Indian Reforms: Myopia or Nightmare !

With the accession of Rajiv Gandhi to power, a vision began to germinate. That vision was that of an India that would be vibrant with the entrepreneurial energy of the few, and the rest of the population serving those few with their labour.

The argument was that despite more than 40 years of independence, with slogans of a ‘socialistic pattern of society,’ Indians remained desperately poor. Most of them also remained actually illiterate or barely literate. The free market advocates backing Rajiv Gandhi thought that the energy of the business community could both enrich the rich and, through trickle-down effects, better the condition of ordinary people. The Central budget of 2010-11 is a further step towards the implementation of that vision.

Look at the successes of the budget: the professional middle class is happy with the cuts in taxes collected from it. The business community, including foreign investors, is happy, because of further privatisation of public assets by which the Finance Minister proposes to raise Rs. 25,000 crore, because of the................

looming privatisation of many operations of the Indian Railways, whose kitty is nowhere near what it should be for even partial implementation of the projects announced by the Railway Minister, because the FDI path would be further smoothed and because licences would be issued for fresh private banks. Never mind if they fail as the Global Trust Bank did, the government will pick up the bill directly or indirectly, in accordance with its earlier record and the recent practice in the United States and Britain where banks failed but bankers remained prosperous. The Indian stock market responded positively, thus sending a message of welcome to the budget and generating profits for the bulls.

The Finance Ministers of the neoliberal Central government had earlier instituted the Fiscal Responsibility and Responsibility Management Act. This became their excuse to drastically cut down public investment and expenditure on the social sector. As soon as the global financial crisis hit India and the interests of the Indian rich demanded fiscal stimulus, the government overthrew fiscal orthodoxy and budget deficits soared. North Block policymakers can claim that the stimulus worked and the growth rates did not crash. The problem is with the content of that growth.

The Indian Constitution is only quasi-federal. Using and abusing the power of centralisation vested in it, the neoliberal policymakers have concentrated more and more financial powers in their hands, leaving the State governments with scantier resources to carry out their constitutional responsibilities of providing health care, education and rural livelihoods. The Central government has introduced an enormous number of Centrally-Sponsored Schemes and encroached on the States’ jurisdiction. The Centre has handed over much of the financing to aid agencies of the U.S. and European Union governments, which have imposed fresh conditionalities on the States. The irony is that the more backward the regions are, the less able they are in fulfilling the conditions. Hence, the greater the deprivation of those areas.

The centralising tendency has been rampant in the field of education: the government has established Central universities not just in backward or remote areas but in States with well-established universities, which continue to suffer stagnation because of lack of resources as well as political manipulation. Instead of learning the proper lessons from the often tardy responses of the over-centralised AICTE, NCERT or UGC, namely, that they need more and more assured supply of public money and must devolve some of their powers to regional bodies, the Ministry of Human Resource Development has decided, with the proposed National Commission on Higher Education and Research (NCHER) Bill to concentrate all powers in its single wise head. Not all wisdom resides in persons who tread the corridors of power in Delhi.

Moreover, the policymakers have proclaimed that they want the institutions to be of international standard, and that the scholars employed there will be judged according to international (read U.S. establishment) accreditation criteria. The idea that there is a single, uncontested international standard in economics, history, political science or sociology is laughable. In areas of technological education too, local adaptation is critical and ‘international’ standards will not provide the knowledge of the local cost-benefit conditions in the diversity that is India. How would ‘international’ standards be applied to scholars of Tamil or Bengali or Marathi literature, culture and history who do not write in English?

The acceptance of the NCHER Bill will have many unacceptable consequences. First, under an NCHER endowed with powers far exceeding its optimum span of control, decisions will be even slower in critical areas of education than they are now. Second, with a niggardly Central government, tuition fees will rise far beyond the paying capacity of poor students and, therefore, will exclude much larger numbers of meritorious but poor students from higher education. Third, the step will lead to further dilution of the quality of teaching in State universities, the further proliferation of private colleges doling out poor-quality education.

The Union Cabinet recently approved an agreement with the U.S. on ‘Agricultural co-operation and food security.’ Under an India-U.S. Agricultural Knowledge Initiative, multinational agribusiness firms such as Cargill and Monsanto can become members of the policymaking body. This is ironical since most of U.S. agribusinesses are conducted under the umbrella of huge government subsidies, while the current budget has cut the measly subsidies poor farmers enjoy in India. Indian agriculture has grown slowly in recent years, and food grain production has lagged behind population growth.

Ordinary Indians are badly malnourished and calorie intake has fallen over time. An Expert Group appointed by the Planning Commission has proposed 1800 calories per day as the norm of consumption by an adult for fixing the poverty line. This norm is applicable only for light or sedentary work. How is a construction worker with heavy head loads or an agricultural worker driving buffaloes in a flooded paddy land going to do his work and lead a healthy life or survive long? Even this norm yields an estimate of poverty of about 42 per cent in 2004-05, much higher than the estimates quoted officially. If the Food Security Bill is passed by Parliament, it will presumably be implemented by accepting the older estimate or the new estimate of the Expert Group. Either way, a vast number of people who are malnourished will remain in that state.

Under the Common Minimum Programme, the first UPA government adopted the National Rural Employment Guarantee Scheme. Even its partial implementation has helped the desperately poor and yielded rich dividends for the ruling parties under whose auspices there has been a better record of implementation. But this can be regarded only as a halting step towards a universal public distribution system, which is the proper way to address the issues. The budget is still focussed on the interests of the middle and richer classes and on tie-ups with the U.S. as the exemplar and leader of the system that the advisors want. The Right to Education Act, for example, excludes the education of children below the age of six, and the ICDS programme that is supposed to look after them is still poorly funded and poorly governed. The allocation in the current budget for mid-day meals for school children is far short of what would be needed to universalise them.

Finally, the whole saga of the nuclear agreement with the U.S., currently developing into a bill that caps the liability of suppliers and operators at Rs. 500 crore whereas a Chernobyl-like development could impose unimaginable costs on the current and future costs often appears like a black comedy in the making. We should remember that crime rates in U.S. cities still remain high, and there is a continual war going on on U.S. borders against ‘illegal’ immigrants from Latin America. Do the policymakers at the Centre want a permanent state of civil war with the disaffected inside to be added to the worries on subversion across India’s borders?

Source:The Hindu