EDITORIAL

Billionaires Galore: Growth Or Plunder?

THE “Shining India” has reasons to cheer.  23 Indians figure in the Forbes’ global list of 793 billionaires this year!  An Indian business daily survey, categorising billionaires in Indian rupees, unlike the Forbes’ which categorises them in US dollars, has shown that the number increased from 71 to 311 billionaires during the  course of the last year.   They have a net worth of Rs 364,000 crores.  At an 8 per cent rate of interest, they would be earning Rs 29,000 crore per annum, or, Rs 80 crore a day!  Our concern is not that few people have made it to such a list. In fact, may their tribe increase. Our concern is regarding how this has happened.

The Economic Times, reporting this news with a billion cheers states “immiserising growth is plunder but what goes on now is participatory growth that embraces everyone”. (March 13, 2006) Really?  Let us examine this contention.

Distress suicides and starvation deaths continue to stalk our rural areas. As the news of India’s billionaires broke out, so did the news of a farmer’s family committing suicide in Andhra Pradesh because the whole cotton crop that they produced was not sufficient in value terms to pay back the usurious moneylender.  While this news figured in the local Telugu press, The Economic Times did not even bother to report.

Between 1993-94 and 2003-04, the per capita expenditure of the bottom 80 per cent of India’s rural population declined in real terms, according to the National Sample Survey (NSS).  On the other hand, the average per capita income in the country grew around 4 per cent annually. Per capita expenditures declining for 80 per cent of the rural people with an average increase of 4 per cent for the country as a whole only means that income inequalities have drastically widened. As opposed to the “Shining India”, the living conditions in “Real India” which embraces the overwhelming majority of our population, appear to have drastically deteriorated.  The per capita availability (not consumption) of foodgrains in the country has come down to around 152 kilograms per head.   This is a figure which is close to what it used to be during the days of the Bengal famine in 1940s, close to the end of the Second World War.  Given this huge income inequalities, the per capita availability figures mask the reality that the poor are consuming much less today than what they were, even a decade earlier.

This reality must be seen in conjunction with the miserable growth of unemployment in the country.  This year’s Economic Survey shows that between 1993-94 and 2004, the unemployment rate for males in rural India increased from 5.6 per cent to 9 per cent and 6.7 per cent to 8.1 per cent in urban India. The unemployment figures, on the basis of current daily status of employment, were much higher than these figures implying a high degree of uncertainty of employment.  Thus, with per capita expenditures declining, implying declines in per capita consumption, and accompanied by growing unemployment, is, surely, an expression of immiserisation of the vast majority of the Indian people.  Thus, what is happening in the country is alarming to say the least.  The Economic Times may well cheer the billionaires but what it says is absolutely true.  “Immiserising  growth is plunder”.  The contention that these billionaires had been thrown up by a process of  “participatory growth that embraces everyone” is an illusion that is assiduously created by the champions of “Shining India” at the expense of the “Real India”.

That this is true is established by another consideration.  During the last four years, there has been a substantial increase in the gross tax revenues of the government. How has this happened?  Consider this year’s budget for the explanation. It is expected that the gross tax revenues would grow by over Rs 72,000 crore, i.e., a 19.5 per cent increase over a 21.4 per cent increase last year.  Additional resource mobilisation through taxes is targeted at only Rs 6,000 crore.  Tax arrear  collections are pegged at only Rs 10,000 crore.  Over Rs 56,000 crore is, thus, to come to the government without any effort at additional  tax mobilisation. It would be naïve to think that this is happening due to better tax collection administration. But, then why is this happening? 

Such whopping increases in tax revenues is happening precisely because of the sharp growing of inequalities that we have discussed above.  Thus, because inequalities have increased, the pre tax surpluses for the “Shining India” have risen sharply, and thus, more tax revenues are literally falling into the lap of the government.  This, however, is happening at the expense of the vast majority of the people in “Real India”. Thus, what is going on in India is an intense process of immiserisation  of the vast majority of our people.  What we are witnessing today is growth at the expense of equity.  This is no growth that will eventually lead to equality.  This growth of billionaires is not due to what The Economic Times editorial states, “The very process that makes billionaires out of the more enterprising also throws open windows that bring new light and cheer into lives at the other end of the social ladder”.

What is happening is the exact opposite.  The throwing up of the billionaires is the result of enlarging the size and deepening the misery of the “other end of the social ladder”.

It is precisely this disconnect between the “Shining India” and the “Real India” that led, in the first place, to the rejection of the BJP-led NDA in 2004 general elections. It is precisely this disconnect that has roused the hopes in the people  that the incumbent UPA government will take steps to ameliorate the situation of “Real India”.  The people are hoping to get relief urgently. If the UPA government ignores this hope, then it shall do so at its own peril.