A year is a good time to take stock.When I started writing Beyond Business last August, the idea was to give aglimpse of the non-business (rather, political) overtones of economic issues inIndia. It was soon apparent that there were few events that could be calledfully economic in nature. In India now, from SEZs to budgets to job quotas toWTO, all overtly economic issues are covertly political. In spite of whatcorporate hotshots and Chidambaram Inc like to — or would have you —believe, the wheels of the economy barely turn on their own; they’re takenforward or moved back or juggernauted by complex behind-the-scene politicalmaneuvers. When the economy moves (or not moves) at 8 or 10 per cent, manypeople are affected, either profoundly or mildly. And every time we grow a pointmore, the number of affected people increases.
Before this magazine/website’s oldcritics start hitting on my middle-aged, upper-caste and upper classidiosyncrasies, let me clarify that this is not a mere defense of thegrowth-trickle-down theory. While high economic growth is a surefire way toeliminate poverty, the speed depends on the country (and the people who run itand in the way they run it). As long as there are groups of politicians/babuswho don’t give a damn for anything else other than lining their own pocket andwinning the next coveted term/posting, the number of the dispossessed andunderprivileged will diminish slowly. I strongly maintain that there is no DullIndia outside the Shining India, poor India outside the rich India, or producingIndia outside the consuming India. They all exist side by side with palpableinterlinkages. Wherever the linkages get strengthened, growth percolates faster.And if it is not happening, know it for sure that there are forces at work tokeep the linkages weak.
Frankly, there are two interestingfigures that triggered off this philosophical bout—Rs 63000 crore and 2.7 percent. The second is the average annual employment growth between 1999-2000 and2004-2005 according to the latest thick-sample NSS data, which, interestingly,is much higher than our population growth of 1.7 per cent. Compared to the 1.2per cent recorded between 1993-1994 and 1999-2000, this has to be very good newsindeed, enough to shut up at least those who have been shouting "joblessgrowth" from the rooftops. Of course, it is another matter that this sharprise in job growth, especially in this century, hasn’t managed to make anysignificant dent in poverty, which the NSS says is still stuck at 22 per cent(of the population) in 2004-05. There could be many explanations for this: loweractual wages, asset depreciation (loss of land or crops), higher actualconsumption (costlier household budgets), and so on.
But what this figure does is to shakethe foundation of the National Rural Employment Guarantee programme, one of thebiggest components of the government of India’s total centrally sponsoredschemes that eat up a whopping Rs 63000 crore every year. Do we really need thisprogramme if, even without this gigantic prod, employment is growing so rapidly?More important, if the poverty rate is anyway going down at one per cent a year,it would take two decades to just eliminate the backlog, in which scenario wouldan NREG make a palpable difference to overall poverty or justify its enormouscost of Rs 11300 crore in this year’s budget?
Compare this hand-held anti-povertyschemes to general price reform, which is a logical corollary of generaleconomic policy reform or even tax reform. I’ll take a few examples that cutacross age, class and caste and that I have personally sampled. Considerbiscuits. The price of a glucose biscuit pack has stayed at Rs 5 for such a longtime that nearly all the urban poor I’ve seen have no trouble consuming one.Lest critics accuse me of selling western junkfood to kids and not healthieralternatives, I’ll take another example, of Marie biscuits. The most expensivebrand of Marie costs Rs 13 for 33 biscuits. Even here, the price has probablyinched up by a rupee in the past few years.
With some trepidation, I take anotherexample, of sanitary napkins. I take this example because this product’scontribution to women’s health is salutary and vital. Competition and tax-breaksnow allow a leading company to offer the best-technology (max absorption-maxdry) brand at Rs 49 for 8, while the cheapest branded product is available forRs 22, bringing it within easy reach of women who work as household help.
The third example is apparel and shoes.It is still possible to get rubber sandals for Rs 15, adult-size sneakers for Rs100 and shirts for Rs 80 even in the capital city. They are all perfectly new,usable and durable.
Of course, all this could still go onto prove that the urban poor is a mile better off than its rural counterpart,but the climbing success of rural provisions chain stores selling everythingfrom fertiliser to toothpaste proves that the situation is not very different inmuch of rural India. The time has come for some suspension of disbelief. A tenper cent growth rate, believe me, is not a joke. It can create wonders for thosewho are interested in taking part in this growth process.
But it is imperative to get the marketin order first, be it in eatables or in jobs or education. The last two don’texist. Some others, like in houses, exist in a lopsided fashion. Unless wechange that, the milk of human kindness in the form of giveaway schemes willreach nowhere. When we change that, we won’t need even any internal aid.
