The decade of our discontent

P. Sainath
The Hindu, August 9

Sixty years on, rural India is a shambles. The most severe agrarian crisis since the eve of the Green Revolution rages on.

Rural India is a funny place. In 60 years we haven’t managed — except in three States — to push through any serious land reforms or tenancy reforms. But we can clear a Special Economic Zone (SEZ) in six months. In the sixth decade of our independence, structural and other inequalities deepen, and rural India is in big trouble

The first lead story on the front page of a major English daily four weeks ago was striking. A young man from Chandigarh had paid Rs.15 lakh for a ‘fancy’cellphone number. It wasn’t long before the rest of the media got into the act. Soon we saw his parents distributing sweets to mark their son’s achievement. Newspapers editorialised (in front page ‘news reports’) on how this reflected India’s new confidence. Our ‘aggro’ in the period of economic reforms and liberalisation.

It surely reflects something. A class exists to whom it is perfectly natural for a leading Indian magazine to act as luxury scout. Its publisher’s letter tells them that “for $115,000 a box, 500 limited edition Dragon Gurkha cigars are now available. In 80 year old camelbone boxes that once belonged to a Rajasthani ruler.”

The average monthly per capita expenditure (MPCE) of the Indian farm household is a long way from Rs.15 lakh. And further from $115,000. It is, in fact, Rs.503. Not far above the rural poverty line. And that’s a national average, mixing both giant landlords and tiny landholders. It also includes States like Kerala where the average is nearly twice the national one. Remove Kerala and Punjab and the figure gets still more dismal. Of course, inequality is rife in urban India too. And growing. But the contrasts get more glaring when you look at rural India.

About 60 per cent of that Rs.503 is spent on food. Another 18 per cent on fuel, clothing, and footwear. Of the pathetic sum left over, the household spends on health twice what it does on education. That is Rs.34 and Rs.17. It seems unlikely that buying unique cellphone numbers is set to emerge a major hobby amongst rural Indians. There are countless households for whom that figure is not Rs.503, but Rs.225. There are whole States whose average falls below the poverty line. As for the landless, their hardships are appalling.

It is not that inequality is new or unknown to us. What makes the last 15 years different is the ruthlessness with which it has been engineered. The cynicism with which it has been constructed. And the scale on which it now exists. And that’s at all levels, even at the top. As Abhijit Banerjee and Thomas Piketty put it in a paper on “Top Indian Incomes 1956-2000,” “The rich (the top 1 per cent) substantially increased their share of total income [in the reform years]. However, while in the 1980s the gains were shared by everyone in the top percentile, in the 1990s it was only those in the top 0.1 per cent who made big gains.”

“The average top 0.01 per cent income was about 150-200 times larger than the average income of the entire population during the 1950s. This went down to less than 50 times as large by the early 1980s. But went back to being 150-200 times larger during the late 1990s.” All the evidence suggests it has gotten worse since then.

Industry’s hostile response to Prime Minister Manmohan Singh’s meek comments on CEO salaries is just a sign of how entrenched such privilege now is. The editorials of most newspapers blew Dr. Singh out of the water. So it is odd and worth noting, that one of the very best pieces on concentration of wealth in recent times comes from the Executive Director of Morgan Stanley. (The Economic Times, July 9, 2007). “We believe,” writes Chetan Ahya, “that the social pressure arising from widening inequality has increased in the past few years, driven by globalisation and the rise of capitalism.” He finds the “rising social challenge on account of the rise in inequality” a worrying trend. He also finds that “the inequality gap in wealth is even starker … Our analysis indicate an increase in wealth of over $1 trillion (over 100 per cent of GDP) in the past four years — and that the bulk of this gain has been concentrated within a very small segment of the population.” Mr. Ahya rightly sees “social and political upheaval,” as the outcome of some directions we are taking. As in the case of farmers and SEZs.

Structural inequalities

All this comes atop existing structural inequalities in rural India. In 60 years, we never resolved the issue of land. Nor those of forests and water rights. Or of appalling levels of caste and gender discrimination. We never really addressed our structural or other inequalities. Now we’re working hard at making them worse.

Even at the start of the reforms period, the bottom half of rural households accounted for less than 3.5 per cent of total land ownership. The top ten per cent of households owned well over 50 per cent. That’s for all lands as a whole. If we took into account only irrigated land, the picture is more frightening. Add productive assets, and it gets still worse. In one estimate, over 85 per cent of rural households are either landless, sub-marginal, marginal or small farmers. Nothing has happened in 15 years that has changed that situation for the better. Much has happened to make it a lot worse.

The direction of policy on farming — central to rural India — is simple in its main idea. To take agriculture out of the hands of farmers and place it firmly in the hands of large corporations. Every move, every policy, only pushes this idea further forward. We are witnessing the largest displacement in our history. It is not happening in a dam or a mining project. It’s happening in agriculture. And we haven’t a clue yet what we will do with the millions we’re busy shoving off the land. This is not being done with tanks and bulldozers. We just make farming impossible for small holders. And we create no options for those whose livelihoods we so cheerfully destroy.

The early decades were at least decades of hope. There were improvements, significant if not impressive. In literacy, life expectancy, and other human development indicators. There was a sense that “India lives in her villages.” The slogan that caught the nation’s imagination, even if in wartime, was ‘jai jawan, jai kisan.’ The farmer was seen as carrying the nation’s future on his or her shoulders. (More normally ‘his’ since women are to this day denied property rights and not seen as ‘farmers.’) At least, that was the image.

Sixty years on, rural India is a shambles. The most severe agrarian crisis since the eve of the Green Revolution rages on, but does not hold elite or media interest for long. Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.) Millions move towards towns and cities where, too, there are few jobs to be found. Many move towards a status that is neither farmer nor worker. A huge pool of menial labour or domestic servants. (In one estimate, there are close to two lakh girls from Jharkhand in Delhi alone, in work of this kind.)

A credit squeeze has pushed lakhs of farmers into bankruptcy. This after encouraging, even pushing them towards high-cost cash crop cultivation with its attendant risks. In Kerala of 2003-04, raising an acre of vanilla cost 15 to 20 times what it took to raise an acre of paddy. But farmers were asked to rush in regardless. The price of vanilla has sunk and the credit flow has stopped. And several such growers have taken their own lives.

We fail to invoke even those measures the blatantly unfair WTO allows us; this means the prices our own farmers get for products like cotton collapses by the season. The huge subsidies attached to U.S. cotton — over a million bales dumped on this country in just 2001-02 — are not challenged. Duties are not raised. We’re glad to trade the interests of our poor for another 30,000 H1B visas.

The government tells us over 112,000 farmers have committed suicide since 1993. A gross underestimate but the figure is bad enough. These are suicides driven by debt. And the indebtedness of the peasantry, so the National Sample Survey tells us, has almost doubled in the past decade.

It is not as if there is no resistance, no voices raised. The people have spoken to their governments and all of us in election after election. In protest after protest. And good things, too, have happened. Like the NREGA. But the larger direction is overwhelming. And it is one that races towards catastrophe, disaster having already been achieved. We, however, are more interested in the cellphone number worth Rs.15 lakh. And maybe there’s a point in that. The ‘fancy’ number was purchased on borrowed money. Our orgy in inequality plays out on borrowed time.