T C A Srinivasa-Raghavan: Redistribute assets, not income

LINE & LENGTH

There was a 14th century English logician, Ockham (Occam) by name. He enunciated a principle known as Occam's Razor.

It says that the simplest explanation (or theory) is usually the correct one. It is useful to apply this to Maoism in India, which makes a simple and hugely appealing point: if you want to alter existing arrangements, use force. When I have to deal with the government and the public sector, I feel the same.

As Jehanabad, where almost 400 Maoists surrounded the town and raided the jail, shows, the option of using force is becoming increasingly attractive to an increasing number of people.

This is where Friar Occam comes in.

The simplest explanation is that these people are unhappy that they are kicked around in the most shameful manner by those who, if not rich, are at least not poor. Life is sheer hell for the landless. (The pejorative term kameena comes from kamin, or landless in Urdu and Pushtu.)

I have followed the Indian poverty debate""economics sociology, and politics""for the last quarter of a century. And I am now bored out of my wits by it because it focuses on the wrong variable, namely, income.

But the variable to focus on is assets. Income is important but assets are even more so. We have been so busy redistributing income that we have forgotten to redistribute assets.

This has given the Maoists an entry. It fits in neatly with their ideology.

It is politically easier and more profitable to focus on income, rather than assets. Also, historically, the Congress drew its support from landowners, and after a short flirtation with land reform in UP that lasted barely three years, it stopped.

The BJP's support base was the petty trader. But this is now being wooed by the CPM through its opposition to FDI in retail. The BJP should begin looking to the rural poor as well.

But while it is easy to understand why these parties have shied away from assets re-distribution in the rural areas, how can we explain the Communists giving up their programme of assets redistribution? After Operation Barga they just stopped.

What has been their record since then? In relation to income redistribution, how often do you hear the comrades fight for assets redistribution? Why has the CPM not held a gun to the UPA government's head for this in the same way as over interest rates and privatisation?

The answer is clear. The CPM has become a party of the industrial petit bourgeois and has committed itself to protecting the current assets structure, not re-distributing it.

This provides both the Congress and the BJP""but more the Congress""with an important opportunity. Instead of focusing on income, these parties should shift their focus to assets. Land reform should become the main election plank for 2009.

There are six political reasons that I can think of why they should adopt this strategy and will benefit from it.

First, people are cynical about income programmes because they have seen them not just fail but help only those who have assets.

Second, both are looking to win the votes of the poorest of the poor, that too in the poorest states, namely, UP and Bihar. These states are also among the worst off in India.

Third, the only way to defeat the Maoists is to steal their platform. The market will not lead to land reform, and history shows that no country has been able to progress without systematic and enduring land reform. Even Korea, with so little to re-distribute, did it.

Fourth, since the Communists have vacated the rural poverty space in favour of the public sector petit bourgeois, it is a cherry ripe for the plucking by the national parties.

Fifth, in UP and Bihar, the BJP and the Congress don't have significant landowner support. This is with the Yadav parties.

Sixth, the enlargement of the asset-owning class in rural areas will do more for their permanent vote base than income programmes. Ask the CPI(M) in West Bengal.

There are three economic reasons as well. But these are secondary to the political ones above.

One, land reform will lead to sustained increases in rural demand. Its persistent deficiency cannot be remedied by shortsighted income programmes, which dent the Budget and therefore the government's ability to provide genuine public goods.

Second, the problem of credit against collateral will be eased and more rural credit can legitimately be given by the banks. NGO-led micro finance need not replace the moneylender of old.

Third, enlarged ownership will result in greater pressure for rural infrastructure, notably irrigation.

Then there are the sociological reasons.

First, asset ownership will confer the much-sought-after dignity on the poor. Look at West Bengal again and at Kerala.

Second, there is no empowerment like economic empowerment in the context of the panchayati raj. Land means having voice in the rural areas.

Land reform today is good politics. The BJP and the Congress, which have very little landowner support in UP and Bihar, need to see that.