Rammanohar Reddy

In the monograph,Development with Dignity: A Case for Full Employment,Amit Bhaduri forces us to acknowledge the centrality of employment in our politics and economics.

IT SEEMS the Indian economy has never been doing so well. Growth for three years running at 7.5 per cent-plus a year, stock market indices at their highest ever and still climbing, Fortune 500 companies by the dozen wanting "a piece of the India action," and now news that last year India created the second largest number of new "dollar billionaires" in the world. The National Democratic Alliance was perhaps unfairly criticised: India may indeed be shining.

Yet we do know that things continue to go poorly for a very large population of Indians. In rural India, home to two-thirds of the workforce, there is no sign of an easing of the agrarian distress — of which suicides by farmers are the starkest expression. In urban India, the focus of the current economic boom, unemployment among the educated is high even among the BPO generation of young graduates. And tucked away in the middle of all the good news that the recent Economic Survey provided, was the grim statistic that unemployment rates increased sharply over a decade (1993-94 to 2003-04) in the villages and towns, and among men and women.

The dichotomy between rapid economic growth and inadequate sharing of its benefits is one that we all-too-easily avoid seeing, bewitched as we are by the fulsome international praise we are now receiving after decades of being seen as the world's largest democracy that was home to the world's largest number of poor. It takes something like the voting behaviour of the 2004 Lok Sabha elections for the elite to be reminded that there is an India outside the world of the financial papers and TV channels. Yet the lessons of the elections have been very quickly forgotten, with the United Progressive Alliance Government enthusiastically wrapping itself in the flag of 7.5 per cent-plus growth.

"What is the alternative?" is the usual easy dismissal of any questioning of the ruling policy paradigm. There is one now in the monograph titled Development with Dignity: A Case for Full Employment (National Book Trust) by Amit Bhaduri, one of the country's most well-known economic theoreticians.

There are essentially three core and inter-connected arguments in this book. (i) "India needs to grow as fast as possible ... [but] we must cease to separate the growth rate of GDP from its distributional implications for the poor" (pp10-11), and distribution does not mean income transfer (p 11). (ii) The development process must widen and deepen "the participatory democratic process in economic development" (p38). (iii) The process "has to be characterised by the reciprocity of duty and the right for every citizen to participate and derive benefit from the process of development" (p39). This is what will lead to "development with dignity," which Prof. Bhaduri argues is not a utopia but the only "reasonable economics" that will be supported by the majority of Indians and therefore belongs to the "realm of feasible politics."

Employment is at the centre of the argument. The programme for full employment would require the state to offer all Indians regular work at a legally stipulated minimum wage. Where would the money come from? From deficit financing, bypassing if need be the self-imposed constraints of the Fiscal Responsibility and Budget Management Act. What projects would the poor looking for work be employed in? Essentially quick-yielding public works projects in rural communication, watersheds, schools, health centres, etc. How would these be organised? By the panchayats, with those who will benefit involved in monitoring and execution. The broad strategy would consist of "devising an imaginative combination of rapid expansion in the domestic market and purchasing power of the poor people with their participation in building decentralised productive capacity." (p71)

The outline of the programme for full employment appears like an expanded National Rural Employment Guarantee Scheme, but Prof. Bhaduri explores many more issues of organisation, selection, and finance than what even the Centre discussed before the shell of a NREGS was formulated. The monograph, however, is much more than an exploration of a decentralised guarantee of full employment. Many shibboleths, which usually pass off in the form of sophisticated arguments, are dissected in the fewer than 120 pages that make up the book. These include the obsession with fiscal deficits, competition, cost-cutting, external markets, privatisation, the requirements of international finance, the straitjacket of the FRBM Act, and what in an inversion of accepted dogma is called "the government can't-do-it syndrome."

Sophisticated position

Make no mistake; Prof. Bhaduri has no time for the state versus market argument. The position is more sophisticated: it is a question of making the market system more compatible with political democracy. Whichever the "reformer" government at the Centre or in the States over the past 15 years, it has been voted out of power because most voters feel they have not seen the benefits of this process. "It is this accountability of the politician, which we have to use to make the market system more accountable." (p19).

Prof. Bhaduri is not sparing either in his critique of Left politics for, among other things, the concern more for the jobs of the unionised workers in the organised sector, than for the mass of under-employed poor in agriculture and the urban informal sector.

This is not a complete text and there are many issues one may take with the arguments that are offered. Is a public works programme all that is required for an economy as large and diverse as India's? Can a rural public works-type programme work in an increasingly urban economy? The larger problem, however, is the absence of politics in the Bhaduri approach. It would be naïve to suggest that the elite would either think up such a plan out of benign self-interest or that such a full employment programme can be implemented without a mass political movement. This economist is not unaware of the importance of politics though; he never forgets the need to devise "politically feasible solutions relevant to our context."

All that apart, the "market fundamentalists" who now make policy need to respond to the questions posed in this book. If for nothing else, at a time when our Prime Minister and Finance Minister seem to be concerned above all with the GDP growth rate, Prof. Bhaduri forces us to acknowledge the centrality of employment in our politics and economics. It must say something about 21st century India that we need to be told something as obvious as that "the growth rate must be seen as the outcome of full employment policy and not as an end in itself." (p66)

The deeper problem is the tension between political democracy and the power of the market economy, which explodes only at the time of elections to the legislature. "Indian democracy has stabilised in a twilight zone of hope and despair, by holding out the hope of socio-economic mobility for the majority, and by neglecting the utter hopelessness of a desperately poor minority ... However, even for the majority this perception of upward mobility mostly turns out to be an illusion. It is a `small probability event' which would happen to only to a relatively few lucky ones, but the ideology of the market economy survives by nurturing this illusion for the majority." (p25)

Disillusionment then leads to the demand for reservation, resulting in turn in mobilisation around religion, caste, ethnicity, and other identities. When will we be ready to deal with this tension between political democracy and the market economy?

(The writer is Editor of Economic and Political Weekly.)

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