At our institute, The Indian Institute of Planning & Management (IIPM), we teach that education at all levels has to necessarily translate into economic wellbeing, which then translates into economic growth, which has to further translate into pan-national economic development. If it does not, then there is something severely wrong with the said education system. Similarly, we also teach that economic growth has to necessarily translate into national wellbeing, and if it fails to, then there is something structurally wrong with the way the economy is organised. Invariably, in the classes that we conduct at IIPM, one name that surfaces as a classic metaphor for poor economic organisation is – India! Post liberalisation, barring initial hiccups, the Indian economy had been consistently sustaining annual growth rates above 5%. But unfortunately, this growth could just touch upon a very minuscule percentage of the Indian population, while the majority of the population remained completely untouched (Reports state that only 2% to 3% of Indians have gained from this ‘growth’). Those are only a few sunrise industries, handful of industrialists, and of course, all those major economic and consulting companies worth their names (who made money simply by spawning ‘intelligent discourses’ on the Indian growth story) who benefited from the growth. Also benefiting from the Indian growth is a handful of American, European and Korean multinational companies who made their money by successfully creating a shameless insatiable appetite within that fortunate 3% population. On the other hand, in the same India, and within the same growth-jingoism, a majority of the population remained stagnated. A study commissioned by the Organisation of Economic Cooperation and Development (OECD) states that in the last seven years, that is between 1997 and 2004, almost 1.8 million jobs have been lost in the organised sector (with manufacturing losing the most – around 1.2 million jobs). The report also states that over the past decade, employment in the agriculture sector has shrunk from 62% to about 54%. Probably that’s the reason why the only thing that has kept pace with the Indian growth is the expansion of slums in the metros. Reports state that the migration (from other parts of India to metros) has been so rampant that slum dwellings have almost doubled over the past two decades. No doubt, there has been some growth in employment in the services sector; but by no means has it been able to offset the job losses in other sectors. All in all, as the economy grew, it left more and more people unemployed, displaced and largely disconnected. And that is probably the reason that even after tall claims and mass propaganda of the Indian growth story, none of the political parties could re-elect themselves for a consecutive second term (here, West Bengal has been a bizarre exception!). This probably is also the reason that for every measure that any government has taken – both at the State and the Centre level – the same has been met with rigorous revolts from people at large. For example, of late, wherever the issue of SEZs has cropped up, people away from the cities targeted for giving away their properties have been completely averse to the concept as they saw it akin to more of a pan-Indian land-loot activity, rather than an economic opportunity. They strongly felt that not only would they lose their land, but also at the same time suffer a situation that would not translate into any form of productive engagement; ergo, leading to vehement revolt. Another case in point is the recent imbroglio in Rajasthan. Ironically, amidst all the growth, the Gujjars of Rajasthan have to fight and agitate for caste-based quota so that it becomes easier for them to sneak into a government job. The moot question is, if things are so bright with the economy, then why is it that thousands of people in many parts of the country are revolting, agitating and clamouring for such caste based quotas (or against them, as in the recent past with respect to educational institutions and jobs)? If there has been any growth in employment and related opportunities, it has only been in the unorganised sector, which is currently employing almost 400 million of the Indian workforce. But then, such a huge proportion of India’s workforce is devoid of any social security; and on an average, around 70% of them earn less than the wage levels prescribed in the Minimum Wages Act. What can be a bigger irony than this that the Indian real estate, which is on fire for the last few years, has been employing the maximum number of unorganised workforce, and that too at a pittance! Yet, unfortunately, the Indian growth story has never highlighted the contributions of these people. As a nation we truly grow when our government and industry take charge of creating the right kind of framework for the unorganised workforce through institutional and infrastructural support, and also develop an enabling environment for the creation of millions of jobs in the organised sector. Till the time such glorious “growth” gets converted to food in the mouths of the hungry millions, labelling India as an economic success story can only be called obscenely delusional, if not straightforward nutty.
- 17 June 2007 |
- Dr. Arindam on Indian Economy