People's Democracy
(Weekly Organ of the Communist Party of India (Marxist)
No. 01
January 06, 2013
|
Vol. XXXVII
No. 01 January 06, 2013 |
MANIK SARKAR AT NATIONAL
DEVELOPMENT COUNCIL Economic
Regime must Change for Implementation of Planning Below we reproduce the
slightly edited text of the speech delivered by
Manik Sarkar, the chief
minister of Tripura, at the meeting of the
National Development Council (NDC)
on December 27, 2012 regarding the twelfth
five-year plan. Subheadings have
been added. DISTINGUISHED members of the
National Development Council, ladies and gentlemen, I am glad to have been given this
opportunity to present my views before
this august body, which is meeting today to discuss
the draft of the twelfth
five year plan 2012-17, prepared by the Planning
Commission. POVERTY: SERIOUS MISCONCEPTION Planning in This presumption, however, is
completely wrong, and any meaningful planning
can begin only when we reckon with this basic fact.
From 1973-74 when poverty
estimates began, poverty in India has always been
defined with respect to a
calorie norm, i.e., 2100 calories per person per day
in urban India and 2400
(later changed to 2200) calories per person per day
in rural India. Persons
unable to access these norms are defined as “poor.”
By this criterion, the
proportion of the “poor” in the country has been
rising steadily: the proportion
of population below 2100 calories per person per day
in urban This is also borne out by data on
per capita foodgrain absorption in the
country, which is the principal determinant of
calorie intake. Taking per
capita daily net availability of food grains,
we find that the average
figures for the periods 1998-2000 and 2008-10 were
455.7 and 439.5 grams
respectively, showing an unmistakable decline during
the high growth years. Faced with this fact, the
Planning Commission has argued that the decline
in foodgrain intake, and the associated decline in
calorie intake, is because
of a change in taste among the people, i.e. they no
longer wish to consume as
much foodgrains as they used to, but wish instead to
diversify their
consumption towards other goods, which is a symptom
of their becoming better
off, and hence, more sophisticated, in their
consumption pattern. But all over
the world, a rise in per capita real incomes is invariably
associated
with an increase in per capita foodgrain intake,
taking both direct and
indirect intake into account, the latter through
processed foods and animal
products into whose output foodgrains enter as
feed-grains. There is no reason
to believe that the Indian people are any different
from the rest of humanity
in this respect. Hence, if we find per capita
foodgrain intake declining in STRIKING INCREASE IN INCOME INEQUALITY The question to ask therefore is:
Why has there been an increase in
hunger and deprivation among the people of this
country precisely during a
period when the GDP growth rate appears to have been
so impressive? To say that
there has been an increase in income inequality
during this period is to state
the obvious. The real question is: Why has there
been such a striking increase
in income inequality? One obvious reason has been
the pattern of growth,
the fact that the acceleration in growth has been
largely confined to the
service sector, while agriculture, where more than
half the workforce of the
country is still employed, has witnessed virtual
secular stagnation. For
instance, if we take the annual average figures for
the periods 1998-2000 and
2008-10, then we find that per capita foodgrain
production in the country has
declined from 189 kilograms per annum to 185
kilograms The problem, however, is not just
a sectoral one, of one
particular sector lagging behind the others.
The problem is social:
of a growth strategy favouring the big corporates,
both domestic and foreign,
and the large financial interests, at the
expense of the small producers and
the peasantry. The stagnation of agriculture
as a sector is a
reflection of the squeeze on the peasantry as a social
class, which is
why it would be wrong to say that the country is
facing an agricultural
crisis; it is facing an agrarian crisis.
Its essence lies in the
fact that the period of “liberalisation” has
witnessed a withdrawal of support
by the State to the peasants, through reductions in
input subsidies, a rolling
back of public extension services, a winding up of
the system of subsidised
institutional credit, a curtailment of rural
development expenditure, and a
general miserliness in offering remunerative
procurement prices. The latest
example of this orientation of State policy, in
favour of large corporates and
financiers and against the petty owners, is the
opening up of multi-brand
retail to foreign direct investment, i.e. to
companies like Wal-Mart, which
threatens the livelihood of millions of petty
traders. The claim that it would
benefit the peasantry is belied by the experience of
countries like While the per capita foodgrain
production in the country has been
stagnant, the manner of management of the food
economy has resulted in further
decline in per capita foodgrain absorption in the
country. The government has
held massive and growing foodgrain stocks even in
the face of increasing hunger
among the people; and these stocks have been
exported abroad from time to time.
The obvious question that arises is: why does the
government not distribute
these stocks through the public distribution
system? The PDS has been
severely curtailed through the introduction of
“targeting;” and enlarging
distribution through the public distribution system
(PDS) by removing such
“targeting” would reduce both the magnitude of
government stocks and also the
intensity of hunger. The reason why the government
does not do so is that this
would raise the fiscal deficit by increasing the
amount of food subsidy, which
would supposedly aggravate inflation. In fact, if
the fiscal deficit is to be
curtailed then the way to do so should be through
taxing the rich who have been
the beneficiaries of substantial tax concessions in
recent budgets and not be
reducing food subsidies for the poor. Since the strategy of growth,
including what is envisaged for the Twelfth
Plan, consists in boosting the “confidence” of the
financial interests in the
economy, or giving a fillip to “market sentiments”
in the economy, all of which
are a euphemism for appeasing big corporate and
financial interests, such
growth will never alleviate poverty. On the
contrary, it would aggravate poverty
by transferring control over assets, including land
and common property
resources, from peasants, petty producers, marginal
producers and the people at
large, to the big corporates and financiers. As the
dispossessed peasants and
petty producers flock to the cities to join the
ranks of the unemployed, the
underemployed and those unemployed in disguise,
usually under the guise of
“informal sector workers,” not only do their own
incomes, the incomes of
labourers dependent on agriculture for their
employment and livelihood, and the
incomes of the “informal sector workers” themselves,
come down; but so do the
incomes of the organized sector workers whose
bargaining strength is undermined
by this growing army of unemployed, underemployed
and disguisedly unemployed.
The entire class of labouring population, therefore,
gets squeezed by this
strategy which seeks to usher in growth by appeasing
the big corporate and
financial interests. The twelfth plan seeks to carry
forward this strategy that
has already brought distress to the country’s
labouring population. THE BASIC FEATURE OF CURRENT GROWTH PROCESS The basic feature of this growth
process is not only that it is squeezing
peasants, petty producers, and marginal producers,
but also that it is
generating hardly any jobs at all. The latest
National Sample Survey data in
this regard are revealing. Compared to an annual
rate of growth of “usual
status” total employment (in the 15+ age group) of
2.66 per cent between
1999-2000 and 2004-05, the rate of growth between
2004-05 and 2009-10 was a
mere 0.83 per cent, notwithstanding the very high
rates of GDP growth in this
latter period. The twelfth plan document talks of a
decline in the unemployment
rate during the eleventh plan period; the reason for
this decline, despite such
paltry increases in employment, lies in a sharp
decline in the work
participation rates. More persons in the 15+
age-group, it is claimed, are now
engaged in pursuing education than ever before,
which is why, despite a lack of
increase in employment, the unemployment rate has
come down. Even if this is
true, it only underscores the fact that a serious
crisis is in the offing: when
those being currently educated come on to the
workforce, and that too with
higher job expectations, such paltry rates of growth
in employment would mean
an absence of sufficient jobs for them, which would
have seriously adverse
social consequences. This virtual stagnation in
employment growth, it should be
noted, happened before the slowdown in GDP growth
rate. The blame for it,
therefore, cannot be laid at the door of output
stagnation; it is an
essential characteristic of the growth process
itself. The inequalities
associated with this growth process increasingly
concentrate purchasing power
in the hands of the rich, and hence give rise to a
growing demand for a whole
range of such goods, as are typically demanded in
the advanced capitalist
countries; the employment intensity of such goods is
extremely small. In short,
the growth strategy currently being pursued in the
country entails not only
accentuated poverty but also stagnant employment
opportunities. Another measure that the
government is currently in the process introducing,
namely, direct cash transfer (DCT) in lieu of
subsidies, which conforms to
World Bank prescription, is only going to add to the
miseries of government has
on occasions assured that cash payments would be
indexed to prices, the poor
people. There are two obvious problems with it.
First, even though the there
will necessarily be lags in revising the magnitude
of payments. Because of this,
even under the best of circumstances, i.e. even
assuming that such indexation
occurs scrupulously, the beneficiaries will
necessarily obtain on average reduced
real subsidies because of the lags; and the longer
the lags, the greater will
be the reduction. This will be particularly
detrimental to the people in the
case of food subsidies; and even though food has
been kept out of the purview
of the scheme at present, the government has made no
secret of its intention to
substitute cash payments for food subsidies
eventually. Second, since the cash
will be made payable to the head of the household,
usually a patriarch, there
will be little control over its actual mode of use;
in particular women and
children will suffer because of it. In short, cash
payments will not only
curtail effective subsidies, to the detriment of the
poor, but will strengthen
patriarchy with obvious all-round adverse
consequences. MEANINGFUL PLANNING REMAINS AN ILLUSION The plan strategy which is
dominated by the desire to appease the big
corporate and financial interests, should change
focus towards ameliorating
immediately the conditions of the mass of the people
(instead of waiting for
GDP growth to impact favourably on their lives,
which is likely to be a wait ad
infinitum). The economic regime too must
change within which the plan is
implemented. This latter change must take the form
of controlling the current
deficit, and in general managing the balance of
payments, through appropriate
controls on cross-border capital flows and, hence
also on the burgeoning
imports. It obviously stands to reason that planning
can be meaningful only if
there is a “control area” over which the writ of the
State can run without
being overruled by the caprices of globally mobile
finance capital; unless such
a “control area” is created through appropriate
restrictions on trade and
capital flows, meaningful planning remains an
illusion. Now that even the IMF
has conceded the need for controls on cross-border
capital flows, the Indian
government’s adherence to liberal capital flows in
the midst of a crisis would
be not only misplaced but also ironical. When the State acquires such a
“control area,” the specific strategy of
development that should be put in place must aim to
provide a range of
universal rights to the people: to food, to
employment, to health care, to old
age pension; and also to institutionalize free and
compulsory primary
education. These are all interrelated: for instance,
assured access to
employment (which provides purchasing power) and to
food (which makes supplies
accessible at low prices) constitutes a condition
for parents from labouring
families to send their children to school, rather
than prematurely pushing them
into the workforce out of sheer necessity. Not only
does the twelfth plan not
take such a holistic view, but even its efforts in
each of these directions are
woefully inadequate Despite the Right to Education
(RTE) Act, for instance, we are still far
from achieving free and compulsory education. While
enrolment at the elementary
level might have increased, extremely high dropout
rates persist. The eleventh
plan’s target of reducing the dropout rate at the
elementary level from 50 per
cent to 20 per cent remains unfulfilled. In fact,
the dropout rate, as the twelfth
plan document itself admits, remains as high as
42.39 per cent today. And there
is hardly any new strategy in the twelfth plan to
reduce it. The twelfth plan’s
provision of gross budgetary support of Rs 1.92 lakh
crores over 2012-17 for
SSA appears grossly inadequate. Further, taking the
education sector as a
whole, even if the twelfth plan expenditure targets
are all met, we would still
be far from the Kothari commission’s recommendation
of six per cent of GDP
being allocated for it. Likewise, in health the public
expenditure target set by the High-Level
Expert Group on Universal Health Coverage for the
Twelfth Plan is not being met
by the plan draft. Moreover, the draft still talks
of a universal tax-financed
healthcare plan of the sort that exists in countries
like the IMPERATIVES FOR ENSURING UNIVERSAL RIGHT TO FOOD When it comes to the issue of
right to food, a universal PDS that provides
35 kilograms of foodgrains per month to every
household at a fixed price, of Rs
two per kilogram, is not even visualised in the
draft food security legislation
that still talks of targeting, let alone in the
draft plan document. In a
situation where 90 per cent of the rural population
is at less than 2400
calories per person per day and 74 per cent of the
urban population is at less
than 2100 calories per person per day, targeting
makes little sense anyway. But
in view of the twelfth plan’s general emphasis on
the targeting of subsidies,
it is clear that we are still far from the
institutionalisation of a universal
right to food. The initial expansion of the
domestic market that is made possible
through the institutionalisation of such rights must
be followed up by an
increase in agricultural output brought about
through a combination of changes
in agrarian relations, in particular radical land
reforms, and the provision of
incentives to peasant agriculture. This would
further expand the domestic
market and set up a dynamic virtuous circle of
genuinely inclusive growth with
substantial employment expansion. The twelfth plan
document, however, shows no
awareness of this possible trajectory. It mentions
land reforms in passing; but
the only institutional change it advocates is the
legalisation of tenancy. States
which have carried out radical land reforms have
often banned tenancy because
of the fear that permitting tenancy would be a way
of recreating landlordism
through reverse tenancy. While this is an issue that
falls within the
jurisdiction of state governments, if an overall
suggestion is to be made in
the plan at all, then it is better if that
suggestion is confined for the
present to allowing tenancy for purposes of “group
farming,” which is also an
institution emphasised by the plan. While the technical issues
relating to agriculture, emphasised by the plan
document, are important and must be addressed for
achieving higher agricultural
growth, the role of remunerative prices is often
understated. The recent
increase in foodgrain production, after a period of
absolute decline in per
capita output, owes much to the provision of
remunerative prices to the
peasants. The provision of remunerative prices
becomes particularly important
in the context of a possible tightening of the rural
labour market because of
MGNREGA, and the increases in input costs that have
occurred and are likely to
occur because of the curtailment of subsidies. The
government may be tempted to
keep the food subsidy as well as the food price
down, by letting the peasants
bear the brunt of the cost increase. But that would
be wrong. The burden of
curtailing the fiscal deficit must not be allowed to
fall either on the poor
consumers (through reduced food subsidy) or on the
peasant producers (through
procurement prices that are not remunerative in the
context of rising costs).
The entire twelfth plan emphasis on raising the
agricultural growth rate to four
per cent will be undermined if the government, in
its bid to appease financial
and corporate interests, tries to reduce the fiscal
deficit without taxing the
rich, by making the peasants and urban workers pay
for it. ON INSTITUTIONS OF LOCAL SELF-GOVERNMENT The plan has provided larger
funds for capacity building at the level of
the local self-government institutions (LSGIs). This
is welcome, but it must
not become a means for the central government
establishing direct relations
with the LSGIs by sidelining the state governments.
While the 73rd and 74th amendments
clearly stipulate that the powers of the LSGIs with
regard to planning derive
through devolution from the state government, with
the union government having
no say in the matter, there has been a tendency, of
late, for the centre to
bypass the state governments altogether, to
intervene directly in LSGI plans.
This tendency must be resisted. Likewise, the plan
document’s suggestion that
LSGIs should induct external experts and experts
from the private sector for
formulating better projects, must not create a
situation where persons linked
to the big corporate and financial interests begin
to intervene directly at the
LSGI level. Such apprehensions get
strengthened by the draft plan’s suggestion that
LSGIs should go in for market borrowings to
supplement their financial resources
for undertaking projects. This is a potentially
dangerous suggestion. Since the
more “marketable” projects are likely to be the ones
relating to real estate
business and other such ventures, allowing LSGIs to
go in for market borrowings
will distort their priorities, away from social
sector projects towards such
commercial enterprises, defeating in the process the
original objective of
decentralisation. And even when market borrowings
are used for social sector
projects, they would necessitate the levying of user
charges to make them
profitable, which again would make the LSGIs not an
instrument of people’s
power, but a mere lower-level profit-making entity. ON BACKWARDNESS OF NORTH EASTERN REGION The draft 12th five year plan
fails to adequately address the issue of
uneven development in the country. In fact, balanced
regional development
should be one of the basic underlying principles for
the plan. In the past,
some parts of the country have progressed at a very
high pace while other parts
of the country are extremely underdeveloped. For
instance, the north eastern
region is admittedly among the most underdeveloped
regions of the country. The region
has suffered from geographical isolation and poor
infrastructure for very long,
resulting in slower economic growth and higher
incidence of poverty and
unemployment, which has been one of the major
contributory factors for
insurgency in the region, which, in turn, acted as a
major constraint in the
development process. The government investment in
the region has been less than
that in other parts of the country and the private
investment has been
negligible. The plan should, therefore, lay special
emphasis on development of the
north eastern region and other less developed parts
of the country. Development of infrastructure in
the north eastern region needs to be accorded
the highest priority, in order to improve
connectivity within the north eastern
region, with the rest of the country as also with
the neighbouring countries.
In this context, I would like to mention that the
process of development of
infrastructure in Tripura has been painfully slow
and needs very urgent
attention. NH-44, which links Tripura to other parts
of the country and is the
lifeline of the state, still continues to remain a
single-lane highway despite
the specific commitment from the Hon’ble Prime
Minister himself in the year
2005 that the highway will be converted into a
four-lane highway. The Ministry
of Road Transport and Highways later decided that
the NH-44 will initially be
converted into a two-lane highway, but even that
work has not been taken up
with proper momentum. There is also an urgent need
for expeditious completion
of the work of broad-gauging of the railway line
connecting Agartala (Tripura)
and further extension of railway line up to Sabroom
(Tripura). The air
connectivity also needs to be improved by upgrading
Agartala airport as an
international airport and by setting up one more
green-field airport in the state.
The telecom connectivity of Tripura with the rest of
the country also needs to
be improved, possibly by establishing an alternative
link through Bangladesh. India can significantly
accelerate the development process, by further
improving relations with neighbouring countries,
especially Bangladesh. The
Look-East Policy of the government of India focusing
on the South East Asian countries
and the agreements signed between India and
Bangladesh for improving
connectivity and trade, if properly implemented,
have the potential to
transform the north eastern region from a
geographically isolated remote corner
to a strategic region of the country. In my view,
the 12th five year plan should
place very high emphasis on implementation of
projects that will facilitate the
connectivity of the north eastern region with
Bangladesh and with the South
East Asian nations. This will create the enabling
environment for faster
socio-economic development of the region. India,
being the largest country in
the region, needs to adopt more magnanimous approach
while responding to the
genuine demands and requests from our neighbouring
countries. For instance,
with the setting up of 736 MW gas-based power
project in Tripura, the state has
become power-surplus and is not in a position to
fully utilise its allotted
share of 200 MW now and in near future. The state
shall have to necessarily
sell a part of this allocation. In such a situation,
if Bangladesh, who
facilitated setting up of the project, by allowing
movement of heavy equipment
through their soil, makes a request to purchase a
part of this power, we should
have no difficulty in accepting such a request,
which may obviously help to
improve the trans-border insurgency situation. When the approach paper to the
twelfth plan was being discussed by the
National Development Council, I had made a number of
suggestions regarding the north
eastern states in general, and Tripura in
particular, which have a number of
special problems. I had drawn attention to the
unfairness of the thirteenth
Finance Commission in penalising the small states in
the north east for
implementing Pay Commission recommendations; to the
fact that the PPP route
suggested by the union government for starting
projects was not workable in the
north east; to the need for starting educational
institutions under the aegis
of the union government; and to the need for sharing
the recurring expenditure
incurred on security, in a situation where
insurgency, though immediately
subdued, continued to wait in the wings, between the
centre and the states in
the ratio of 90:10. Though the Plan document is
cognisant of some of these
problems, it has not dealt with these issues
specifically In the case of Tripura, I had
asked for legal rights to be given to the
non-tribal population that had occupied forest lands
for long; for a central
scheme to provide financial assistance to the tribal
population that had
acquired rights over land; for a scheme for the
provision of subsidised and
decent housing for SC/ST, OBC, minorities and
marginal households; and for
making RKVY funds available without any “strings.”
The plan has not responded
to these issues specifically. It has of course
expressed general satisfaction
at the faster rate of growth of the special category
states than of the country
as a whole during the eleventh plan; but as I have
tried to suggest in this
speech, a higher growth rate in itself is no panacea
for the people’s problems.
They have to be specifically taken care of. Thank you for your attention.
