Tamil Nadu’s distinct growth path is in peril

The political emphasis on welfare interventions is insufficient to address the emerging developmental issues in the State

Updated - March 25, 2021 12:41 pm IST

Published - March 25, 2021 12:02 am IST

A major concern in contemporary Indian development is the widening socio-economic disparity across groups and regions. Even when regions perform relatively better in one developmental dimension, it does not often translate into all round development. For instance, Himachal Pradesh and Kerala might have attained better levels of human development but that has not been backed by adequate dynamism in the productive economy.

Similarly, productive dynamism in Maharashtra and Gujarat has not been accompanied by commensurate improvements in human well being. The recent ‘Bhagwati-Sen’ debate best exemplifies this paradox. While Jagdish Bhagwati makes a case for a trickle-down approach where growth will translate into development as it provides surplus resources for human development, Jean Drèze and Amartya Sen argue for a capability-centred developmental path where investments in human capabilities will lead to economic development.

Tamil Nadu’s trajectory

Tamil Nadu, however, bucks this trend as it has managed to combine relatively high levels of human development with economic dynamism. What explains this distinct development trajectory? We argue that this trajectory can be explained through the pattern of political mobilisation in the State. Populist political mobilisation against caste-based inequalities accompanied by a political emphasis on inclusive modernisation have been critical to this process. As the State goes to elections next month, the media is abuzz with news of competitive welfare promises announced by various parties. What is seldom taken note of is that the State’s distinct developmental path is at stake.

We suggest that Dravidian mobilisation has institutionalised two sets of policy interventions — ‘economic popular’ and ‘social popular’, which have fostered a comparatively inclusive development pathway. While both share certain common characteristics, we find this analytical distinction useful. The ‘social popular’ pertains to rights-based interventions that ensure inclusive access to modern sectors and public goods. It has a definite redistributive character. Affirmative action policies, land reforms or legislation for equal property rights for women are some examples. ‘Economic popular’ policies are different. They are driven by electoral imperatives and tend to address issues of absolute poverty such as through expansion of food or education subsidies.

No ‘elite bias’ here

Scholars like Myron Weiner have pointed out that India’s human development policies have been historically biased towards elites. Such bias can be seen in policies privileging higher education rather than universalising primary education, and investing more in curative and tertiary health care than in preventive and primary health care. Public interventions in health and education in Tamil Nadu have countered this ‘elite bias’.

In education, Tamil Nadu emphasised primary education as early as the 1950s and gradually shifted its emphasis towards higher education. Interventions such as the noon meal scheme, that goes back to the Justice Party government in the early 20th century are well known. In addition, infrastructure such as hostels for lower caste students, and transport and tuition subsidies have made education one of the most inclusive and low cost in the country. In higher education, apart from investing in such supportive infrastructure, the State used caste-based reservation to enable broad-based access, simultaneously addressing the differences within the Backward Classes and the Scheduled Castes”.

Better indicators in health

In health, Tamil Nadu has achieved relatively better indicators such as a favourable total fertility rate, low infant mortality rate, and maternal mortality ratios across social groups. These are again outcomes of a long history of public interventions in health care. ‘Social popular’ measures such as constituting the first State Planning Commission in India with a taskforce specifically for health care, investments in public health infrastructure, and ensuring a socially inclusive pool of health personnel combined effectively with ‘economic popular’ measures such as subsidised health insurance, expanded noon meal schemes, and maternity benefits to generate inclusive health outcomes.

If social popular policies helped build public health infrastructure and democratised health governance, economic popular policies enhanced its coverage and added new schemes to meet specific demands. The Tamil Nadu Medical Services Corporation (TNMSC) is a case in point. Through this scheme, the State has pioneered free provision of essential drugs and diagnostics at public health-care facilities, which in turn has led to households in Tamil Nadu incurring one of the lowest out-of-pocket expenditure for health in India.

Such attainments in human development have sustained and fed into economic dynamism. Contrary to popular perceptions that lower castes are mere recipients of welfare benefits, our analysis of the State’s experience tells a different story. Tamil Nadu is home to a higher share of lower caste entrepreneurs compared to Maharashtra or Gujarat. This simultaneity of growth and development becomes particularly evident in the 1990s when regional governments were tasked with the responsibility of mobilising resources for development particularly through attracting private investments. This is a phase when the long-term investments in higher education in the State translated into capital accumulation by sections of lower castes. Several entrepreneurs from lower castes, armed with technical capabilities, emerged during this period.

In addition, Tamil Nadu has also witnessed relatively better diffusion of gains to labour. Though the State is not immune to the global and nation-wide shifts against labour, wage levels and social protection for labour in both the organised and unorganised sectors tend to be better. In fact, apart from relatively lower levels of contractualisation, the share of wages in organised manufacturing is the highest among industrially dynamic States such as Maharashtra and Gujarat.

We suggest that this became possible partly due to better unionisation and also due to welfare interventions outside the workplace that helped enhance the bargaining power of labour. The embedding of labour mobilisation within larger social solidarities among lower castes is critical to the higher unionisation and state response to labour demands. Advances made in human capital formation too aided this process. Relatively higher wages could be offset by access to better quality of labour inputs for competitive accumulation. Based on the Tamil Nadu experience, we can therefore say that processes of human development and economic dynamism can go hand-in-hand and not necessarily be sequential, as hinted by the ‘Bhagwati-Sen’ debate.

Some imbalances

There are, however, asymmetries emerging in this development trajectory. Federal constraints on resource transfers as well as powers to chart autonomous policies are increasing. This curtails powers to respond to popular demands at the subnational scale. The arbitrary imposition of the National Eligibility Cum Entrance Test (NEET) for admissions to medical courses is one such example. We are also beginning to witness unevenness in the quality of health care and education in Tamil Nadu. Poor learning outcomes among schoolchildren as well as a growing preference for private schools even among marginalised social groups have been causes for concern. Similarly, the increase in reliance on private health-care facilities implies a segmentation of public services based on perceived or real differences in quality. Though not unique to the State, this opens spaces for new disparities.

Further, despite a highly dynamic manufacturing and high end service segments, the quantum and quality of jobs are inadequate to accommodate the large numbers of educated lower caste youth entering the labour market. This aggravates the reduced efficacy of affirmative action — a policy central to Dravidian mobilisation, due to growing privatisation. Together, such trends generate new axes of inequalities that are both intra and inter-caste that challenge the sustaining of the Dravidian bloc. The emphasis on welfare interventions is clearly insufficient. The extent to which political mobilisation can reorient its terrain to forge appropriate demands in the new context will therefore shape the possibilities of further expansion of substantive democracy in Tamil Nadu.

Kalaiyarasan A. is with the Madras Institute of Development Studies, Chennai, and currently a Fulbright-Nehru post-doctoral fellow at the Watson Institute for International and Public Affairs, Brown University.M. Vijayabaskar is with the Madras Institute of Development Studies. This article is based on their forthcoming book, The Dravidian Model: Interpreting the Political Economy of Tamil Nadu

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