In many ways, the Naxalite movement, including its geography, provides a window to an Indian countryside in perpetual developmental distress, which has only been worsened by the neoliberal New Exonomic Policy.” This is a quote from the Introduction to India’s New Economic Policy: A Critical Analysis, which has 13 papers and an introduction.
The word “Exonomic” is rare, nor is it precisely defined. As far as one makes out, it is used for sudden external and exogenous shocks, such as earthquakes, climate changes, terrorism and so on — stuff that conventional Economics cannot anticipate or explain. I haven’t been able to figure out whether the use of “Exonomic” is a typo (instead of Economic), or there is something Freudian at work. In some segments of academia, certain expressions are regarded as nasty insults — LPG (liberalisation, privatisation, globalisation), neo-liberal, Washington Consensus and so on.
The mere mention of such phrases makes people froth at the mouth. This book’s favourite is the New Economic Policy (NEP), with neo-liberal a close second. The old NEP was, of course, Lenin in Russia in the 1920s, which ought to make the expression a bit more respectable to this volume’s authors and editors. The introduction ends with the unexceptionable statement, “Our propositions are simple and straightforward: Read the book. Think on the issues debated. Argue. And get engaged in building a better world.”
The first proposition is as follows. Disaster struck in 1991, thanks to NEP. Those policies “began to be articulated in the 1980s”, but were institutionalised in 1991. This is the Exonomic shock. Life was hunky dory before that. Poverty, hunger, malnutrition and deprivation exist in India. No dispute on that, and yes, many human development indicators are worse than in sub-Saharan Africa. How come nothing improved substantially between 1947 and 1991, a span of 44 years? The National Sample Survey Organisation’s large-sample surveys are conducted roughly at five-yearly intervals.
The last one was for 2004-05. We are waiting with bated breath for the 2009-10 version. Till 2004-05 surfaced, we had 1999-2000, and academics, who had persuasions similar to those who have contributed to this volume, argued poverty must have increased and employment growth must have decreased. Just so that we have the facts right, around 1950, poverty ratios (percentage below the poverty line) were 50 per cent and around 1980, they continued to be around 50 per cent. For three decades, the alternative didn’t get us very far. The year 2004-05 produced 27.5 per cent and between 1999-2000 and 2004-05, employment growth also increased. Thus, change the nature of the debate. The poverty line doesn’t capture everything, private expenditure on education and health for instance. We must redefine it, so that poverty ratios continue to be 50 per cent. How can poverty decline? It isn’t about quantity of employment; it’s about quality. One must deduce such authors pay scarce attention to facts. NEP being a scandal is a matter of faith. The lowest 10 per cent of India’s population has bought bicycles and ceiling fans since the 1980s and has moved away from firewood to LPG. This isn’t a matter of faith; these are NSS facts. Yet, we must argue India’s poor don’t know what is good for them.
Let us not be too uncharitable. Leftist intellectuals often ask the right questions, they simply come up with the wrong answers. NEP hasn’t meant an end to government discretion. Eight of the 13 papers (Amitabh Kundu, Swapna Banerjee-Guha, Shipra Maitra, Bharati Chaturvedi and Vinay Gidwani, Ipsita Chatterjee, Rohit Negi, Rupal Oza, Raju Das) touch on land issues in one way or the other, particularly urban land. Most sensible people would argue that the evidence suggests one should make things transparent (not just land but all natural resources) and remove discretion, introduce proper urban planning, manage rural to urban migration, and plan for an urban India. In that sense, NEP is incomplete, because required reforms haven’t taken place. Having set up an imaginary windmill of NEP, one must tilt at it. Of course, we have an agrarian problem, one that is special to small-holder agriculture and fragmentation of holdings. Surely, the answer cannot be to keep people restricted to small-holder and subsistence-level agriculture. Stated differently, policies need to be framed to manage a rural to urban transi- tion, a farm to non-farm transition and a self-employment to wage-employment transition.
“In turn, the main outcome of inequality is poverty, because inequality is exploitative.” Poverty and inequality are two separate concepts. The first is absolute; the second is relative. Does one mean inequality in outcomes (income, expenditure) or access to inputs (health, education, financial products, information, technology, markets, skills, law and order)? In a period of rapid growth, increased inequality in outcomes is perhaps inevitable (the right question being asked). How do we manage that? But why should there be inequality in access to inputs? That brings us to another set of issues. Are there market failures in markets for these inputs? Does the government have the capacity to deliver these and should it? Does the government possess financial resources? Those 44 years have made some of us think on the issues and we have arrived at somewhat different answers.
On government’s financial resources, it is also a matter of scarce resources and prioriti-sation. With three authors from Jawaharlal Nehru University (JNU), I would love to see a paper in a similar volume. Since there isn’t a clear market failure in higher education, how much does it cost to run JNU and how many rural schools and primary health centres can be run with that? How much of slum population can be resided in the prime real estate JNU occupies? That would be engagement towards building a better world.
INDIA’S NEW ECONOMIC POLICY: A CRITICAL ANALYSIS
edited by Waquar Ahmed, Amitabh Kundu and Richard Peet
Rawat Publications, 2011
(xii)+321 pp; Rs 895