Industrialisation For The People

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Industrialisation for the People, by the People, of the People AMIT BHADURI, MEDHA PATKAR

Those who oppose the current pattern of high growth are often branded as anti-development. In this article two well-known dissenters state why they oppose the present mode of industrialisation in India and set out an alternative path, starting with a few practical steps.

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conomic, political and social processes are interwoven inextricably in the course of development. Developmental economics is sterile without an understanding of the accompanying developmental politics, which involves the interaction of the State with the major actors. At the core of this politico-economic process is the role assigned to industrialisation. Thus the current debate about industrialisation is essentially a debate about how the economic and political factors would drive, in an interlocked manner, the transformation of our economy, polity and society, and it should not be trivialised into statistics about growth rates. Our dissenting voices about the current pattern of high growth are often branded as anti-development. Therefore we need to state why we oppose the present pattern of industrialisation in India, and how an alternative path can be charted out, starting with a few practical steps. There are five main reasons for our opposition as political activists, and associated with each there is a corresponding economic step that needs to be taken to initiate the alternative process of development within the realm of practical politics and reasonable economics.

1  Deepening of Democracy and People’s Rights

Amit Bhaduri ([email protected]) is with the Council for Social Development, and the Jawaharlal Nehru University, both in New Delhi. Medha Patkar is with the National Alliance of People’s Movements.

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Politicians, economists and commentators of all sorts from the media treat it as almost axiomatic that the standard of living of ordinary people cannot be improved without large modern industries based mostly on the historical experience of the west taken out of context. They tend to forget that England took some 100 years (1780-1880 approximately), and a similar time scale was involved for other western countries. During this period people had hardly any democratic rights based on universal adult suffrage. The same applies

even to later experiences like South Korea, China, etc, which are transforming faster. In contrast, India is a poor country where people have democratic rights, though the institutions that are necessary to secure those rights malfunction. It is essential to strengthen and expand these rights, e­specially for the poor; instead they are being violated continuously, most visibly through land acquisition by the State without their consent. The role of gram sabhas is not recognised, nor is the legal process fully and fairly followed. It is not just land but habitat after habitat, even generation’s old, common property resources, such as water bodies as also tree and forest cover, that is snatched away, resulting in the poor being deprived of their livelihoods and uprooted from their socio-cultural milieu. Compensation of all this loss with acceptable alternative livelihoods and a share in the benefit, rarely come true for decades, even generations. People resist the resultant trauma and fight for survival with right to life and livelihood within our constitutional framework. We support these resistances against land acquisition without people’s consent, we ask for a referendum of the people involved, proper rehabilitation and resettlement to correct the wrong headed policies of successive governments irrespective of the colour of the government that indulges in it. The effect of taking the p­eople’s view on land acquisition would directly influence the pattern of industrialisation, making it non-displacing or least displacing and truly employment generating, i e, benefiting the local communities who would be the investors of land and all natural resources as against the others who invest non-productive monetary resources. Moreover, this would also strengthen the democratic rights and participatory role of the people in planning development and community management.

2  Immediate Gainers and Permanent Losers It must be recognised that the benefits of     industrialisation come unacceptably slowly to the poor, because creation of jobs  in industry proceeds at a slow pace due to mechanisation and rationalisation january 3, 2009  EPW   Economic & Political Weekly

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of p­roduction in large industries. Labour transfer from agriculture to industry is a slow process, and in India the contribution of agriculture to gross domestic product has been falling dramatically, but the percentage of population in agriculture has been falling extremely slowly. As a result government policies have turned agri­ culture and much of the informal services into a refuse sector where the poor are    imprisoned in sub-human poverty without a reasonable chance of escape into the industrial or formal service s­ector. Despite so much hype about nearly double digit growth, regular employment in the organised sector grew at about 1%,   according to the government’s own admission in the Economic Survey. P­rivate     sector employ­ment growth did not even compensate for the jobs lost in the public sector. The two supposedly industrially dynamic states with large direct foreign investment, Gujarat and Maharashtra, were among the incredibly slower growing states in terms of employment (NSS 61st round; also, The Times of India, 7 July 2008). Nevertheless, this is not the entire story, perhaps not even the most important part of the story. The whole organised sector to which the corporate sector belongs, accounts for less than one-tenth of the labour force. Contribution by the unorganised sector, which includes most of agriculture, comes from lengthening the hours of work to a significant extent, as this sector has no labour laws worth the name, or social security to protect workers. Subcontracting to the unorganised sector along with “casualisation” of labour on a large scale become convenient devices to ensure longer hours of work without higher pay. Self-employed workers, totalling 260 million, expanded the fastest during the high growth regime, providing an invisible source of output growth. Ruthless self-exploitation by many of these workers in a desperate attempt to survive by doing long hours of    work with very l­ittle extra earning adds both to corporate profit, and to human misery. Government policies of fiscal austerity embodied in the Fiscal Responsibility and   Budget Management (FRBM) Act of 2003 largely to keep the stock market, the   f­oreign investors, the World Bank Economic & Political Weekly  EPW   january 3, 2009

and     the International Monetary Fund (IMF) happy meant stagnation of public spending as a proportion of GDP on e­ducation and health, and denial of minimum social security to the poor in almost all unorganised industry. The time scale involved before the poor people in this country can benefit from industrialisation by moving into industrial jobs is too long.   It involves several generations that    would have lost their land, livelihood and home in the meantime. How would they survive, how would their children face eventually the industrialising and globalising world without education, health and without a community to impart social values? To sacrifice the weakest members of several successive generations in the name of development is unacceptable and incompatible with basic democratic values and economic goals of equity. This utterly unjust and undemocratic route is also unsustainable in the longer run, as democratically elected government would lose its legitimacy in the eyes of the people if it should take recourse to Statesponsored violence to contain the despair and fury of the people. The symptoms are already unmistakable – movements in the name of caste, religion, regionalism, language, and the class anger of the dispossessed poor. They tend to divide us in numerous ways, and the wrong anti-people path of industrialisation has been a major contributory factor. We therefore have to struggle for more public action, more funding for health, education and social security for the poor, to force governments to abandon the false path of anti-poor policies in the name of “sound finance”. Sound finance must be targeted at diverting resources from unnecessary external and internal defence expenditure, less money spent on government pomp and splendour. This can be achieved by opposing all divisive policies in the name of religion, caste, regionalism, by working systematically for the poor, not by trying to fight terrorism of all sorts with blind military might, and accepting the legitimate demands of various communities through negotiations. The Indian f­ederal structure should be flexible enough to accommodate economically and p­olitically different degrees of autonomy for different regions to reflect popular demand.

3 Corporates versus People Until the recent financial crisis, it was an oft-repeated cliché that the capitalist market economy is good at creating wealth, but bad at distributing it, while for socialism it is the other way round. Such a wisecrack avoids facing the real problem. It is overlooked that how wealth is created determines to a very large extent how it is distributed. Ideas such as: create wealth by promoting corporations, and then distribute it through state action like high taxes, or through corporate social responsibility are wishful thinking, and avoid the real issue. If the state wants corporations to create wealth, it also has to provide them with the incentive to control and enjoy that wealth. Corporations would not create wealth simply to distribute it, except perhaps a minor fraction in some instances! Therefore we have to oppose corporate-led industrialisation, which bestows control to the corporations as the wrong track for improving the living standards of the people; instead a way has to be found by which wealth created mostly by the people would have an i­n-built mechanism for distribution in their favour without depending on a topheavy bureaucracy.   This alternative way of industrialising would involve the poor, mostly un­educated and illiterate people as a propel­ling   force for the creation and distribution of wealth. This involves (a) their p­articipation through moving towards productive full employment in the sh­ortest possible time, and (b) not destroying existing livelihoods without the people’s consent and providing them with alternative livelihoods, which, in the present context, means that industry must come up on vacant/uncultivable land. Economic growth would be the o­utcome of this strategy, rather than employment and other benefits being the   “trickle down” outcome of growth. This is a fundamental difference bet­ ween   our and the official economic p­erspective in the formulation of Indian economic policies.

4 The Alternative The alternative we envisage essentially requires starting at economically the most vulnerable points in our poor country with poor, unskilled people rather than rejecting

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them as useless for achieving high growth as is happening now under liberalisation, privatisation and globalisation pursued by the present government (right now in a denial mood due to the financial crisis and forthcoming elections). Most of our poor are in rural areas unable to make a living, and can earn enough in exchange of productive work that builds up social wealth. This is where we have to start by extending the employment guarantee scheme everywhere, in urban as well as in rural areas at a minimum legally stipulated wage for 300 days a year. This must be done immediately in areas of special need due to catastrophes, like the Kosi area, and areas of a­bysmal poverty even by Indian standard, like Kandhamal in Orissa. No large difference between rural and urban wages should be allowed so that cities do not gain at the cost of impoverished villages. Jobs should be available on demand, and would be largely self-­selecting without bureaucratic red tape because, if honestly implemented, only the very poor with no other reasonable source of income would opt for it. It can also be seasonally adjusted. The barrier to this policy is mainly twofold. First, it cannot be implemented effectively because bureaucratic mechanisms are inadequate for ascertaining that the deserving poor benefit, and productive work is offered to improve living conditions rapidly in rural areas. A precondition for this to happen is decentralisation of power to the lowest level of elected local government in the spirit of the panchayati raj, not through mere political pronouncements without intention. Neither the c­entre nor the states have been enthusi­ astic about giving complete autonomy of decision-making and even less financial autonomy to the local governments. Yet without these measures no large-scale p­roductive employment generation programme, which would benefit local communities under their own responsibi­lity, can have any reasonable chance of s­uccess. However, decentralisation is n­ecessary but not sufficient; all movements of the people must support it in the teeth of opposition of the vested i­nterest of politicians at higher levels (MLAs, MPs), higher bureau­ cracy (the Indian Administrative Service, the state bureaucracy), so-called economic and developmental experts housed by

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organisations like the IMF, the World Bank and the Asian Development Bank (ADB) working in unison with the Indian government, and hostile media-­persons who pretend to know. The simple guiding principle should be, “those who hope to benefit from these local projects must take the responsibility of their decisions”. They would gradually bear an increasing proportion of the cost from local efforts as they become financially stronger. An essential legal first step is to actualise the 73rd amendment with the help of Article 243 of the Constitution. The legal framework is mostly in place, and only an irresistible people’s demand will make it a reality.

Cost of Programme The cost of such a programme works out, at the most, approximately to 6 to 7% of GDP. This we must afford as the highest priority. There is no point in pretending to be an emerging superpower with nearly half of our population in extreme poverty without minimum healthcare, sanitation, nutrition, and education, with the largest number of illiterate and undernourished children, many crippled by malnutrition. Is this the preparation for entering the much talked about opportunities of g­lobalisation by our pro-liberalisation, pro-reform politicians? We can do better by (a) reallocating government expenditure and by cutting down public expenditure by politicians, which also has a symbolic value, (b) by raising taxes on the rich and on corporate profits rather than indirect taxes on the poor, and expanding the tax base, introducing a substantial tax on speculative cross-border financial transactions, especially in the light of the recent financial crisis, instead of pleasing the rich/ middle class and the IMF-World Bank-ADB with capital account convertibility, more foreign investment, etc, as essen­tial for growth, and finally, (c) increasing the c­entral government budget deficit as and when necessary to finance this programme by doing away with the FRBM Act.   The money for this programme would be held in a separate account with the nationalised banks and a credit line would have to be provided to the local governments/panchayats without interference from the central and state governments. The mechanism for supervision would be

mutual check and balance between banks and the panchayats, where successful projects would be rewarded with more funds at the next round for the implementing panchayat and bonus for the local branch of the bank, and penalty would be a gradual reduction of funds and no promotions for the concerned bank employees. The criteria for success and failure would have to be agreed between the two parties depending on the nature of the project beforehand. One important element in this context, especially relevant for the poor, would be the social component wage, e g, the first right to access/use to the local school, primary health centre, watershed, and/or warehouse facility which the local labourers under the employment guarantee scheme help in building. This is also the way to improve the “delivery system” to the poor. The current way of handling it by privatising is vicious; it simply prices out the poor from the essential services, which is their right as citizens of this country. We support a system of delivery based on local initiative to meet local needs with local accountability and responsibility to the maximum extent possible. In this way we can produce a large range of goods and services for the local market created through purchasing power generated locally in the hands of the poor and used by the poor for local exchanges to suit their needs. Only through this route they would enter the larger economy with their full economic rights as both producers and consumers. This means emphasising the domestic market as the centre of economic policy. Globalisation, trade liberalisation, etc, insofar as they shift the relative emphasis from the internal to the external market and the market meant exclusively for the richer section of the population, are counter-­productive. There­fore we are  op­po­ sed to the policies of gung-ho liberalisers, foreign investment or globalisation seekers. At this stage of Indian economic evolution, the priorities of our industrialisation and growth must be different from what governments of various colours seem to want. We want them to see reason and change track, and would continue to fight for it. The current crisis would have served an uninten­ ded historical purpose if it forces the government to emphasise the importance of deve­ loping the internal market for the poor. january 3, 2009  EPW   Economic & Political Weekly

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5 Composition of Output, and the Environment There is a misconception that we are impractical romantics, only interested in persevering the old world and the environment. This is untrue; we are interested in people, especially people who have almost nothing today and are continuously threatened with even losing the little they have. The composition of our GDP must change. It should be produced by the majority for their own use, while playing their rightful dual role as consumers and producers. The

composition of output, produced in this manner at the local level would require less energy; no big dam would be needed to provide electricity nor would expensive and dangerous nuclear power be required; production in general would become much less intensive in its use of natural resources like land, water, forest and mineral pro­ ducts. To reduce the pace of mindless urbanisation and day dreams of world class cities that suck in enormous natural resources for a handful of rich people by destroying the livelihoods of the poor is a

The Press Council: An Expensive Irrelevance A G Noorani

There are proposals to amend the Press Council Act 1978 to give the Press Council of India more powers, including the power to withhold advertisements. These are dangerous proposals. Contrary to conventional wisdom, the PCI does not need more powers. It needs a speedy burial by a statute. But that imposes on the media a burden it must bear if it is to deserve freedom. It must set up a credible, representative body to oversee a code of conduct drawn up by the media itself.

A G Noorani is a well-known lawyer, scholar and political commentator. Economic & Political Weekly  EPW   january 3, 2009

You praise the firm restraint with which they write – /I’m with you there, of course:/They use the snaffle and the bit all right/But where’s the bloody horse? –Roy Campbell, On Some South African Novelists.

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n a democracy a body charged with the duties to protect press freedom, to ensure maintenance of standards of journalistic ethics and to rule on violations of both is essentially a “Court of Honour”. It is like a Commission of Inquiry whose recommendations have no legal force by themselves, unlike an order of a court of law. The effectiveness of such a court of honour depends on its independence, integrity, competence, representative character and acceptability by the media. In Britain a General Council of the Press was established by the industry itself on a voluntary basis in 1953. It had 15 editorial and 10 management nominees. The proprietor of The Times was its first chairman. In 1989, the council, under its new chairman, Louis Blom-Cooper, QC and law correspondent of The Observer, decided to conduct a review of its role and functions. To use an Americanese, it decided to introspect. Our own Press Council of India (PCI) has yet to do that. Following the recommendations of a committee on privacy and related matters, headed by David Calcutt, QC, on 16 May

related task which only this alternative pattern of industrialisation focusing on local initiatives in rural areas can achieve. Saving and improving, through popular initiative, common resources of forests, rivers and the sea coast, cultivable land for the peasantry and those who now make a livelihood from related agricultural activities are the way forward for sustainable development without the state practising deve­ lopmental terrorism on the poor. We have to fight for all this here and now to save ourselves, and the generations to come.

1990 a Press Complaints Commission was set up, again, by the press itself. It appointed a committee of editors, headed by Patricia Chapman, editor of the News of the World, to draw up a 16-point Code of Practice for the Commission to enforce. David Calcutt, when asked later to hold an inquiry, recommended a statutory tribunal “with teeth” as did a committee of the House of Commons. All such recommendations were rejected. The Press Complaints Commission enjoys greater respect than the Press Council of India has done for as long as one can remember.

India’s Press Council The PCI was set up by the Press Council Act, 1965. It was swiftly dissolved during the Emergency in 1975 by an ordinance, but revived by the Press Council Act, 1978, its present charter. Its chairman have been retired judges of the Supreme Court; almost all of whom have sought power to punish the delinquent in the media. The Press Council drew up a 16-point code of conduct on 29 February 1990. On 18 November 2008 The Indian Express carried this report under the byline of Anubhuti Vishnoi: The Centre has proposed a slew of controversial amendments to the Act that governs it which include punishing newspapers that publish “objectionable material” by barring them from getting government advertisements. The C­entre’s proposals come even as it has asked the council to come up with its own amendments.

The PCI’s Chairman G N Ray told the correspondent “While derecognising newspapers from government advertisements as a punitive measure was one of the proposals initially made by the government, there is no finality on it still. The issue is

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