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Editorial

For Whom the Bell Tolls?

The term 'industrialisation' has once again formed the staple of politicians, commentators and large newspaper groups. Why industrialisation? The common argument is that it is the key to development. Of course, the march of the development process in Europe was synonymous with industrialisation, which meant a dominant role of the manufacturing sector in the national economy in terms of output as well as employment, and correspondingly, a decline in the share of agriculture. In Britain the transformation of a predominantly agricultural economy into an industrial one took nearly a century, the period that is commonly called the period of the Industrial Revolution.

In the Indian economy of the present, the role of the service sector is large in terms of employment, while the performance of the manufacturing sector, particularly in the organised one, is not at all impressive. The decline in public sector employment has hardly been compensated for by the reform policies, which were supposed to create large doses of employment in the organised manufacturing sector run by the private entrepreneurs. As for industrialisation, what is more important is its likely impact on the capabilities of the people. One definite measure of capability is the physical quality of life index, a combination of adult literacy, expectation of life and infant mortality rate. All things considered, Kerala continues to occupy the top position in the country, while Gujarat, the showpiece of Modi's industrialisation drive remains a middle-ranking state, and this despite the fact that Gujarat received more than 22 thousand crores of rupees per year as industrial investment during the period 2011-2015. Which classes benefited and continue to benefit from this huge inflow of investment may be an open question, but the answer is not difficult to find. No one can seriously speak of industrialisation unless it genuinely centres around job creation. The failure to do so previously is precisely why the possibilities of industrialisation as touted by the persons in authority every now and then under grandiose media focused events, are simply discounted.

Right now, West Bengal Chief Minister is trying to tempt big capital, holding banquets for them at huge expenditure of public money. Accused by the Congress, the CPI(M) and the media for being anti-industrialisation and hence anti-development, she has tried to exonerate herself of this charge by organising a global business summit. She has claimed that proposals for new investment would amount to more than two and half trillions of rupees. The veracity of this claim has been questioned by many. This government too like its Marxist predecessor has shown itself to be a firm believer in corporate-led industrialisation and development.

The movement against forcible acquisition of agricultural land in Singur and Nandigram had the support of the people for definite reasons. The people of the two places now feel betrayed. Police officers reportedly responsible for gunning down agitators in Nandigram have not been punished yet, rather they have received promotion. When the CPI (M)-led government of West Bengal forcibly acquired land in Singur; it did not undertake any cost benefit analysis of the proposed automobile project on about 1000 acres of fertile agricultural land. The affected persons were not only unwilling landowners; there were large numbers of sharecroppers (registered and unregistered), and farm labourers, besides those engaged in cottage industries, animal rearing, vegetable vendors etc. The Tatas gave no promise of employment for those who would have to lose their occupations. The CPM Chief Minister did not find it even necessary to consult the nearby village panchayats, which were controlled by his party. In truth, "the land acquisition process could have been completed by adopting more democratic methods and there was perhaps no need to be so effusively generous while negotiating terms with the Tata Group". It may be mentioned that the Tatas were subsidised to the extent of more than Rs 8.5 billions for the proposed automobile project. In Nandigram, seven of the ten panchayats were then under the control of the CPI(M). They were not consulted before giving the notice for land acquisition. The relevant issue is not industrialisation per se, but the nature of the central actors driving it. The ruling elites irrespective of their colour have made it clear that in their vision of industrialisation and development, the corporates are the leading actors. The corporate houses, as everybody knows, want to maximise their profits, and one of their strategies is to reduce costs, particularly labour costs, in order to remain competitive in the global market. For about two decades, until the global meltdown, from whose impact India's industrial economy is yet to recover, India had a high growth of industrial output and income, which was accompanied by a dismally low growth of employment. Right now, with sluggish industrial growth, the role of cost reduction, implying curtailment of rights of workers, has been more prominent. That is why there is the clamour for more Special Economic Zones, alternatively called Special Exploitative Zones. It is now clear that the spectacular rise in the number of billionaires (in terms of US dollars) in India was due to these SEZS.

Of course, there is the well-worn cliché. There is no Alternative. If a country in which politicians constantly swear in the names of the people does not have any alternative except to satisfy the profit-hungry Indian and foreign big business magnates it indeed holds out much hope for the majority of the people, a considerable section of whom cannot afford even two square meals a day, let alone pay the fees of private practitioners of medicine. But the point is whether there is really an alternative concrete path of development that will increase the purchasing power of the broad masses of the people, not through doles, but through productive employment at decent wages. How this can be done has been suggested by an economist. "This can be done by extending the present National Rural Employment Guarantee Scheme to an ambitious, time-bound, employment guarantee programme". If such a programme is really undertaken and implemented in earnest, this will create many jobs for technicians and engineers, and much business for small and medium traders, small entrepreneurs etc. The demand generated out of such a programme is certain to be matched, after a time lag, by supply of goods and services, if the programme really turns out to be productive.

Considering the various fiscal instruments at the hands of the government, raising money for such a programme should not be a problem. Implementation of this alternative model of development is no utopia; it must be borne in mind.

Of course, the problem is that such a programme is not favoured by academics and politicians, who are champions of the 'trickle down' theory, suggesting that the benefits of corporate investment will automatically trickle down to the marginalised. This is somewhat akin to Macaulay's 'downward filtration' theory of education. Macaulay was a representative of British imperialists; these ideologues are parts of a new imperial-corporate scheme of things.

There is something deeply wrong with the present investment culture that is trapped in growth for growth's sake. What is needed is to prioritise what is best for most people, not a handful of billionaires.

Frontier
Vol. 48, No. 29, Jan 24 - 30, 2016