Why India's inequality is a policy choice, argues Capital and Ideology

In the debate over inequality, caste has played a key role. Instead, an ambitious agrarian reform, backed by a more redistributive tax system would have been more helpful, argues Thomas Piketty

In addition to health and education, the other structural policy that might have contributed to a major reduction of social inequality in India is of course redistribution of property, especially farmland. Unfortunately, no agrarian reform was attempted or even considered at the federal level. Broadly speaking, both the Constitution of 1950 and the principal political leaders of independent India took a relatively conservative approach to issues of property.
 
This was true not only of the leaders of the Congress Party but also of Dalit leaders like Ambedkar, whose battle for “the annihilation of caste” (the title of his censured 1936 speech) involved such radical measures as separate electorates and conversion to Buddhism but eschewed any measures that might have undermined the property regime. This was partly due to his wariness of Marxists, who in the Indian context tended to reduce every thing to the question of ownership of the means of production, which in Ambedkar’s view led to neglect of the discrimination to which Dalit workers were subjected by non­Dalits in the textile factories of Mumbai and to the pretense that such problems would solve themselves once private property ceased to exist.

 
Ambedkar aside, it is interesting to note that there were many debates in India in the 1950s and 1960s on the usefulness of agrarian reform as well as on the possibility of basing quotas on “objective” family characteristics such as income, wealth, education, and so on rather than caste.
 

Such proposals encountered two main counterarguments: First, many people insisted that caste was a key category for reducing social inequality and orienting government policy in India (both because caste played a real role in discrimination and because it was quite difficult to measure “objective” characteristics); and second, some feared that no one would know how to end agrarian reform once it began, besides which there was no certainty of reaching agreement about the best way to combine income, wealth, and other parameters to define reservation quotas and, more generally, to allocate shares under a policy of redistribution.

 
All of these Indian debates are essential for our study for several reasons. First, we have already encountered more than once this fear that any re­distribution of wealth or income would open Pandora’s box and that it would be better never to open it than to face the problem of not being able to close it once opened. This argument has been used at one time or another in many different contexts to justify keeping property rights exactly as they have always been. We saw it raised during the French Revolution, in the British House of Lords, and in debates over the abolition of slavery and the need to compensate slave owners.

 
It therefore comes as no surprise to find it coming up again in India, where property inequalities were compounded by status inequalities. The problem was that the “Pandora’s box argument” did nothing to palliate the sense of injustice among the disadvantaged or to alleviate the risk of violence. Indeed, since 1960, large parts of India have been rocked repeatedly by Naxalite Maoist uprisings pitting landless peasants descended from the former untouchable and aboriginal populations against landowners of upper­caste descent.
 
These conflicts have unfolded against a background of land tenure and property relations largely unchanged since the days of Hindu feudalism as consolidated under the British, a legacy that still continues to feed the spiral of hostility based on identity and intercaste violence.

 
An ambitious agrarian reform, backed by a more redistributive tax system to pay for better health and educational services, would have helped to pull up the disadvantaged classes and reduce Indian inequalities. Research has shown that limited experiments with agrarian reform in states such as West Bengal after the Communist victory in the 1977 elections did result in significant improvements in agricultural productivity.
 
In Kerala, the agrarian reform that began in 1964 coincided with the turn to a more egalitarian development model than in the rest of India, especially with respect to education and health. By contrast, those parts of India where land tenure was most inegalitarian and property most concentrated experienced the least rapid economic growth and social development.

 
Reprinted with permission from HarperCollins India