Towards an economy of mutualism

Modern economy must come to assume a mutualistic, and not a predatory, role toward the natural resource-based, labour-intensive sector of the economy

Updated - December 04, 2013 02:43 am IST

Published - December 04, 2013 02:10 am IST

J.C. Kumarappa, the Gandhian economist who worked with the Planning Commission in the early years of Indian Independence, favoured industrialisation but insisted that its pursuit should not lead to the creation of an economy of violence. Recent disturbances linked to control over, and fate of, the rich water, mineral, forest and biodiversity resources of the Western Ghats of Kerala suggest that Kumarappa’s worst fears of a lopsided development have come true. As Nobel Laureate Joseph Stiglitz emphasises in his recent book, The Price of Inequality , any nation must aim at a harmonious development of its four capital stocks: not just man-made capital that GDP highlights, but natural capital, human capital and social capital as well. A GDP-centric viewpoint focusses exclusively on economic activity in the organised industries-services sector.

Chembanmudy quarries

Thus, in the case of the controversial Chembanmudy hill stone quarries of Pathanamthitta district in Kerala, what will count as positive development gains are not only quarrying, crushing and truck transport, but also the boosting of sales of anti-cancer and anti-asthmatic drugs as a result of the ill-health caused by quarrying activities. In the absence of proper records, other relevant elements of economic activities such as the decline in agricultural productivity and loss of employment for agricultural labour that ought to be counted on the debit side will be overlooked. In addition, the GDP-centric view totally ignores the ongoing grave depletion of natural capital, human capital and social capital. Thus, in the case of Chembanmudy, landslips and blockage of streams are adversely impacting land, water, forest and biodiversity resources. Health, education and employment are three important components of human capital. In the Chembanmudy case, health has suffered, with even young children developing lung cancer. Mothers have petitioned that the unceasing truck traffic does not permit their children to focus on studies.

As for employment, there is little for local community members. Most of the small number of labour employed is from tribal tracts of Orissa or Jharkhand, people whose livelihood has been destroyed by rampant mining in their own native districts. There are horror stories making rounds of how this disorganised labour force is ill-treated, with no compensation for accidental injuries or even death. Indeed, the claim that India’s rapid economic growth is helping create much-needed employment is dubious; the annual rate of growth in employment in the organised sector that was 2 per cent when the GDP was growing at 3 per cent, actually declined to one per cent as the GDP growth rate soared to 7 per cent. So what we are witnessing is jobless growth, with accompanying erosion of human and social capital.

Social capital resides in social harmony, cooperation and trust. These too are suffering under the prevalent economy of violence. This economy is promoting grabbing and spoiling of land, water, mineral and forest resources to benefit a few, at the cost of the larger society. This is being facilitated by lawlessness and social injustice: witness the very large number of illegal quarries currently operational in Kerala, estimated at 1,700 out of a total 2,700 functional quarries. The disinformation campaign focussing first on our Western Ghats Ecology Expert Panel (WGEEP) report, and now on the Kasturirangan report, and the violence that has been triggered suggest that social disharmony has become the order of the day.

WGEEP points out that we are currently practising “Development by Exclusion, accompanied by Conservation by Exclusion.” This is because the many powerful interests that control decision-making today are not motivated to pursue development that would create mutually beneficial relationships among the beneficiaries of the organised industries-services sector and the bulk of our people dependent for their livelihoods and well-being on a healthy base of the natural resources. Nor are the powers-that-be properly informed of the realities at the ground level. This prevails all over the country, despite our well-entrenched democracy and the many constitutional and legal provisions to protect the environment and engage people in decision-making processes that are a result of a sensitivity towards what the people want.

Of all the States, it is Kerala that has led the country in democratic devolution and has made considerable progress in ensuring that people can influence the course of development and protect their environment and livelihoods. A notable example of this is the Plachimada panchayat in Palakkad district, where a Coca Cola plant had polluted as well as depleted groundwater, with consequent drying up of wells, loss of agricultural productivity and concomitant negative impacts on livelihoods. The people of Plachimada ensured that there was a proper scientific inquiry into the losses suffered by them. This provided sound scientific evidence that these losses amount to a whopping Rs. 260 crore. On the basis of this evidence, the panchayat rescinded the company’s licence. Notably enough, initially none of the political parties backed the people’s demands, but came round when confronted with a groundswell of sentiment. While cancelling the licence, the panchayat evoked its constitutional rights, arguing that as a local elected government it had the duty to protect the well-being of its subjects. So it had the right to cancel — or refuse permission to — anything that affected its subjects adversely. The company’s counter-argument was that the panchayat was a subordinate of the State government and thus could not operate out of its domain, since the State government had granted the licence for Coca Cola to operate. The High Court rejected this argument, affirming that people at the grassroots indeed have the authority to decide on the course of development in their localities.

The powers-that-be today would like to set aside these significant constitutional provisions empowering the people and helping them protect their environment. Instead, they are promoting a GDP-centric approach with little concern for natural, human, social capital. This is reflected in the rhetorical — and unconstitutional — question posed by the Kasturirangan panel: “How can local communities have any role in economic decision-making?” Evidently, the Kasturirangan panel wishes to facilitate the continuance of the present system of a predatory economy, but was obliged to prescribe some minimal level of protection for natural resources. Quite typically, this protection is proposed to be imposed from above and is not decided upon through a democratic process. But even this minimal protection is unacceptable to the beneficiaries of the current system who triggered the recent violence.

Duty to inform

Such lopsided development is clearly against broader national interests and since it is people at the grassroots that are best aware of what is happening to the natural, human and social capital, their inputs are critical to arriving at a development strategy that will promote a harmonious, balanced development. The sole duty of those wielding power should, therefore, be to inform the populace of all relevant facts and of the various development-conservation alternatives. Hence, WGEEP has explicitly stated that “we should attempt to develop a model of conservation and development compatible with each other … to replace the prevailing ‘Develop recklessly – conserve thoughtlessly’ pattern with one of ‘Develop sustainably – conserve thoughtfully’. The fine-tuning of development-conservation practices to [the] local context that this calls for would require the full involvement of local communities. It is therefore quite inappropriate to depend exclusively on government agencies for the constitution and management of Ecologically Sensitive Zones. Instead the final demarcation of the Zones and fine tuning of the regulatory as well as promotional regimes must be based on extensive inputs from local communities and local bodies.”

An important focus of the development of the Western Ghats tracts of Kerala should therefore be on properly informing and organising people down to the grassroots level to exercise their democratic rights. A well-informed and empowered citizenry will ensure that the environment is properly cared for even as we continue to industrialise, as has happened in Germany and the Scandinavian countries. What we need to concentrate on is implementing that which by all rights must be implemented, namely, the constitutional provisions for protecting the environment and empowering the people.

Of course, India must continue to develop a vibrant technology-based economy as well. Inevitably, this will end up employing only a small proportion of our people. But this modern economy must come to assume a mutualistic, and not predatory, role towards the natural resource-based, labour intensive sector of the economy. That is the only route to balanced and harmonious economic and social development.

(Madhav Gadgil is Chairman of the Western Ghats Ecology Expert Panel.

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