Development – a note for discussion written for the Kashipur Solidarity Group
August 18, 2007
By Nagraj Adve
Any discussion of ‘development’ first needs to make clear what we mean by the term. Many tend to equate development with economic growth, whereas that concept itself needs to be scrutinized. Some tend to equate development with the building of infrastructure, such as dams, roads, and power. In more recent times, this imagining of infrastructure has altered to include IT parks, and malls. Other frameworks of looking at development – one with which we would be more comfortable – would include the spread of schools, primary health centres and growth of employment.
Whereas these and particularly the last are important in considering development, I feel we on the Left ought to begin any discussion of development as one that improves people’s quality of life, well-being, and feeling of happiness. This implies the reduction of insecurities, the removal to the extent possible of structured oppression, and the progressive democratization of society. These are not possible under capitalism, and this is one of the many reasons why we struggle for its overthrow or transformation. [1] Focusing on development partially such as on the generation of jobs, or universal health care, does not deal with other structured oppressions that prevail, such as say of sexual minorities, or violence within the family. Nor does the improvement in one area (class) lead necessarily to the improvement of another (say, sexuality or gender). [2]
However emancipatory our notion of what development ought to be may be, we need to begin with the spread of capitalism because that is a concrete fact (though the extent to which it has spread and taken root in India is contested, and not just by the far Left). The spread of capitalism is relevant to our discussion because in recent times, struggles have erupted or repression is happening in areas that are experiencing the spread of capitalism to this scale for the first time in their history with the entry of large, particularly large private capital. This is happening particularly to people in areas facing the corporate takeover of natural resources and in areas in which the presence of the state has hitherto been consciously limited. People in these areas have suffered for decades from the persistence of underdevelopment, and now are abruptly being made to face the ravages of large capital. As examples, UAIL and Sterlite in Orissa, Jindal and Tatas in Chattisgarh, bauxite plants in parts of Andhra, etc. This violent entry of capital is posited by elites and in the media as bringing ‘development’ to these areas. But in reality because of consistent neglect by the state for decades, adivasis and other underclasses in these areas don’t have the skills to benefit from the jobs this entry of industry would generate, nor the incomes to benefit from its products. Instead their lives get overturned in so many ways: their homes, lives, community, history, forests, and the environment, both local and beyond. They get further divided by their reality and get caught in the dilemma of underdevelopment; such as in Kashipur, where adivasis and dalits with no land or little land working as wage labour in an underdeveloped agriculture from which they earn Rs 15 a day are now faced with construction work from a company and earning Rs 60 a day, a company that is overturning everyone’s lives around. In this manner, a small section among them become useful for industry for a little while as manual labour building roads, walls, etc, and are then abandoned to the vagaries of the migrant labour market.
This spread of capitalism in India did not start in the 1990s. [3] The policy choices made in the 1950s and thereafter – import substitution, state support for large projects, dams, power generation, mining, and the development of heavy industry – lay the ground for what followed in the 1990s. Some people tend to view this part of the development process positively as the coming of age of an indigenous capital and self-reliance. Whereas this is not to be dismissed, I would urge we view the post-independence trajectory from the eyes of those who paid the cost: such as the millions of people – again a lot of them adivasis and dalits – who were displaced by these large projects, just as the people are paying today. This development trajectory kept in mind the inability of Indian capital to invest in certain areas because it was not developed enough and hence the state did: power generation, roads, railways, infrastructure. Now we see the withdrawal of the state from some of these areas. Significant choices were made that give it a particular direction and these choices were dependent on the balance of class forces at the time. [4] Some like to say that the post-independence development trajectory was made with the purpose of employment generation and getting people out of poverty. To the partial degree this happened, these were only incidental achievements: I feel the primary goal was the development of Indian capitalism, and in that they succeeded.
‘Development’ since the 1990s
For purposes of convenience, let us move to the 1990s and thereafter. If we remember our definition of development as that which improves people’s quality of life, well-being, and feeling of happiness, then except for a small elite who have benefited, for the vast majority of the people of this country the development process of the last 15 years has been either a stagnation or a disaster, and its effects are continuing and will continue to unfold. There’s certainly been an expansion of the middle class and elite in this country. Unofficial, informal estimates of how large the middle class is range from 125 million to 250 million. But even for a section among this number, whereas their incomes have undoubtedly risen, their lives are mired in new uncertainties and insecurities – the rise in medical costs, the lack of pensions, declining interest rates for their savings, the lack of secure employment. For the rest, which are 850-900 million, i.e. almost a billion people, their role in this development process is either as supplying labour power and/ or being its not-so-passive victims.
Let me at the outset make a bleak assertion – it does not matter to either industry or the political class whether a section of India’s population lives or dies. Of that 850 million or so I’ve mentioned above, there’s a section that is completely out of all political calculations. I estimate that percentage at about 15-20 per cent of the population, and they are mostly dalit, poor women, adivasi and the old. This is over and above the large section of the poor who are useful to the system as the “reserve army of labour”. You’d think that industry would be interested in people’s purchasing power rising so they can buy its products. You’d think that governments would be interested in retaining their vote. But industry does neither think that far nor cohesively and perhaps capital cannot spread fast enough to need that all of India’s 1.1 billion people have basic purchasing power. It’s also possible that with the increasing exports and trade reforms, the relative importance of the internal market for products has declined, at least for some products and sectors.
As for the political class, notwithstanding NDA’s loss due to people rebuffing economic reforms in 2004, basically the political class is not undermined because either one party or another gets elected. It’s been Congress, BJP, Congress or whatever variant. So that bottom 20 per cent does not matter for either capital or the political system. If true, this assertion has serious implications not just for millions of people in this country but also for the strategies of political movements.
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A note by PUDR from about 20 years ago said that development had three aspects, policy, implementation, and people’s response. (To this, before response, I’d add impact on people but that is implicit in the categorization) . It also made the point that these three aspects “cannot be looked at in isolation from each other”, that doing resulted in errors such as “consider[ing] policy alone without a thought for what is actually happening at the ground level, or regard[ing] the problems arising out of the development process as a simply a case of ineffective [implementation] or non-implementation” . [5] While discussing development, we need to look at the process in its totality and bear in mind that at each stage certain political and political economic choices are made which give development a certain trajectory. Given which, let me state without ambiguity that the neoliberal reforms of the 1990s have amounted to nothing but a massive transfer of wealth from the poor to the rich. This redistribution has been carried out and is being carried out via: more intensive exploitation of natural resources (which is also the actual or potential wealth of the people), via intensification of work and greater hours of work, via declining real wages of workers, and via inflation, which undercuts any small rise in workers’ incomes. [6]
Some Measures that Hit the People:
This redistribution of wealth needed a whole slew of new policies, alteration of old policies and laws, and the non-implementation of existing law as part of the withdrawal of the state. [7] I can touch on only a few of these. But I’m going into it to indicate how the change in policy happened in so many different areas. Hardly any area of significance was untouched; it could not be. As activists caught up in immediate situations to deal with, we tend not to be able to follow many of these areas but it is happening simply all over the place. And since some of the changes are happening at the individual state level, we sometimes don’t even get to know until some time after. Some of these measures may seem distant from people’s lives, but they have impacted, directly or indirectly and will continue to do so.
1. Reduction in public expenditure
Among the significant measures carried out was a reduction in certain kinds of public expenditure, such as the reduction in investment in agriculture, in subsidies on food, on fertilizers, etc. This directly followed World Bank conditionalities to reduce the fiscal deficit.
Regarding food, two major changes regarding food policy during the mid-1990s – aimed at reducing fiscal subsidies – were: the targeting by the public distribution system (PDS) of households below the official poverty line and indexing the sale price of foodgrain distributed under the PDS to costs incurred by the Food Corporation of India. The former policy effectively removed millions of households – just above the official poverty line, but still indigent, and anyhow what is the official poverty line is itself too low – from the PDS net. The latter has increased costs for families on both sides of that line: doubling of the price of foodgrain for households above the poverty line, and by 80 per cent for those households below the poverty line. [8] Partly because of this and partly because of other reform measures, foodgrain absorption has fallen. According to Utsa Patnaik, it was 155.7 kg per person on average (for 2000-2003), even less than it was for British India in 1933-38, when it was 159.3 kgs. She has argued that if one were to consider poverty estimations by calorific intake, then rural poverty would be as high as 87 per cent [9]!
2. The Attack on Agriculture
No conception of development can work in India without agriculture as its starting point. This is so for two obvious reasons: about 650 million people are dependent on it for their livelihoods and all the 1.1 billion for their access to food.
Given this is the case, it is astounding the level to which Indian agriculture has been pushed into crisis. Public spending on agriculture has been reduced: the spending on agriculture, allied activities, irrigation and flood control of 15 major states fell from the already low 3.48% of gross domestic product (GDP) in 1990-91 to 2.16% in 2003-04. Spending by the Centre has also declined. [10] As a consequence of reforms in the financial sector (discussed below), agriculture credit declined and it became more difficult for small landowners to get bank loans and recoveries from them became more stringent. Their immediate incomes were also hit by rising input costs, such as the price of seeds, power, diesel, and the removal of subsidies on fertilizer. Sale price in many commodities were hit by opening the economy to agricultural imports and by falling prices worldwide. At the same time, a shift to greater commercial crops was encouraged and this consequently happened in certain regions, generating profits for some but also exposing farmers to greater risk. And when risk hit, it hit hard. The government itself estimates that over 1,12,000 farmers have committed suicide in India since 1993 and this is likely an underestimate. This attack on agrarian India is reflected in the fact that the average monthly per capita expenditure of rural India is an unbelievably low Rs 503. And this, mind you, is just an average, including rich farmers and large landowners; millions of rural people get to spend much lower than even that each month. [11]
But those are just dry figures. P. Sainath has written extensively on these policy measures and the varied effects on people’s daily lives in Vidarbha: the sale of household assets to repay loans, the inability to repay loans, the loss of dignity, the inability to pay for marriage and sickness, the consequent return of the dominance of the traditional moneylender who is also the trader who provides the seeds at a high price, the fall in quality of seeds and output, the work women are now doing as a consequence to make ends meet, the large-scale migration taking place. He writes in the context of farmers’ suicides there, but what he writes of Vidarbha also applies to varying degrees elsewhere.
Because agriculture is getting more unviable, people are moving out of it. Overall, there has been a decline in the number of total operational holdings (plots actually tilled) by 41 lakh between 1992 and 2003. For these four million households, agriculture is simply not worth their while. With rising input costs, it’s been most difficult for those with small plots of land to carry on: operational holdings below 1 acre have declined by 47 lakh in this period. [12] And a disproportionately high number of marginal and small holdings are owned by dalits, adivasis, lower backwards and other disadvantaged sections.
The crisis hits small landowners and agricultural labour even harder because land relations have not altered in any fundamental way since independence. The capacity of dominant castes to undermine land reforms and land distribution in most states (PUDR reports have highlighted this class attack in the case of Bihar) has meant that size of land holdings are still very unequal, and many are very small. Marginal farmers ( i.e. those whose holdings are less than 1 hectare, or 2.5 acres) own two-thirds the number of holdings, but this is only about 17 per cent of area. Further, land fragmentation has happened due to increase in number of households. This, along with rising input costs, declining prices of some agricultural produce, and other policy measures discussed above has meant that agriculture is getting increasingly precarious for millions of small farmers. Many of the suicides have happened among marginal farmers and small farmers, and this is alarming because marginal farm holdings number almost 60 million!. [13]
And if small farmers in large numbers are themselves finding agriculture unviable, it immediately follows that the demand for agricultural labour will reduce. Hence those at the bottom of the caste and class scale in rural India may be getting the worst hit but they slip under the radar. Those among them who can migrate to the cities but as discussed below, they are getting pushed out of there too.
It is going to get worse. Large capital has begun to enter Indian agriculture in a way it never has. Indian agriculture is being shunted from one that focused on the production of food and food security to one that promotes agribusiness. It is quite handy for agribusiness that Indian agriculture has been allowed to lapse into the crisis it has. Just like taking over a private company is easier when it is sick (and they often are made sick before privatization) , the same is happening to agriculture on a larger scale. This promises to be a massive disaster for the poor, since agribusiness has no use for the marginal farmer, the agricultural labourer, or the indigent consumer. Agribusinesses are driven, like all private capital, by profits, not by welfare considerations.
I might mention that in March 2006, President George Bush launched the Rs 10 billion Knowledge Initiative in Agricultural Research and Education. It’s been called the second Green Revolution, one that “brings Indian agriculture under the direct control of US corporate houses”. Among the board members of this new Initiative are the American supermarket chain Walmart and the seed MNC Monsanto. [14] New policies and practices in agriculture include the direct purchase of farm commodities, FDI in food processing and marketing upto 100%, setting up markets for private companies to acquire the produce (even as procurement by the government at a minimum support price has declined). For instance, dozens of chaupals set up by ITC have been reported. For now, they are providing an assured buyer and a slightly higher price to farmers. But this will expose farmers to the whims of the market and against large companies in the long run. Studies of retail chains elsewhere – such as in the US and Canada – have shown that they have benefited the farmer little and profits are sucked up by large corporations and a variety of middlemen. Bringing large MNCs into agriculture will skew what is grown, catering to First World and Indian elite needs, which has higher purchasing power – such as growing fancy flowers which are exported, jatropha as a biofuel, or maize to produce ethanol – all rather than basic foods.
Contract farming too is gaining ground. Contract farming tips the scale in favour of large companies and against the farmer, such as in Punjab where farmers have been exposed to the whims of Pepsi and other companies. Sucha Singh Gill says the government entitites work “virtually like an agent of these companies.” [15] It will also tip what is produced away from food crops to socially useless goods or only elite needs for the much richer global market. Contract farming will also nudge the agricultural economy towards certain economies of scale because it is more profitable that way and will keep out the small farmer.
Overall, then, small and marginal farmers are being pushed out of agriculture and business being nudged in. This is the US model being applied here, and to the degree that it succeeds, it will be a disaster for millions. [16] Displacement from industrialization, dams, SEZs, etc are finally getting the attention it deserves, but by far the largest displacement is happening due to the crisis agriculture is being ruthlessly pushed into.
3. Reforms in trade
Reforms in trade is another and related area in which the effects are huge. Under the WTO regime, India was to lower tariffs and remove all quantitiative restrictions (on imports) by April 2001. These were removed for a number of products, including a range of agricultural and agro-based goods. As a consequence, agricultural imports shot up between 1997 and 2004, 270% in volume and 300% in value. [17]
At least three-fourths of India’s tariffs are ‘bound’, i.e. they have a ceiling beyond which they cannot be raised. (It can set whatever tariffs it likes on other imports, which are not ‘bound’.) A verage import duties have been reduced: from 35 per cent in 1997-98, they fell marginally to 32 per cent in 2001-02 and are much lower now (I couldn’t get more recent data in time). This hasty exposure of the economy has been widely felt. For instance, the prices of rubber, coconut, coffee and pepper fell sharply, which immediately affects workers who work in these plantations. Urban markets are flooded with consumer items, toys, electronic gadgets, shoes, from other countries; many of these goods come from China. [18] Inundated with cheaper imports, many small factories are closing down, further affecting employment and investment. Of the many industries affected, perhaps the most alarming is the increased imports of textiles and fabrics, since lakhs of workers in places as far flung as Bombay, Kanpur, Surat, Bhiwandi work in textile units that are closing down. And at a time when the prices of primary commodities is falling worldwide, and when US and other first world countries are putting up trade barriers and hugely subsidizing agriculture, opening out India’s economy in this abrupt fashion can be disastrous, particularly when other safety nets and employment opportunities are not in place.
4. Financial Sector Reforms
One factor that helped employment in the 1980s was bank lending in rural areas and to small businesses. Public sector banks had exceeded their priority sector lending target of 40% by March 1985. It reached a peak of over 45% of net bank credit by June 1988. But financial sector reforms saw the shutting down by public sector banks of loss-making branches, less willingness to enter underdeveloped areas, less willingness to lend at risk to the poor, particularly small farmers. Again, like in labour reforms (see below), the attack preceded 1991. Priority sector advances were allowed to decline to 42.3% by June 1990 and 41% by June 1991. Serious analysts of banking rightly asked at the time about this transformation in banking philosophy: ” … to what end? Informed by what kind of banking culture? And serving what kind of bank clientele? … The foreign and new private banks will promote a different culture, increasingly taking the entire banking system away from the social concerns which have far from lost their relevance.” [19]
This is exactly what followed. Crucial sectors – agriculture, small-scale industry, other small borrowers – which need bank credit to flourish, began getting less. There have occurred drastic reductions in the flow of credit for agriculture and for underdeveloped regions. Foreign banks have focused on ‘retail banking’, which is in profitable urban areas, and playing the money market. If foreign banks penetrate the Indian financial scene even more than they have, a lot of small borrowers may be get denied access to credit, intensifying these tendencies. It’s not just foreign banks, it’s the philosophy that has changed. By now focusing on the profit line, even public sector banks have begun to get much stricter with non-payment by small defaulters even as large companies merrily continue to pile on unpaid borrowings: bad debts now amount to well over a lakh crore. This harshness in retrieving loans to small borrowers has led to a number of protests by small farmers in some states, particularly in Punjab.
5. Targetting Labour
One significant way in which wealth is being transferred from the poor to the rich is by greater contractualization of work, outsourcing, freeze in pubic sector employment, lowering of real wages, and speeding up and intensification of work in industry. Maruti’s is a classic case. By far the biggest car maker in India, it has outsourced parts of the production process, forced an illegal lockout to then target its union and established workforce, dismissed a number of workers, used VRS to throw out several hundred, hired a huge contract workforce and intensified work using just-in-time production systems.
Some aspects of the attack on labour, such as contractualization of labour, outsourcing, the reorganization of production such that component parts are made elsewhere and merely assembled in plants, VRS, are all anti-worker practices that existed earlier but accentuated in the 1990s. In the 1980s, lockouts were resorted to by industrialists to target workers and weaken unions. Jairus Banaji has argued that “without the extensive outsourcing networks created in the 1980s, the voluntary retirement schemes of the 1990s would just not have been conceivable” . [20]
Some of these tendencies intensified in the 1990s. What is significant is also that unions, who perhaps could have been one resister to the wider economic reforms of the 1990s, entered that phase attacked and already weakened. VRS was intensified and became part of industry policy to evade the limitations of the Industrial Disputes Act. They were nudged to do this by a circular from the Ministry of Finance, which talked of tax breaks for companies that would downsize! Because of other measures as well, wages as a percentage of total production costs declined in the 1990s even as productivity and profits rose sharply. Basically, people are working more and harder but earning the same or less. One big myth propagated about growth is that it will generate employment. But it does not necessarily happen. The growth of the 1990s was such that employment did not keep pace leading to what has been called ‘jobless growth’ – employment was 0.9 per cent in the 1990s while GDP grew 5-6 per cent a year. Basically, people were working more and faster than earlier. The terms/ class relations were going against labour.
The 1990s also witnessed an intense attack by capital to amend labour laws, particularly VB of the Industrial Disputes Act (which pertains to government permissions and process before closure, lay-offs or retrenchment) and section 10 of the Contract Labour Act (which pertains to the process of contract labour being made permanent). It is to the credit of organized unions that they have not got their way fully on this one [21], but capital is getting around the limitations in these provisions by the indiscriminate use of VRS, which has often not been voluntary.
Also, in the 1990s, individual states began bending over backwards to invite industry, by offering all manner of financial sops and by using the police to throttle the most basic demands of workers. This is not new. The police attack on Honda’s workers was hardly an aberration in Haryana; as some analysts have pointed out, it was a regular occurrence in the late 1970s. But states ingratiating themselves with capital intensified in the 1990s with individual states having much greater say in investment policy, and with the entry of large foreign companies in many sectors: capital, whether domestic or foreign, is basically told: you are welcome, don’t worry about the workers, we will handle them.
There also was, starting in the 1990s, an ebbing of working class concerns from public consciousness. For the most part in fact, public sentiment bordered on sarcastic hostility. A hostility reflected in, and in turn fed by, anti-worker pronouncements of the Supreme Court, most notably on the right to strike. [22] This intensification of some older anti-worker practices along with new developments combined to constitute the most serious assault on workers in India we have ever seen.
6. Reforms in Urban Areas
Reforms in urban areas came a little later. It meant in practice the most sustained attack on the urban poor in the form of destruction of jhuggis, relocation to far flung areas, attempt to remove land ceiling in urban areas, the removal of rent control. Though the attack in Delhi dates back to the Emergency, when seven lakh people were forcibly displaced, for the first time, the attack in urban areas is happening all over the country, in numerous large and medium cities: Mumbai, Delhi, Surat, Kanpur, Bhubaneshwar, Kolkata, Bangalore, Bhopal. The details of the attack and the (inadequate) resistance is well-known so let me just make three points relevant to the ‘development’ discussion: one, the legal framework for the attack is being set in place with the introduction of the nation-wide JNNURM, whereby cities are entitled to funds from the centre only if they carry out urban reforms. So far, 63 cities have been identified, including all cities with a population over 1 million, state capitals and some of cultural/ religious significance: Rs 1,26,000 crore has been earmarked over 7 years, i.e. Rs 18,000 crore a year. The JNNURM Mission Document says: funds cannot be used to create wage employment; housing to the poor cannot be given free of cost; public-private partnerships, a euphemism for privatization, will be the preferred mode for implementing projects; “reasonable” user fees will be charged from the urban poor. Among the mandatory refoms to access funds are the repeal of the Urban Land (Ceiling and Regulation) Act, 1976, which will allow builders and large capital to acquire land in large tracts. The government has already approved 100% foreign direct investment in real estate. [23]
Two, there is a remarkable and shameful consensus on the need to rid the city of the poor among the upper middle class, other elites and even among middle class sections. This was reflected and supported by anti-poor judicial pronouncements by the Courts. Few areas reflected the shift in ideological consensus since the 1970s as this area. Many of the PILs and cases going in Delhi’s courts have been filed by cooperative housing colonies, filled with ‘good’ families. Three, a crackdown in urban areas accompanied by the crisis in agriculture referred to elsewhere in this note effectively means a catastrophic strangling of the poor from both sides: pushed out of agriculture and pushed out of cities. As greater urbanization takes place with migration and with a secular trend towards urbanization in India, this two-pronged attack will mean tens of millions will be dumped on the city’s margins with little urban resources. A section of them will provide labour power to the city – in factories and in houses – at what is below minimum wage, let alone a living wage.
7. Disinvestment and Privatization
One hugely contested and debated area since the 1990s has been disinvestment (sale of government assets) and privatization (handing over management control to a private party, usually accompanied by share takeover of over 50%). It was contested partly because these public assets were often sold at below market rate. But the effects on workers and people at large concerns us here. Usually, when privatization of a public enterprise has happened, the private company states public and it is even sometimes in the contract that no workers will lose their jobs for a period, usually a year. However, the privatization of specific enterprises (such as Balco and Modern Foods, or airports) was followed by the dismissal of the established workers and union representatives. Then a section of the work was stopped at these factories and contracted out.
The crux of privatization is that it targets established workers and that it makes access to the product or the service dependent on the buyer’s capacity to buy. In the case of Modern Foods, it was feared, that bread would become more expensive. In the case of hospitals, we can see what happened when BL Kapur, an old respected charitable hospital, was privatized through the back door. The privatization of insurance – a big issue of debate 6-7 years ago, almost forgotten now – has the potential of raising prices of premiums and stopping cross subsidization of sectors that LIC used to practise.
In this neoliberal agenda of privatization, nothing is sacrosanct. The latest area is something as essential to people’s lives as water, what with the struggle over the handing over of 23.6 kilometres of the Sheonath river to Radius Water Limited for a period of 22 years. Already, we have witnessed the huge rise of private water companies in all manner of water services: bottled water, water purifying instruments, and now they are attempting to privatize water distribution in cities, despite disastrous effects and bitter struggles, extensively chronicled in Colombia and elsewhere. The declining access of safe water for ordinary people, overuse by socially useless industry and change in agricultural patterns to crops that consume more water, has gone hand in hand with the entry of private sector in water. The World Bank predicted as far back as 1998 that the global trade in water would be 1,000 billion dollars. As it is, access in India to irrigation and drinking water is mediated by one’s caste, with dalits having the least access. Also, 62% of our households – 118 million homes – already do not have drinking water at home. While 300 million households are forced to use community taps and handpumps, cities already water-stressed are seeing the spurt of golf courses and water theme parks, such as Essel World. [24] How can water privatization promote well-being and development if people’s access to water is so dependent on their capacity to purchase this most essential commodity?
8. Foreign Investment
The entry of foreign investment is propagated as a marker of development and those who oppose it are often labelled ‘anti-development’ . One reason given is that the country benefits from the technology transfer when such is involved. There is reason to believe that the gains from technology transfer have been limited. But more importantly, to look at ‘development’ consistently from a people’s perspective, the question is not whether technology has been transferred or not but whether it is appropriate for people’s basic needs and how that technology is applied to serve those needs. The question is fundamentally one of politics, not of technology.
Let us consider foreign investment specifically in mining and natural resources since this is one area close to our concerns. Foreign companies investing in natural resources was enabled with the New Mining Policy of 1993. Successively over time, higher and higher levels of foreign shareholding stakes have been allowed to foreign capital and more and more kinds of minerals to private capital for the first time. Individual states are bending over backwards to invite capital to their states to mine resources. [25] This is happening most intensively in the mineral-rich states of Jharkhand, Orissa and Chattisgarh, which have each signed dozens of MOUs with large mining companies, Indian and foreign.
There are many problems with this entry of MNCs. Large multinationals [26] which have been enabled entry have in mind not just the growing Indian market but also the markets and much greater spending capacities of the elites and the military industrial complex of the developed world. This would mean exploitation of resources, loss of livelihoods, and environmental damage on an unprecedented scale.
One of the biggest reasons given by those who support this kind of investment is the jobs they will generate. However, we have found in specific projects that the jobs generated are a few hundred because of increasingly capital-intensive industrialization. And with the already prevalent structural inequalities of caste and class, and adivasi/ non-adivasi mainstream society that directly influence job opportunities, the better-paying jobs from these projects tend to go to the privileged, who tend not to be the locals who are actually the most affected by these projects. The beneficiaries from these mining and other projects, both in jobs and as the user of the products, are the urban elites, in India, and elsewhere as well as consumers. The jobs that some locals get tend to be low-paying construction work or other menial work and even these jobs are ephemeral. [27] What happens to them once a road gets built, or a factory comes up or a conveyer belt?
The lot of the local population tends to be displacement, loss of houses, lands and livelihoods, serious environmental hazards, water sources and streams, etc drying up. A brief look at a few projects historically in Orissa itself makes clear that there has never been any meaningful rehabilitation of the people affected; again they tend often to be adivasi or dalit or perhaps because of it. NALCO, set up in Koraput district in the early 1980s, displaced 2,500 households, of which nearly half were adivasi, 10 per cent dalit. The Upper Kolab dam project displaced over 3,000 households; in both cases the partial rehabilitation was slight. Of the 2,938 households displaced by the Muchkund hydroelectric project in Koraput, only about 600 were rehabilitated, less than 20 per cent. These projects worsen a process of land alienation that adivasis already undergo either by land takeover by the Forest Department or because they cannot repay small loans to moneylenders and pledge their land against the loans. A study suggests that in Koraput, Dhenkanal, Ganjam and Phulbani districts of Orissa, over half the adivasi landholdings was lost to non-adivasis over a 25-30 year period. A study by Indian Social Institute far back as 1993 said that “in Koraput district alone, over 1,00,000 tribals have been dispossessed of their land [which includes] 1.6 lakh hectares of forest on which they depended for their livelihood”. [28]
Walter Fernandes and others have extensively documented the extent to which adivasis, dalits and other indigent communities have paid the price for what was understood as ‘development’ : their number runs to several lakhs. This development paradigm also undermined the political will to rehabilitate these lakhs of victims of the “temples of modern India”. It is nowadays an even worse situation in that there is neither the political will nor, in some areas, the land for an adequate ‘land for land’ rehabiliation programme. [29] It is even worse because foreign investment is intensifying, particularly in adivasi-populated regions. For instance, in the few years since the state of Chattisgarh was formed, the state government has signed over 50 MOUs involving investment of more than Rs 51,000 crore, and as our friends have stated, ” ‘development’ and ‘progress’ … crucially depend on the displacement of people from their lands and livelihood, in a state where 76.48 per cent of the people depend on agriculture” . [30]
9. State Terror
Repression Inherent to Development: As the effects of this neoliberal development trajectory began to be increasingly felt in the 1990s, enormous resistance developed. Though this is the area where we work and get our hope from, I will not go into resistance in its detail since the facts are well known among us. Let me just make a couple of points that I think are relevant. One, many of the struggles we are witnessing are of people resisting the attack on their lives, livelihood, natural resources and property by industry and government. However, few in that sense are struggles for transformation, even when the group carrying out the struggle is ideologically one for transformation. The context has become far more hostile. Two, notwithstanding this, these struggles implicitly (and sometimes explicitly) offer a critique of the entire development paradigm. Three, as resistance has grown, repression has become more commonly used to push through ‘development’ down people’s throats. In fact it is not an exaggeration to say that repression is an intrinsic part of ‘development’ . [31]
Repression has increased in India through the physical use of police and paramilitary forces, through firings and beatings, through rape and repression. This may take acute forms in states of the northeast, or the Salwa Judum in Chattisgarh as these states are opened out to mining interests [32], or brutal attacks such as Kalinga Nagar and Nandigram. But less visible firings have become much more a commonplace now and far more frequent. For instance, the recent PUDR-PUCL team to Rajasthan found that 15 firings have taken place in the state in the 2-3 years that the Vasundhara Raje government has been in power. In other states and even in Delhi, it’s become common for police to fire on workers, on ordinary farmers, and on people simply protesting for a fair share of water and electricity.
Besides firings, physical attacks and assaults on women, the use of law to target movements has increased. The number and vagueness of extraordinary laws have increased, such as the much-discussed Chattisgarh Special Public Security Act 2005 and the Unlawful Activities (Prevention) Act, 2004 which incorporates provisions of POTA. The vagueness of its wordings (such as the definition of ‘terrorist’ and terrorist acts) and its inversion of ordinary law (such as the Chattisgarh Special Public Security Act, where even ” tendency to disrupt public order” has been deemed a crime) is precise in its vagueness – meant to target anyone and everyone who dares to oppose state policy and state action. There is also an increasing tendency to ban organizations (and their politics) by using the Unlawful Activities Prevention Act.
But dangerous extraordinary law aside, it is more often IPC provisions – or what is considered ordinary law – that are used to target movement supporters and to intimidate struggles. Consider the use of false cases by the Orissa government to undermine various movements in Orissa in recent times. [33] People protesting mining operations in Kashipur (2004-05, 51 arrested, now including Saroj Mohanty, all others on bail), mining by the Sterlite company in Keonjhar (April 2007, 6 arrested), the building of a boundary wall by Vedanta in Lanjigarha (April 2006, 36 jailed), pollution caused by Nepaj Sponge Iron in Rourkela (March 2006, protestors beaten by police, 118 arrested), the POSCO project (April 2006), construction by Bhushan Steel in Denkanal (Dec 2005, 25 arrested), Maharashtra Simplex (May 2005, 26 arrested), the laying of a foundation stone in Lower Suktel, Bolangir (May 2005, police entered people’s homes, beaten, 70 arrested), slum demolitions in Bhubaneshwar (May 2007, lathicharge, false cases), and in other movements have all faced beatings by police, arrests, harassment and false cases. There is a violent shrinkage of people’s fundamental right to protest and their right to a decent life and livelihood. ‘Development’ is being rammed down people’s throats.
This repression is also very much part and parcel of the urban industrialization process as workers strive for the preservation of the most elementary rights. Successive governments have done nothing to protect their basic rights of life and body. Be it the brutal attack on Honda’s workers. It received such wide publicity because it was uniquely captured on TV footage, and was widely protested against all over the country. Yet nothing happened to those responsible and perversely the workers and union are facing false cases in court. There have been less known, worse attacks than Honda. Be it the firing in June 1991 on workers in Dalla opposing the privatization of a factory owned by the UP State Cement Corporation. Nine died. Be it the killing of Shankar Guha Niyogi, in September 1991; the guilty industrialists have got away scot-free. Be it the June 1992 firing on workers in Bhilai simply demanding minimum wages. Sixteen died. Or be it the firing in February 1998 in Dharuhera, not far from the Honda factory, on workers of Pashupati Mills, who were demanding something as basic as provident fund, ESI and an annual increment. Four workers were killed. [34] In each case, the government, of whatever hue, did nothing. Every police repression and subsequent government inaction sends out a signal, both to the working class and to capital.
Development for Whom? When reflecting on the specific way ‘development’ unfolded in the 1990s, we need to view its trajectory not just from the perspective of the underclass but from the perspective of specific social groups within them, for instance from the perspective of dalits [35], women, advasis, minorities, etc. Its impact on each and responses to the process was different in each case.
Adivasis and dalits face an undue proportion of the displacement caused by industrial projects, dams etc. Besides being a large proportion of the landless labour, it is they who constitute a large chunk of the marginal farmers and labourers, who are getting hit by the crisis in agriculture. The decline in government jobs as a consequence of the freeze in secure public employment since the mid-1980s has again hit them the most. Cornering this shrinking pie is now resulting in tensions among disadvantaged communities as witnessed recently in the violent tensions between the Gujjars and the relatively more privileged Meenas in Rajasthan. All these specificities need more work but I did not have the time to look at more info and data on how it has played out for each, but this is extremely important.
Attempting a gendered view It has been argued that understanding the effects of globalization and reforms on women needs to look at the following: “basic conditions of life and survival; access to education and health services; division of time between paid and unpaid work, control over assets and control over own labour power; and the degree of social inclusion and freedom, including the degree of control in household decision-making, [and] freedom from violence”. [36]
To consider a few impacts of changes in the 1990s and thereafter: it starts with something as basic as life and death. More advanced technologies of sex determination has resulted in a declining female sex ratio in the 0-6 age group, from 964 females per 1,000 males in 1971 to 927 in 2001. There is a clear connection between rising incomes, dowry demands, traditional societies entering the mainstream and these figures for they are the highest in the more ‘advanced’ states (whatever that word may mean given this context), and in the most developed regions within states and even within Delhi.
Mechanization of agriculture has hit women agricultural workers hardest and this will increase as large capital enters agriculture. The targetting of PDS, the agricultural crisis, declining foodgrain and calorific consumption mentioned earlier in this note means again that – accentuated by patriarchy – women and girls are disproportionately affected. [37] Displacement by industrial and other projects and by SEZs also affects women disproportionately, because however hard the labour may be, women have a role in agriculture, and in the collection of forest produce. For instance, when we were examining census data in the districts around Kashipur, we found that 3 out of every 5 people in the region are engaged in agriculture. If one leaves out children, this means a high proportion of both women and older people. But the few jobs generated by these projects tend to be cornered by men and by the young. [38]
A gendered perspective on development first of all needs to consider the huge load of unpaid labour that women do within the household, and how that labour is central to production and reproduction under capitalism. Control over this work and it being accepted as ‘women’s work’ at all is part of the establishment of patriarchy. It would need women gaining control over land rights and other productive resources. It would mean widening the right to housing and giving women greater control over housing rights. Three areas women are entering in large numbers in urban areas are as domestic work, as piecemeal workers in outsourcing, and as casual labour in factories, such as in the garments sector. All of these areas need to be foregrounded in understanding the development process. (More to be written, lack of time, and of my understanding! )
Some issues before us:
Based on all the above, I would like to bring out certain questions relevant for our discussion on development and worth pondering about. Some have certain practical political consequences and hence all the more relevant. [39]
1. In my opinion, we are clearly witnessing the spread of capitalism in India to an unprecedented scale with horrific consequences. The current balance of class forces cannot halt its spread; it can only delay it and mitigate its consequences. We need to keep this spread firmly in mind while talking of the current development trajectory and struggles against it. Specific struggles do not take place in a vacuum and we cannot look at them in abstraction, without considering capitalism’s spread. Taking Kashipur for the moment, I think there is no option but to equip local people better to deal with the entry of capitalism on their terms and on better terms. This would necessarily mean pushing for the development of basic schools and health care funded and run by the state, much as a just development process would ensure the preservation of their traditional knowledge, culture and incorporate that in their formal learning experience, and indeed in ours. It’s a question how and whether the latter is possible within an encroaching capitalism. It’s equally a reality that the absence of schools and health care will not necessarily ensure the preservation of their culture, but will ensure they remain merely victims of the development process.
2. In a predominantly agrarian society, with 650 million people dependent on agriculture, the starting point of any meaningful development trajectory either in a local area or nationally has to start with agriculture. Land reforms and land redistribution are central to a sustainable and equitable agriculture (and development process), for most people need a plot of land for sustenance and dignity. But this is by no means the only major issue in agriculture nor is it sufficient. It is also a question for specific movements and for us about how agriculture can be a viable starting point if agriculture itself is in crisis. So along with land reforms and land distribution, a number of steps need to be taken to make agriculture viable. These include the building of small dams and check dams; assured farm incomes by reinvigorating a minimum support price mechanism; controlling the prices of inputs such as fertilizers, seeds and power to small and marginal farmers in particular; cheap and accessible credit; the cancelling of all farmers’ debts; pattas in the woman’s name; checking agricultural imports, and adequate wages for agricultural labour.
3. We need to comprehensively attack the mainstream focus on growth as the marker for a successful development experience. Growth has become an end in itself. As Amit Bhaduri has rightly argued, “Growth must be seen as the outcome of the full employment policy, not an end in itself.” [40] It is assumed by its supporters that the gains from a high growth rate will ‘trickle down’ in the form of benefits and jobs. Whereas some ‘trickle down’ does happen, it needs be seriously contested on several grounds. One, it is possible for high growth to happen with little increase in employment as happened in India through much of the 1990s when employment growth was less than 1 per cent, much less than the natural growth of population, let alone of those entering the job market. In more recent years, manufacturing employment has risen but is still poor. Two, the current generation of jobs from higher manufacturing growth will be offset by loss of employment in agriculture as it is pushed into crisis, hence overall gains will be little. It is now stated that employment growth has been 2.85% between 2000 and 2005 [41], but even that mind you is from a low base since employment was stagnant through the 1990s. Three, it is completely unequal growth, in India and worldwide. The terms at which employment is being generated is detrimental to labour what with the attack on organized labour and greater contractualization. As mentioned, wages as a proportion of production cost has declined. That inequality is also because workers being made to work more and faster, and that surplus is unequally distributed.
Four, unequal growth completely skews priorities, with greater focus on producing for and serving the urban elites. Resources get shifted to serving those who are better off in this unequal growth trajectory. Such as the takeover of adivasi lands in Madhya Pradesh to plant jatropha, which will make cleaner fuel to be used by the rich. Few are questioning instead why more cars are needed. Or diverting water for Coca Cola, whose bottling plants use lakhs of litres of water everyday and whose misuse has generated bitter resistance in Mehdiganj (UP), Plachimada (Kerala), and elsewhere. Or growing potatoes to make chips, such as Pepsi in Punjab.
Unequal growth may produce some ‘trickle down’ but its fundamental purpose is to generate both the surplus and the labour power needed to sustain the needs and lifestyles of the well-heeled. And unequal growth will mean that those in rural areas will continue to pay the price for it, with the loss of resources lands, forests, livelihood, water, houses, and community to serve urban elite needs. Looked differently, one simply needs to live an elite, urban lifestyle to cause harm elsewhere. Finally, runaway growth simply means the runaway use of finite resources, and since it is so unequal, those resources are not consumed to meet people’s basic needs.
4. Hence a lower growth trajectory that is sustainable is preferable over a higher, unequal one. But, how can we have that and yet generate sufficient employment, given that millions are joining the job market each year in India? Could one consider fewer working hours per day for each worker with employment for more people?
In his latest and accessible book, Amit Bhaduri spells out a fairly elaborate plan for greater employment. He focuses on the generation of non-farm rural employment; the involvement of direct beneficiaries as workers; participation of the poor; decentralized quick-yielding public projects; and the significance of the role of panchayats in carrying out decentralized development. (Even as he well alive to the limits of panchayats in participatory democracy, and argues that anyhow there exists simply no other organizational option in a country of our size and poverty). Such a large employment scheme would be funded by borrowing from the Reserve Bank, exclusively for use by gram panchayats and nagar panchayats. [42]
In focusing on rural non-farm employment, his plan surprisingly seems, on a quick reading of the book, to ignore agriculture and direct agricultural employment. One also wonders where the political will to implement his proposal would come from, but it would not be fair to lay that at his door; his book merits open and fair discussion.
5. There’s the theoretical question of the transition from a predominantly agricultural society to an industrializing one, the question being how and where does surplus get generated for investment in industry. The little I’ve read suggests that theoretically and in historical practice this surplus has been generated from agriculture, to be invested in industry. Given how the terms of trade have been moving adversely against agriculture in the 1990s, this may continue to be the case. On the other hand, given agricultural crisis, perhaps that role for agriculture is over. Given that real industrial wages in India have declined in the 1990s, even as industrial productivity has risen sharply, it’s clear that some of that investment is coming from industry itself. And also of course from foreign investment.
Some have argued that “successful development experience has been associated with two processes: accelerated employment growth that has allowed a shift of labour from relatively low productivity agriculture to relatively higher productivity industry and services sectors; second … rapid industrialization associated with rapid increases in productivity levels”. [43] I look at this sceptically, particularly since we know what increases in productivity actually mean for workers’ lives, working conditions and employment. It has meant speeding up of work, higher and higher targets imposed on workers unilaterally, the hiring of younger workers on contract and the dismissal of older workers (for details of such an attack on Maruti and Honda workers, see reports by PUDR and Workers’ Solidarity)
But this question poses an issue before us. In a more equitable society we might envision, from where would the surplus be generated? [44] And how do we as Left activists, working in an impoverished, predominantly agricultural society, look at link between agriculture and industry?
6. It is clear from our experience, and mentioned above, that the current industrialization trajectory, is to some degree socially useless, environmentally unsustainable, and wasteful in its consumption of resources that could otherwise have been used in agriculture or in people’s daily lives, such as water and power. This can be misunderstood or wrongly called an “anti-industrializa tion” position but is not actually so. The question is: what constitutes an appropriate industrialization strategy, what constitutes a more sustainable industrialization strategy, one that is more in synchrony with people’s needs (and can yet generate the levels of employment necessary)? This clearly would include the proper development of local markets and of agro-industry based on local produce and based first on local needs. For instance, Manjit mentioned the potential development of mango processing in Kashipur, (even though mango is a seasonal fruit) and another agroindustry I forget.
7. Finally, our critique of ‘development’ ought to underline the fact that capitalist development is simply not sustainable, and is premised upon waste of and the reckless consumption of resources at a pace at which they cannot be regenerated. It is increasingly being seen that in recent decades, total consumption has reached levels that are more than the Earth’s natural capacity to regenerate resources. The abominably high consumption levels by elites in the ‘developed’ world are primarily to blame but Indian elites are trying their best to catch up.
Reckless industrialization and consumption causes not just local pollution but has effects on a worldwide scale, as recent debates on global warming have confirmed. Global warming already has had devastating effects on other species, but the effects on the human race itself will be huge and will be felt differentially. It will exacerbate existing inequalities, including food and water scarcity, particularly in India. Agriculture in India will be hit for a multiplicity of reasons. Rising sea levels due to warming will mean flooding in coastal areas – which are often the most fertile – and over time salty sea water entering groundwater sources, upon which agriculture partially depends. Monsoons will become more intense and heavy rains will form a greater proportion of rainfall in a given season, causing floods and also affecting agriculture patterns. Millions live along India’s coasts and engage in agriculture or in fishing.
Dryland farmers will also be badly hit. A rise of 2 degrees will result in falling rice yields, says a study by scientists at the Indian Agricultural Research Institute. Also, according to the glaciologist Anil Kulkarni, a study of 466 Himalayan glaciers revealed that their surface area had receded from 2,077 sq km in 1962 to 1,628 sq km at present, a 21 per cent decline. If the recent news report on submissions made by Indian scientists to the Intergovernmental Panel on Climate Change is to be believed, Himalayan glaciers will shrink further to one-fifth their present area, from five lakh sq km to 1,00,000 sq km. [45] This will mean increased water (or even floods) for a while followed by even greater water scarcity than at present. All of these affect the very underclasses we mentioned above more sharply and they are already less equipped to deal with these crises.
These are not events of the future. It is already hitting us as the intense rainfall in Bombay two years ago in which over a thousand people died, and the current floods in ten states, affecting tens of millions of people, suggests. Global warming is altering nature as we have known it. [46] It is affecting something as massive and elemental as rainfall and ocean currents. The growing consensus is that there is barely a 10-20 year period before it becomes effectively irreversible. [47]
The global warming issue bluntly drives home to us the point that we all need to strive for a sustainable pattern of development. Such a sane development trajectory is not possible under capitalism. [48] It is yet one more reason, among many others, to reject capitalism in toto. Before it is too late.
Nagraj Adve
naga@bol.net. in
August 2007
Any reader interested in actively working in the areas of democratic rights or issues of sustainable development, please contact me at the email address above. You could also contact:
1. PUDR: pudrdelhi@yahoo. com (www.pudr.org).
2. Kashipur Solidarity Group: kashipursolidarityi ndelhi@yahoo. com
3. Delhi Platform (on issues of global warming/ sustainable development) : 22714228
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[1] By structured oppression, I mean all manner of structured oppressions that prevail in society and not merely class. Partly because some of these, such as gender, sexuality and caste, precede the development of capitalism, simply focusing on capitalism and class will not ensure the democratization of society to the degree desirable.
[2] This note does not touch on all of these issues, since they are too many and complex, difficult for a note written in a few days, but keep it in mind.
[3] This characterization of Indian economy and society was famously a subject of the rich Mode of Production debate in the 1970s. RS Rao writes, “The characterisation of a society as semi-feudal and semi-colonial indicates the society is not being led by a national capitalist class who by their control of the economy will not permit imperialist capital to take dominance over the economy but will compete with that capital and develop a contradiction with it ( Towards Understanding Semi-feudal, Semi-colonial Society, p. 124). Perhaps with the advantage of hindsight, I reckon Indian society at the time could be characterized as proto-capitalist, but by the present this for me is a settled question. India is firmly capitalist. To the extent that pre-capitalist social relations still persist, they unhappily coexist with capitalism and what’s more, capitalism is making good use of it for its own ends. This capacity of capitalism to use unfree labour prevailed in a much more developed agriculture, such as the use of unfree Mexican labour in Californian farms from the 2 nd World War up until the mid-1960s. “The bracero programme institutionalized a form of indentured labour in which more than four million Mexicans were brought to the United States to work as farm labourers stripped of the freedom to leave employers.” (Sasha Lilley, ‘The Bread of Conquest’, review of Richard Walker’s The Bread of Conquest: 150 Years of Agribusiness in California, Monthly Review, February 2006).
The characterization of the Indian economy has a bearing both on the political choices groups make in their struggle and strategy and how we view the development process and steps forward.
[4] Let me make clear that I don’t view the state theoretically as one completely in capital’s hands to do things completely at its bidding, even though the acute repression that has become an intrinsic part of ‘development’ may give one that sense. I look on the state as a more autonomous entity influenced by class, caste and other forces. It’s a measure of how weak class forces on the side of labour are at the moment that the state can get away with impunity with many things it does or does not do.
