Finding the resources
By Gail Omvedt
Indian political leaders, who are quite often aware of the dire state of their economy, have to find the courage... to go forward on the basis of transparency and frankness.
ONE OF the school memories of my daughter, who had grown up in India and had returned in 1995 to join a public high school in the U.S., comes from a free trip to Washington provided for "New Americans". As part of this, they were met by two Senators. What my daughter remembered was not simply the friendly human behaviour of both, chumming with the students (in fact, the "required behaviour" of politicians in the U.S. is the opposite of that in feet-falling India). It was that the Republican Senator, one of Newton Gingrich's recently elected gang of fervent ideological budget-balancers, actually told a group of students that "we have to cut spending on education"!
I give this as an example not because India needs to cut spending on education — far from it, it needs to be increased. Rather, it is that Indian political leaders, who are quite often aware of the dire state of their economy, have to find the courage not to consult only with industrialists and economists and then either attempt to carry out reforms surreptitiously or proclaim "hard" decisions which they cannot carry out, but to take the people into their confidence, tell people the need for those they see necessary and the consequences if they are not taken and go forward on the basis of transparency and frankness.
Today, almost all economists and the more intelligent leaders have a fairly clear idea of what needs to be done: (1) Spending on salaries of Government employees should be cut or at least not increased (if "cutting salaries" sounds too radical, it should be recalled that in 1883 Jyotiba Phule had made a recommendation in even stronger language that the British Government should, without reducing the "meagre salary" of the lowest Government employees, "slowly reduce the extremely excessive pay and pensions of all the remaining great black and white employees in all the departments"); (2) The Government should not be running enterprises such as hotels, airlines, bakeries, BALCO, etc.; (3) What it should be doing is spending on social justice programmes and on providing roads, electricity, water, education and health, that is the material and human "infrastructure" needed to make a healthy economy. But who is ready to say this in India in a way that would be heard and listened to by the masses of people. The current Government seems more interested in pleasing industrialists and sounding reform- oriented than running a viable economy. On the other hand, most of the social-political activists capturing headlines and talking "swadeshi" would be at a loss if they were put in a position where they had to actually manage the resources of a business or a State. They are using opposition to "globalisation, liberalisation and privatisation" as slogans — even when leaders of their own parties implement such measures when in power, these realities are never taught to the cadre and the leaders continue with the slogans. Jyoti Basu's party being a notable case in point, at least as far as West Bengal is concerned. On the other hand, those economists who do know something are apparently happy enough to give TV interviews, write learned columns in newspapers, and discuss policies at seminars, but do not seem to have found any way to make a widespread popular impact. The only economist in politics, Manmohan Singh, has not been able to win an election on his own and so has to subordinate himself to wavering and rhetorically-oriented party policies. The raw atmosphere of political life seems to leave most of the rest shuddering, a major example being India's Nobel laureate, Amartya Sen. Dr. Sen has long expressed his support for policies of globalisation and economic reforms accompanied by policies that will develop education, health, land reform and similar policies that can develop human capacities — but while his Leftist comrades like to hear him talk about fundamentalism and history, they are unwilling to listen to his economics. Dr. Sen also does not seem to challenge this; when asked what he would do if he were India's Finance Minister, he said: "resign". Not very helpful to those who might like to see his policies in practice! As for the politicians, unfortunately India has no political leaders who have found the way to be blunt, tough and still win.
In spite of sloganeering swadeshi-ites, ignorant intellectuals, evasive economists and pusillanimous politicians, however, the current economic crisis in almost all the States and at the Centre makes some action necessary.
Take, for example, the Bhopal Declaration calling for land to every Dalit family, provision of quality education, awarding contracts to Dalits, "reservation in the military and the Judiciary", programmes of "affirmative action" in the private and corporate sector. The goal as proclaimed by the conference and accepted by the Chief Minister, Digvijay Singh, was to move beyond "reservation" in the public sector, recognising that these had brought Dalits to a certain point but had little scope for the future, and create Dalits as independent smallholding peasants, small and large business entrepreneurs, media stars, journalists and editors, and "millionaires and billionaires". Inspiration was taken from achievements won in the U.S. by affirmative action programmes. While some may grouse at using the "American model" to guide Indian action, the real difficulty lay elsewhere: where to find the resources for such programmes — in Madhya Pradesh or in India as a whole?
In Maharashtra, whose finances seem to be in even worse shape than those of Madhya Pradesh, recent months have seen demonstrations by dam evictees leading to the Government's promise to provide a form of rehabilitation including not only land in the command area, but a "water allowance" of Rs. 600 a month per family until irrigation water is available, and priority given to constructing the canal distribution systems which would make irrigation water available. There have also been agitations of farmers opposing rises in electricity rates, and, the most potentially financially burdensome of all, the cotton farmers have mounted strong movements to insist that the Cotton Monopoly Purchasing Scheme pay them the promised price for their cotton. In the latter case, the leaders of the farmers know as well as the economists that the CMPS has now become a white elephant that the state cannot afford and which, in the end, hurts the interests of the farmers. Their reasoning is simple: you put us in this position, you prevented us from selling cotton outside when prices were higher elsewhere, now you carry out your responsibilities.
Where will the State Governments find the resources to meet the needs of Dalits, farmers, dam evictees and other specially oppressed sections as well as step up spending on education, roads and electricity?
There must be evidence clear to the people that economic reforms are starting at the top... that those running the show have a commitment to the nation and the collective welfare and not just the future of their families.
IN THEIR efforts to find the resources for necessary governmental spending, political leaders and bureaucrats alike are ready to blame the poor — not only the farmers who seem to keep demanding subsidies, but also workers concerned about their jobs and the hard-pressed middle classes worried about making ends meet.
The basic problem, though, is a lack of trust. Take the farmers as an example: in spite of talk of subsidies, they are arguably one of the poorest sections of society. Looked at overall, according to calculations of "Aggregate Measure of Support" used by the WTO and now by the Indian Government, the farmers are not subsidised: low prices for their products when weighed against all the open subsidies, result in "negative subsidies" or "taxation". The AMS, according to analyses of economists such as Ashok Gulati, has in fact been rising, not falling, through much of the 1990s. From the farmers' perspective, cheap electricity is a compensation for not getting good prices. They are not unreasonable about the issue. Many have said they would be ready to pay for electricity if they could get good electricity. Indeed, as a study by the Swedish sociologist, Staffan Lindberg, has shown for Tamil Nadu, the policy of cheap or "free electricity" came from the politicians rather than the farmers' movement and has proved as ruinous to the farmers as to the state budget. However, at this point, when farmers are facing a crisis and see input prices rising everywhere while crop prices remain low, a rise in electricity prices is just another blow — they see no reason at all to trust the political leaders who tell them it will be best in the long run, that all will gain from a healthy economy set on the right path.
Indeed, why should any section of the people trust the politicians who seem to be asking them to sacrifice some of their livelihood, when there is no evidence whatsoever that the politicians themselves, or top bureaucrats, or the economists employed in governmental institutions are ready to sacrifice anything at all? When the September 11 attacks came and a worldwide atmosphere of war against terrorism began to be created, there was talk that in a "war atmosphere" reforms could be pushed through, that the people would be ready to make sacrifices for the national good. Such talk vanished as it became clear that the Government was concentrating not on reforms but on the coming elections and spending for the military presence at the border.
The political culture in India is one where the political leaders, bureaucrats, and industrialists enjoy the fruits of their office and position, while talking of economic necessities that apparently require all the sacrifices from the poor or middle classes. And this will not do. Much of the current fight has to do with burgeoning administrative costs and brings political representatives into conflict with Government employees. In fact, the gap between organised sector salaries and unorganised sector earnings is far higher in India than in developed countries, higher than in the socialist developing countries such as China. Perks for both Government employees and political representatives are immense and have skyrocketed. Expenditure on simply maintaining the administration (that is, paying such salaries and perks) in most States now practically dominates any budgeting and leaves no resources for development. While governmental leaders are all attempting to find surreptitious and partial ways to cut into this (e.g. not filling in posts of retiring employees), such measures are clearly not enough. It is not surprising then that there are efforts to call a stop to the growing trend, if not to reverse it. We are now beginning to see expensive and bitter stand-offs, strikes of Government employees carried out and met with police- backed adamance. The Government is beginning to say a firm ``no,'' though at great cost, and in often wrong ways. It is not a very democratic or transparent way of dealing with the situation. Employees, particularly the third and fourth class staff who make up the "shock troops" of the confrontationist unions, don't trust the Government they work for, don't trust the politicians. What is needed is a true collective effort. One suggestion might come from a kind of political custom in Maharashtra: when a locally powerful political leader stands as a candidate, all the employees of the sugar factory, or the educational association he runs, voluntarily and graciously contribute one month's salary to meet the campaign expenses. After all, their job derives from his (or her) success, their future depends on the future of the institution which the leader protects and develops.
However cynically one might view such contributions, why not carry forward the idea to the level of genuine public, collective action? Let all Government employees (including those of academic institutions) at the level of the Central Government, the State, corporations — whichever governmental level is trying to generate the funds for development, and all the corresponding political representatives, MLAs, MPs, corporators, Ministers, whatever — let all of these voluntarily and graciously agree to give up 8 1/3 per cent of their salary and perks a year for five years to go into a Development Fund. The Development Fund would be activated at appropriate political levels (municipal, district, state, etc). It would be used for infrastructure projects only, roads, electricity, irrigation, health, education, etc. and for the social justice programmes necessary to redress the inherited privileges that upper castes enjoy.
This could be looked on as a kind of reverse Diwali bonus: spending not on oneself for immediate consumption but as an investment for their future, the country's future, and the welfare of its poorest sections. Of course, to be acceptable at all to the organised sector this would again require trust in the top political leadership and some faith that the money would be genuinely spent for development. Administration of such development funds could be guided by a council including not only economists and experts in the fields of health, irrigation technologies etc. but also representatives of farmers, Dalits, women and other specially oppressed sections of society. There must be evidence clear to the people that economic reforms are starting at the top. Too many privileges exist at too wide a level. In the U.S., for example, only the President has a state-provided vehicle, though others may get car allowances at points. Only the President and the Governors of the various States have state-provided housing: the White House is all there is in Washington D.C. There is no reason to follow an "American model" here, but some equivalent sacrifice should be made by India's elite. The key theme should be: start at the top, give some visible and real evidence that those running the show have a commitment to the nation and the collective welfare and not just the future of their families.