Opinion - News Analysis   

Differences in the designs of development

Amit Bhaduri

Unless the course is changed from a corporate-led capitalism to decentralised employment-led growth, resistances will overwhelm the government.

IS THIS government simply tolerating unwillingly the two most important Acts that can empower considerably the poor and the most vulnerable in this country? Those who watched closely the tortuous process through which the National Rural Employment Guarantee Act (NREGA) and the Right to Information Act (RTI) came into existence, know well that neither this government nor the bureaucracy was ever enthusiastic. Without the support they received from the National Advisory Council headed by Congress president Sonia Gandhi, these two Acts would not have been possible. And now in less than a year's time the Union Cabinet is reported to have decided to restrict significantly the reach of the RTI Act. This has forced open the broader issue of what is going to be our design of development.

The NREGA is not meant to be simply a mechanism for transferring income to the poorest sections in rural areas. Through creating decentralised productive economic and social infrastructure assets in rural areas through the panchayats in accordance with the spirit of the 73rd Amendment, it could begin to steer development towards a different path. This requires greater fiscal autonomy for the panchayats, a faster pace of expanding the programme based on a largely self-selecting and self-supervising mechanism for implementation. An essential precondition for this is a transparent and accountable style of government at all levels of Central, State, and panchayat administration.

Little has been done by the Central or the State Governments to increase the fiscal autonomy of the panchayats. The share of the panchayats in terms of total State expenditure, devolution of taxes, and revenue transfer from the States have been declining in most States since the mid 1990s. While no State seems to be in a mood to let its fiscal power get decentralised, the Central Government is equally adamant not to let go its bureaucratic control by becoming more transparent and accountable through the right to information. A way out of this political impasse is to create a separate account for the panchayats to draw funds from nationalised banks, and make their subsequent creditworthiness dependent on the rural assets they create. For this purpose, if necessary, the Fiscal Responsibility and Budget Management Act should be revised. Providing money for productive decentralised investment to generate employment in rural areas at this stage of India's development is more important than anything else.

Actions speak louder than words. This government does not appear serious as was evident from the pronouncements made by the Prime Minister as he travelled in the Vidharbha region. In announcing a Rs.3,750-crore relief package for farmers, he carefully avoided the most critical issues. The risk small and marginal farmers face in commercialising agriculture without subsidy and insurance under a WTO regime, and the need for a safer and more effective government supported system of providing rural credit by the government.

He overlooked the crisis that has engulfed Indian agriculture. Going by official statistics, between 2001 and 2006 in Andhra Pradesh, Karnataka, Kerala, and Maharastra nearly 9,000 farmers committed suicide. According to the estimate of the Ministry of Home Affairs, some 120 to 160 out of a total of 607 districts are "Naxal-infested." Supported by a disgruntled and dispossessed peasantry, the movement has spread to nearly one-fourth of Indian territory. And yet, all that this government does is to say it is a menace, a law and order problem. Is it a deaf government unable to hear the restlessness of the poor? Is it a blind government, unable to see how its own ruling ideology of development is worsening the situation?

The ruling ideology

The ruling ideology in the government, propagated by the International Monetary Fund and the World Bank, is that the corporations will deliver us from poverty by raising the rate of economic growth. So we have a situation where 12 tribals were shot down in Kalinga Nagar, Orissa, when they were protesting the takeover of their land. Striking workers in a Gurgaon automobile factory were brutally beaten up. Cultivated land is being handed over to a business house in Uttar Pradesh. And, unconfirmed reports suggest that negotiations are on to displace thousands from 64 villages to hand over land to a corporate to extend Mumbai.

It is idle for this government to pretend information about development can be separated from decisions in other areas of administration. Money taken under any head will impact on the development budget directly or indirectly. Take a most blatant example. Despite the RTI Act, this government is yet to come clean on Enron, or to hold accountable those who made that deal. Under the guidance of the very same team that was responsible, Dabhol is being resurrected without transparency at enormous public cost. The government had money to buy out GE and Brechtel stakes at $305 million or more, which those two foreign multinationals had acquired at only $20 million. The government finds money for that, but the Finance Minister grumbles when he has to pay a minimum daily wage of Rs.60 to the poorest rural workers.

Like nuclear waste, the fallout of this ideology is pervasive, subverting our innate sense of justice under the fiction of economic growth. Even without proper rehabilitation, we were told recently by the Prime Minister, the work on the Narmada dam must continue. In the cities too, slums would be demolished and livelihood destroyed without providing alternatives, for shopping malls and fancy retail trade. India has to shine in the eyes of its middle class. This simply will not work. Shining India will collapse once more under the growing distress and anger of the poor. Unless the course is changed from a corporate-led capitalism to decentralised employment-led growth, a million mutinies, popular resistances violent and non-violent, will overwhelm this government. For a government that believes it can hide behind a less transparent information act, time is simply running out.

(The writer is a well-known economist formerly with the Jawaharlal Nehru University, now with the Council of Social Development, New Delhi, and a distinguished professor at the Pavia University, Italy.)

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

A rescue and some issues
Dual fuel and tax-led gains
Time for Parliament to step in
The President has no red cards
Differences in the designs of development
The JVP makes its move
Corrections and clarifications
Expose the mole
RTI Act
Congratulations!
Whither `Tunda'?

Copyright © 2006, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu