|
Book Review
A case for inclusion
S. L. RAO
|
Appraisal of the economic reforms to redress the widening inequalities despite sustained growth
|
INCLUSIVE GROWTH IN INDIA — Agriculture, Poverty, and Human Development: S. Mahendra Dev; Oxford University Press, YMCA Library Building, Jai Singh Road, New Delhi-110001. Rs. 695.
Books on reforms and their effects have tended to focus on some or all economic aspects and sectors. Most writers argue that growth since 1991 cannot be attributed merely to “reforms” from that year but to policy changes in the 1980s. They say the growth is sustainable despite some ups and downs.
Mahendra Dev, a distinguished agricultural economist, who has extensively studied the economics of deprivation in India, is now Chairman of the Commission on Agricultural Costs and Prices. He looks at economic growth and equity in the post-reform (1991 onwards) period in India. He argues “that faster and inclusive growth should be achieved simultaneously rather than in a phased manner.” Strategies of growth and equity must be integrated and we must frame “macro pro-poor policies and people-centric policies.” However, unlike the “socialistic pattern” of Indira Gandhi, he is not arguing for redistribution, but for simultaneous protective measures for and provision of opportunities for the poor and the deprived.
Inclusion
He examines inclusive growth in the laggard agriculture, employment generation and poverty reduction, social sector, and reduction in regional and other disparities. He concludes that while growth has accelerated in the last 17 years, these four parameters of “inclusion” have deteriorated. He thus brings a much needed objectivity to the “India Shining” and “Incredible India” slogans swallowed by most of the Indian urban upper middle class.
The book is well-organised with conclusions and policy suggestions. It is supported by ample and relevant data.
For achieving equity, instead of redistribution through higher taxes and controls, he says equity is important for its own sake and higher growth. Reducing personal, rural-urban, and regional disparities will increase growth. It will do this by adding to demand and expenditures in the economy.
Skewed growth
Indian growth has been skewed towards services, not the real economy of agricultural and industrial goods and services. With 54 per cent of the population working in agriculture, agriculture’s low and declining contribution to the Gross Domestic Product (GDP) has to be reversed if poverty is to reduce rapidly. He demonstrates that land issues, irrigation and water management, credit, research and extension, and marketing must improve. Decline in public investment in agriculture was an important factor in its poor growth. He wants a holistic approach to water. Crop diversification was especially responsible for output growth in rain-fed and dry land regions which also have low productivity. This diversification also makes these farmers vulnerable to increased risk.
The poor record of agricultural research in helping agricultural growth can be corrected by local research to solve local problems. He should have taken a stronger position on the distortions in cropping patterns due to cheap or free power that have led to increasing water intensive crops in dry lands and degradation of lands.
Intervention
Despite higher overall economic growth, poverty decline during post-reform versus pre-reform period is not higher. Inequality declined more in the later (1999-2005) than in the earlier post-reform years (1993-2000) due to low relative food prices, higher employment growth especially in the non-farm sector and safety nets. However, inequality increased in the post-reform versus the previous decade.
He highlights the need for focused intervention for the 115-million hard-core poor. Food access must be ensured and malnutrition among women and children must go. Safety nets like the Public Distribution System (PDS), child nutrition programmes, education and health services for the poor need better monitoring with public accountability and social pressures.
Interestingly, he finds participation is better for schemes that hand out goods and services, while targeting is better in schemes that make cash transfers. Social safety nets must have both good targeting and participation.
Services and industry do not absorb employment. The national rural employment guarantee could be “the biggest social security programme” for unorganised workers. But delivery systems must improve, leakages stopped and adequate training and capacity building given to local agencies like district and village administrations, irrigation and public works, and panchayats.
Social security
There is a strong case for social security for unorganised workers. Labour flexibility can come with simultaneous provision of social security. However, the delivery of schemes of income support, employment guarantee, health and education services to tackle their deprivation, and schemes for the adversities of old age, maternity and sickness is inefficient and ineffective. Some states are worse than others, causing considerable regional disparities.
Both Central and State governments must substantially increase expenditures on agriculture and social services. Simultaneously, measures to make the administrative system more capable, responsive and accountable in identifying the poor and delivering services efficiently must be introduced. This is one lacuna in the book. It does not examine how our administrative bureaucracy can be made efficient, effective, accountable and less wasteful.
This book signifies a welcome emphasis on inclusiveness with growth. Policy makers, scholars and the lay public will find it stimulating.
Printer friendly
page
Send this article to Friends by
E-Mail
Book Review
|
