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25 October, 2010

Growth without justice

BRP Bhaskar
Gulf Today

Last week the Indian capital market came up with Rs2,360 billion when the government offered a block of shares of Coal India as part of the ongoing public sector disinvestment programme.

Also last week, hundreds of thousands of people, most of them members of tribal communities, gathered at two remote villages of Maharashtra and Madhya Pradesh as part of the ongoing struggle by the poor to save their land and livelihood.

The two events brought into sharp focus the contradictions inherent in India’s current developmental effort. It is producing two Indias: one flush with money and ready to grab good stocks and the other desperately poor and struggling for survival.

In theory the state has long been committed to growth with justice. The Constitution ushered in three years after the country gained freedom gives primacy to “justice — social, economic and political” in its statement of objectives. However, as the economy grows injustice too has been growing.

In the early years of independence, the government opted for a mixed economy in which the public and private sectors will have their places, with the former commanding the heights. Many huge public undertakings were established in keeping with this policy. Some of them enjoyed monopoly in their areas of operation. The private sector’s functioning was subject to curbs.

The globalised economy demanded a change in approach. The restrictions on the private sector were eased. Many areas which were earlier the public sector’s preserve were thrown open to private players. Foreign capital was allowed in.

The government also decided to divest part of the shares of the big state undertakings to raise funds for developmental programmes. Progress in this direction was, however, slow as organised labour controlled by leftwing parties put up stout resistance.

The course change resulted in acceleration of the rate of growth of the economy. As the economy boomed, pundits prophesied that the country would emerge as a major economic power by the middle of the century, closely behind China, which had made the policy shift a decade and a half earlier.

Business fortunes rose rapidly. Forbes magazine, the chronicler of the rich, counted 69 billionaires in the country this year. It also predicted that the wealthiest Indian, Mukesh Ambani, now at fourth place in the list of the world’s richest, might move into the top spot by 2014.

The Indian stock market was the one least affected by the global meltdown sending shivers around the world. It was also the earliest to recover from the shock. Coal India’s rich haul — through sale of its shares the government fetched as much as one-fourth of the national budget — shows investors are hungering for good stocks. Naturally, Indian Inc. is in an exuberant mood.

The two rallies in Maharashtra and Madhya Pradesh, organised to mark the 25th anniversary of the Narmada Bachao Andolan (Save Narmada Movement), are a stark reminder that millions in the country do not share the exuberance. Most of the participants were Adivasis rendered homeless by the massive Narmada river project.

The mega project envisaged diversion of the waters of the Narmada by constructing a chain of canals and dams to irrigate lands in MP, Maharashtra and Gujarat, provide drinking water to 40 million people and generate 1,450 megawatt of power.

Medha Patkar, a young research scholar, who visited the project site in MP 25 years ago, was deeply moved by the plight of the Adivasis whose homes were submerged by a reservoir. She stayed back, founded the Narmada Bachao Andolan and has spent the rest of her life fighting their battle as well as others whose livelihood is affected by similar projects.

Originally, the project cost was estimated at Rs64 billion. In 30 years the government has spent Rs392 billion and many more billions are needed to complete it. Critics claim the project goals could have been achieved through alternative schemes at much less human and environmental costs.

Since the globalisation process began in the 1990s, the Centre and the states have sanctioned many more projects that adversely affect the poor, especially the Adivasis.

A World Bank study of 2008 showed one-third of world’s poor are in India. It also revealed that rate of decline of poverty has fallen since 1990. Evidently, as the number of billionaires goes up the number of the poor also goes up. While the government talks of inclusive growth, more and more people are getting excluded.

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