Monday, January 31, 2011

Dialectics of economic development in India(The Hindu Open Page)

(co-authored with Dr.G.C.Gopala Pillai.)

                                           The concept of 'dialectical ' change

Dialectics of economic development in India

A broad consensus has emerged among experts in India that the government's focus should be on the larger concept of economic development rather than on the narrow, quantitative concept of growth. This is also a vindication of the fact that “trickle down” and social responsibility cannot be taken as a natural process within the ambit of free market and the political system in the country should execute a well-designed programme for the redistribution of resources. The mammoth loan-waiver scheme, the seemingly successful MGNREGS and the huge spending on other social sector programmes are classic examples of the government actively involving itself in a planned process of redistribution.
The impetus has come from the democratic forces acting in the country. The first decade and a half of economic reforms had led to a situation of jobless growth and increasing disparities. The public at large reacted sharply to this lopsided, exclusive model of development and the government was forced to introduce various policies to ensure social justice. People gave the green signal to this renewed interest in social spending and the incumbent government was voted back to power in 2009.
It is to be noted that this new “inclusive model” of development does not reject the objective of achieving high economic growth. In fact, it considers economic growth as one of the most important parameters without compromising the wider goals of social justice and environmental protection. The sustainable development paradigm that is emerging in India is a result of a long drawn out process of dialectics. Analysing at the macro level, the Nehruvian concept of planned, centralised economic development changed into a developmental model based on economic growth during the post-1991 reform period and, finally, it has synthesised into a model that takes into account both growth and redistribution. The active participation of civil society, the media, NGOs and environmental activists in the developmental process has forced the government to take care of the environment as well.
At the micro level, the dialectical process of development in India is now heading towards another direction. It has been widely agreed among all sections of society that industrialisation is necessary, at least to a limited extent, in ushering in economic development. The larger question that is emerging now is whether it is necessary to deprive the resources of a small group of people in order to bring in development, which may be beneficial to the public at large in the long run. Is development a zero-sum game, at least in the short run? Singur and Nandigram are living examples of this debate.
The people have rejected the zero-sum thesis and the focus has suddenly shifted to rehabilitation. The Central government came up with a comprehensive Rehabilitation and Resettlement (R&R) Policy. But the success of industrialisation of rural India lies in the efficacy of implementing and operationalising this policy. Whether the emotional value an Indian attaches to his land can be compensated materially or not is altogether another debate by itself.
The industrialisation experience in the state of West Bengal can be a valuable case study model, especially in the context of the series of electoral defeats to the ruling party. It is said that the worst time for a government is when it has initiated some reforms and has gone half-way.
When eco-development starts to pick up, the aspirations of people go up and the process of relative deprivation operates strongly in the minds of the people. They feel that their situation could have been better, although their “real” situation has already improved. It is this feeling of relative deprivation that projects itself as protests and movements and finally would opt for a change in government, especially when a substitute is available. It is to be remembered that a static society that lives in sustained chronic poverty would never witness any protest because the people cannot visualise any alternative and hence there is no relative deprivation. It is apt to remember George Orwell's line, “people never had a housing problem until they were told about it.” Thus it takes real courage for an incumbent government to embark on a hitherto non-existing policy of industrialisation.
The macro-dynamics of the dialectics of development is at a stage today where a new anti-thesis is emerging to counter the huge social spending of the government. The corporate sector has demanded a drastic reduction in fiscal deficit and the recent budget aims at fiscal consolidation. At the micro-level, the focus should be on evolving innovative ways of rehabilitation, prompt compensation and timely implementation.