Monday, January 19, 2009

Industrialisation for the People,by the People, of the People

Industrialisation for the People,by the People, of the People
AMIT BHADURI, MEDHA PATKAR
EPW
Those who oppose the currentpattern of high growth are often branded as anti-development.In this article two well-known dissenters state why they oppose the present mode of industrialisation in India and setout an alternative path, starting with a few practical steps.Economic, political and social proc-esses are interwoven inextricablyin the course of development.Developmental economics is sterile with-out an understanding of the accompany-ing developmental politics, which involvesthe interaction of the State with the majoractors. At the core of this politico-economicprocess is the role assigned to industrialisa-tion. Thus the current debate about indus-trialisation is essentially a debate abouthow the economic and political factors would drive, in an interlocked manner, thetransformation of our economy, polity and society, and it should not be trivialised intostatistics about growth rates.Our dissenting voices about the currentpattern of high growth are often branded as anti-development. Therefore we need to state why we oppose the present pat-tern of industrialisation in India, and howan alternative path can be charted out,starting with a few practical steps. Thereare five main reasons for our opposition aspolitical activists, and associated witheach there is a corresponding economicstep that needs to be taken to initiate thealternative process of development withinthe realm of practical politics and reason-able economics.1 Deepening of Democracyand People’s rightsPoliticians, economists and commentators of all sorts from the media treat it asalmost axiomatic that the standard of liv-ing of ordinary people cannot be improved without large modern industries based mostly on the historical experience of thewest taken out of context. They tend toforget that England took some 100 years(1780-1880 approximately), and a similartime scale was involved for other westerncountries. During this period people had hardly any democratic rights based onuniversal adult suffrage. The same applies even to later experiences like South Korea,China, etc, which are transforming faster.In contrast, India is a poor country wherepeople have democratic rights, though theinstitutions that are necessary to securethose rights malfunction. It is essential tostrengthen and expand these rights,especially for the poor; instead they arebeing violated continuously, most visiblythrough land acquisition by the State with-out their consent. The role of gram sabhasis not recognised, nor is the legal process fully and fairly followed. It is not just land but habitat after habitat, even generation’s old, common property resources, such aswater bodies as also tree and forest cover,that is snatched away, resulting in thepoor being deprived of their livelihoods and uprooted from their socio-cultural milieu. Compensation of all this loss withacceptable alternative livelihoods and ashare in the benefit, rarely come true fordecades, even generations. People resistthe resultant trauma and fight for survivalwith right to life and livelihood within ourconstitutional framework.We support these resistances againstland acquisition without people’s consent, we ask for a referendum of the peopleinvolved, proper rehabilitation and reset-tlement to correct the wrong headed poli-cies of successive governments irrespec-tive of the colour of the government thatindulges in it. The effect of taking thepeople’s view on land acquisition would directly influence the pattern of industri-alisation, making it non-displacing or leastdisplacing and truly employment generat-ing, i e, benefiting the local communities who would be the investors of land and allnatural resources as against the others whoinvest non-productive monetary resources.Moreover, this would also strengthen thedemocratic rights and participatory role of the people in planning development and community management.2 Immediate Gainers andPermanent LosersIt must be recognised that the benefits of industrialisation come unacceptablyslowly to the poor, because creation ofjobs in industry proceeds at a slow pacedue to mechanisation and rationalisationAmit Bhaduri (abhaduri40@hotmail.com) is with the Council for Social Development,and the Jawaharlal Nehru University, both inNew Delhi. Medha Patkar is with the National Alliance of People’s Movements.
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commentaryEconomic & Political WeeklyEPWjanuary 3, 200911of production in large industries. Labourtransfer from agriculture to industry is aslow process, and in India the contributionof agriculture to gross domestic producthas been falling dramatically, but the per-centage of population in agriculture has been falling extremely slowly. As a resultgovernment policies have turned agri-culture and much of the informal services into a refuse sector where the poorare imprisoned in sub-human povertywithout a reasonable chance of escape intothe industrial or formal service sector.Despite so much hype about nearly doubledigit growth, regular employment in theorganised sector grew at about 1%, accord-ing to the government’s own admissionin the Economic Survey. Private sectoremployment growth did not even compen-sate for the jobs lost in the public sector.The two supposedly industrially dynamicstates with large direct foreign investment,Gujarat and Maharashtra, were among theincredibly slower growing states in terms of employment (NSS 61st round; also, TheTimes of India, 7 July 2008).Nevertheless, this is not the entire story, perhaps not even the most impor-tant part of the story. The whole organ-ised sector to which the corporate sector belongs, accounts for less than one-tenth of the labour force. Contribution by the unorganised sector, which includes most of agriculture, comes from lengthening the hours of work to a significant extent, as this sector has no labour laws worth the name, or social security to protect workers. Subcontracting to the unorgan-ised sector along with “casualisation” of labour on a large scale become conven-ient devices to ensure longer hours of work without higher pay. Self-employed workers, totalling 260 million, expanded the fastest during the high growth regime, providing an invisible source of output growth. Ruthless self-exploitation by many of these workers in a desperate attempt to survive by doing long hours of work with very little extra earning adds both to corporate profit, and to human misery.Government policies of fiscal austerity embodied in the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 largely to keep the stock market, the foreign investors, the World Bank and the International Monetary Fund (IMF) happy meant stagnation of public spending as a proportion of GDP on education and health, and denial of mini-mum social security to the poor in almost all unorganised industry. The time scale involved before the poor people in this country can benefit from industrialisation by moving into industrial jobs is too long. It involves several generations that would have lost their land, livelihood and home in the meantime. How would they survive, how would their children face eventually the industrialising and glo-balising world without education, health and without a community to impart social values? To sacrifice the weakest members of several successive generations in the name of development is unacceptable and incompatible with basic democratic values and economic goals of equity.This utterly unjust and undemocraticroute is also unsustainable in the longerrun, as democratically elected governmentwould lose its legitimacy in the eyes of thepeople if it should take recourse to State-sponsored violence to contain the despairand fury of the people. The symptoms arealready unmistakable – movements in thename of caste, religion, regionalism, lan-guage, and the class anger of the dispos-sessed poor. They tend to divide us innumerous ways, and the wrong anti-peoplepath of industrialisation has been a majorcontributory factor. We therefore have tostruggle for more public action, more fund-ing for health, education and social securityfor the poor, to force governments to aban-don the false path of anti-poor policies inthe name of “sound finance”.Sound finance must be targeted at diverting resources from unnecessary external and internal defence expenditure, less money spent on government pomp and splendour. This can be achieved by opposing all divisive policies in the name of religion, caste, regionalism, by working systematically for the poor, not by trying to fight terrorism of all sorts with blind military might, and accepting the legiti-mate demands of various communities through negotiations. The Indian federal structure should be flexible enough to accommodate economically and politically different degrees of autonomy for differ-ent regions to reflect popular demand. 3 corporates versus PeopleUntil the recent financial crisis, it was anoft-repeated cliché that the capitalist mar-ket economy is good at creating wealth,but bad at distributing it, while for social-ism it is the other way round. Such a wise-crack avoids facing the real problem. It is overlooked that how wealth is created determines to a very large extent how it is distributed. Ideas such as: create wealthby promoting corporations, and then dis-tribute it through state action like hightaxes, or through corporate social respon-sibility are wishful thinking, and avoid thereal issue. If the state wants corporations to create wealth, it also has to providethem with the incentive to control and enjoy that wealth. Corporations would notcreate wealth simply to distribute it,except perhaps a minor fraction in someinstances! Therefore we have to opposecorporate-led industrialisation, whichbestows control to the corporations as thewrong track for improving the livingstandards of the people; instead a way hasto be found by which wealth createdmostly by the people would have anin-built mechanism for distribution intheir favour without depending on a top-heavy bureaucracy.This alternative way of industrialisingwould involve the poor, mostly uneducated and illiterate people as a propelling forcefor the creation and distribution of wealth.This involves (a) their participationthrough moving towards productive fullemployment in the shortest possible time,and (b) not destroying existing livelihoods without the people’s consent and provid-ing them with alternative livelihoods,which, in the present context, means thatindustry must come up on vacant/unculti-vable land. Economic growth would be theoutcome of this strategy, rather thanemployment and other benefits beingthe “trickle down” outcome of growth.This is a fundamental difference bet-ween our and the official economicperspective in the formulation of Indianeconomic policies.4 the alternativeThe alternative we envisage essentiallyrequires starting at economically the mostvulnerable points in our poor country withpoor, unskilled people rather than rejecting
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commentaryjanuary 3, 2009EPWEconomic & Political Weekly12them as useless for achieving high growthas is happening now under liberalisation,privatisation and globalisation pursued bythe present government (right now in adenial mood due to the financial crisis andforthcoming elections). Most of our poorare in rural areas unable to make a living,and can earn enough in exchange of pro-ductive work that builds up social wealth.This is where we have to start by extendingthe employment guarantee scheme every-where, in urban as well as in rural areas ata minimum legally stipulated wage for 300days a year. This must be done immediatelyin areas of special need due to catastro-phes, like the Kosi area, and areas of abysmal poverty even by Indian standard,like Kandhamal in Orissa. No large differ-ence between rural and urban wages should be allowed so that cities do not gainat the cost of impoverished villages. Jobsshould be available on demand, and would be largely self-selecting without bureau-cratic red tape because, if honestly imple-mented, only the very poor with no otherreasonable source of income would opt forit. It can also be seasonally adjusted.The barrier to this policy is mainly two-fold. First, it cannot be implemented effec-tively because bureaucratic mechanismsare inadequate for ascertaining that thedeserving poor benefit, and productivework is offered to improve living condi-tions rapidly in rural areas. A preconditionfor this to happen is decentralisation of power to the lowest level of elected local government in the spirit of the panchayatiraj, not through mere political pronounce-ments without intention. Neither thecentre nor the states have been enthusi-astic about giving complete autonomy of decision-making and even less financialautonomy to the local governments. Yetwithout these measures no large-scaleproductive employment generation pro-gramme, which would benefit local com-munities under their own responsibility,can have any reasonable chance of success.However, decentralisation is necessary butnot sufficient; all movements of the peoplemust support it in the teeth of oppositionof the vested interest of politicians athigher levels (MLAs, MPs), higher bureau-cracy (the Indian Administrative Service,the state bureaucracy), so-called economicand developmental experts housed byorganisations like the IMF, the World Bankand the Asian Development Bank (ADB) working in unison with the Indian govern-ment, and hostile media-persons who pre-tend to know. The simple guiding principleshould be, “those who hope to benefit fromthese local projects must take the responsi-bility of their decisions”. They would grad-ually bear an increasing proportion of thecost from local efforts as they becomefinancially stronger. An essential legal firststep is to actualise the 73rd amendmentwith the help of Article 243 of the Constitu-tion. The legal framework is mostly inplace, and only an irresistible people’sdemand will make it a reality.cost of ProgrammeThe cost of such a programme works out,at the most, approximately to 6 to 7% of GDP. This we must afford as the highestpriority. There is no point in pretending tobe an emerging superpower with nearlyhalf of our population in extreme povertywithout minimum healthcare, sanitation,nutrition, and education, with the largestnumber of illiterate and undernourishedchildren, many crippled by malnutrition.Is this the preparation for entering themuch talked about opportunities of globalisation by our pro-liberalisation,pro-reform politicians? We can do betterby (a) reallocating government expendi-ture and by cutting down public expendi-ture by politicians, which also has a sym-bolic value, (b) by raising taxes on the richand on corporate profits rather than indi-rect taxes on the poor, and expanding thetax base, introducing a substantial tax onspeculative cross-border financial transac-tions, especially in the light of the recentfinancial crisis, instead of pleasing the rich/middle class and the IMF-World Bank-ADBwith capital account convertibility, moreforeign investment, etc, as essential forgrowth, and finally, (c) increasing thecentral government budget deficit as and whennecessarytofinancethisprogrammeby doing away with the FRBM Act.The money for this programme wouldbe held in a separate account with thenationalised banks and a credit line wouldhave to be provided to the local govern-ments/panchayats without interferencefrom the central and state governments.The mechanism for supervision would bemutual check and balance between banks and the panchayats, where successful projects would be rewarded with morefunds at the next round for the implement-ing panchayat and bonus for the local branch of the bank, and penalty would be agradual reduction of funds and no promo-tions for the concerned bank employees.The criteria for success and failure wouldhave to be agreed between the two parties depending on the nature of the projectbeforehand. One important element in this context, especially relevant for the poor,would be the social component wage, e g,the first right to access/use to the local school, primary health centre, watershed,and/or warehouse facility which the local labourers under the employment guaran-tee scheme help in building. This is also theway to improve the “delivery system” tothe poor. The current way of handling it byprivatising is vicious; it simply prices outthe poor from the essential services, whichis their right as citizens of this country. Wesupport a system of delivery based on local initiative to meet local needs with local accountability and responsibility to themaximum extent possible.In this way we can produce a large rangeof goods and services for the local marketcreated through purchasing power gener-ated locally in the hands of the poor and used by the poor for local exchanges to suittheir needs. Only through this route theywould enter the larger economy with theirfull economic rights as both producers and consumers. This means emphasising thedomestic market as the centre of economicpolicy. Globalisation, trade liberalisation, etc,insofar as they shift the relative emphasis from the internal to the external marketand the market meant exclusively for thericher section of the population, arecounter-productive. Therefore we are oppo-sed to the policies of gung-ho liberalisers,foreign investment or globalisation seekers.At this stage of Indian economic evolution,the priorities of our industrialisation andgrowth must be different from what govern-ments of various colours seem to want. Wewant them to see reason and change track,and would continue to fight for it. The cur-rent crisis would have served an uninten-ded historical purpose if it forces the govern-ment to emphasise the importance of deve-loping the internal market for the poor.
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commentaryEconomic & Political WeeklyEPWjanuary 3, 2009135 composition of output,and the environmentThere is a misconception that we areimpractical romantics, only interested inpersevering the old world and the environ-ment. This is untrue; we are interested inpeople, especially people who have almostnothing today and are continuously threat-ened with even losing the little they have.The composition of our GDP must change.It should be produced by the majority fortheir own use, while playing their rightful dual role as consumers and producers. Thecomposition of output, produced in thismanner at the local level would requireless energy; no big dam would be neededto provide electricity nor would expensiveand dangerous nuclear power be required;production in general would become muchless intensive in its use of natural resources like land, water, forest and mineral pro-ducts. To reduce the pace of mindless urbanisation and day dreams of world classcities that suck in enormous naturalresources for a handful of rich people bydestroying the livelihoods of the poor is arelated task which only this alternative pat-tern of industrialisation focusing on local initiatives in rural areas can achieve. Sav-ing and improving, through popular initia-tive, common resources of forests, rivers and the sea coast, cultivable land for thepeasantry and those who now make a live-lihood from related agricultural activities are the way forward for sustainable devel-opment without the state practising deve-lopmental terrorism on the poor. We haveto fight for all this here and now to saveourselves, and the generations to come.the Press council: an expensive IrrelevanceA G NooraniThere are proposals to amendthe Press Council Act 1978 to givethe Press Council of India more powers, including the powerto withhold advertisements.These are dangerous proposals. Contrary to conventional wisdom, the PCI does not need morepowers. It needs a speedy burialby a statute. But that imposes on the media a burden it must bearif it is to deserve freedom. It mustset up a credible, representative body to oversee a code of conduct drawn up by the media itself.You praise the firm restraint with which theywrite – /I’m with you there, of course:/Theyuse the snaffle and the bit all right/But where’s the bloody horse?–Roy Campbell,On Some South African Novelists.In a democracy a body charged withthe duties to protect press freedom, toensure maintenance of standards of journalistic ethics and to rule on violationsof both is essentially a “Court of Honour”.It is like a Commission of Inquiry whoserecommendations have no legal force bythemselves, unlike an order of a court of law. The effectiveness of such a court of honour depends on its independence,integrity, competence, representativecharacter and acceptability by the media.In Britain a General Council of the Press was established by the industry itself on avoluntary basis in 1953. It had 15 editorial and 10 management nominees. The pro-prietor of The Times was its first chairman.In 1989, the council, under its new chair-man, Louis Blom-Cooper, QC and law cor-respondent of The Observer, decided toconduct a review of its role and functions.To use an Americanese, it decided to intro-spect. Our own Press Council of India(PCI) has yet to do that.Following the recommendations of acommittee on privacy and related matters,headed by David Calcutt, QC, on 16 May1990 a Press Complaints Commission was set up, again, by the press itself. Itappointed a committee of editors, headed by Patricia Chapman, editor of the News of the World, to draw up a 16-point Code of Practice for the Commission to enforce.David Calcutt, when asked later to holdan inquiry, recommended a statutory tri-bunal “with teeth” as did a committee of the House of Commons. All such recom-mendations were rejected. The Press Com-plaints Commission enjoys greater respectthan the Press Council of India has donefor as long as one can remember.India’s Press councilThe PCI was set up by the Press CouncilAct, 1965. It was swiftly dissolved duringthe Emergency in 1975 by an ordinance,but revived by the Press Council Act, 1978,its present charter. Its chairman have beenretired judges of the Supreme Court;almost all of whom have sought power topunish the delinquent in the media.The Press Council drew up a 16-pointcode of conduct on 29 February 1990.On 18 November 2008 The IndianExpress carried this report under the by-line of Anubhuti Vishnoi:The Centre has proposed a slew of controversialamendments to the Act that governs it whichinclude punishing newspapers that publish“objectionable material” by barring them fromgetting government advertisements. TheCentre’s proposals come even as it has asked thecouncil to come up with its own amendments.The PCI’s Chairman G N Ray told thecorrespondent “While derecognising news-papers from government advertisements as a punitive measure was one of the pro-posals initially made by the government,there is no finality on it still. The issue isA G Noorani is a well-known lawyer, scholarand political commentator.

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