The Hindu Business Line : Violence in the growth equation

Violence shares a close nexus with poverty caused by decades of gradual shutting of all channels of social mobility. The economic fallout apart, this has had grave repercussions on the prospects of the affected

Naxalism is on a resurgence and many a State is facing the wrath of this problem. Economic factors, especially poverty, underpin this problem. Poverty is a multi-dimensional phenomenon manifesting itself in a vicious circle of low income, low consumption, poor health and education, poor skills and lack of job opportunities. Violence shares a close nexus with poverty caused by decades of gradual shutting of all channels of social mobility. The economic fallout apart, this has had grave repercussions on the prospects of the affected, in turn eroding their self-esteem.

Several years ago, Dudley Seers, in his article "The Meaning of Development" (International Development Review, Vol. II No.4) stated: "The questions to ask about a country's development are: What has been happening to poverty? What has been happening to inequality? What has been happening to unemployment? If all three of these have become less severe, then beyond doubt this has been a period of development... If one or two of these central problems have been growing worse, especially all three have, it would be strange to call the result `development', even if per capita income doubled."

These views find an echo in Prof Deepak Nayyar's recent paper, "Economic Growth in Independent India: Lumbering Elephant or Running Tiger" (Economic and Political Weekly, April 15, 2006).

Dichotomy: Growth, development

This apparent disjoint between growth and development comes to sharp focus in the following comparison made by Prakash Singh in his book The Naxalite Movement in India: "The employment scenario in the country is gloomy in an otherwise bright picture of orchestrated economic growth. On the one hand, we have the Goldman Sachs report released in November 2003, which said that India would be the third largest economy by the year 2050. On the other hand, the survey of National Sample Survey Organisation on Employment and Unemployment (55th Round, 1999-2000), which says that the rate of growth of employment ... declined from 2.7 per cent per annum in 1983-94 to 1.07 per cent per annum in 1999-2000."

Allocation, distribution

This brings the focus on allocation and distribution, not merely of wealth but of the economic tools to generate it. Jobless growth is sustainable neither in economics nor in politics. It cannot be a one time or even periodic doling out of alms, but a continuous process whereby more numbers from society are harnessed in the various economic processes of wealth creation so that the results of the growth lead to development of the masses, in improving their general standards of living and, in turn, in the reversal of the historical processes of social marginalisation. It is India's failure in the second half of the 20th Century to translate growth into equitable development that lies at the root of most of its simmering internal discontent and dissent.

It would be futile to draw comfort from the fact that other countries, far more developed than India and faring much better on the various indices of Human Development, compare poorly with India as far as happiness is concerned. If a recent report by the New Economics Foundation, an organisation that compiles the Happy Planet Index (HPI), is anything to go by, India ranks second only to China in terms of happiness in the list of 11 nations ranked in terms of GDP, leaving far behind the richer denizens of the G-8. At the root of this apparently contradictory phenomenon is probably the typically Indian philosophy that happiness comes from within, the material gains of outside may at best be sources of pleasure.

While poverty lies at the centre, it is equally important to address caste-based considerations to counter the root of the conflict both from within and without. What is needed is a strong desire to correct historical injustice through out-of-box thinking, to go to the cultural roots of the violence on the economic equations. For rapid and equitable growth, economic tools such as micro-finances have to be strengthened through vehicles such as the Regional Rural Banks.

Encouraging co-operatives

Co-operatives also should be encouraged. Opening up channels of social mobility for the Dalits may curb caste-based alignments and make them at the same time attain sustainable economic clout thus preventing the growth of the extremists who tend to limit themselves to forcible and static redistribution of the existing wealth rather than helping it grow.

This helps us appreciate how accurate Gandhiji was in his observation when he refused to `insult' the naked by giving them the cloth and emphasised the need to provide them jobs that would take care of the clothes automatically. Together, the job with the clothes, will also ensure a silent but significant and resolute correction in the social positioning of that man as well.

Thus, while development by itself is essential, it shall attain meaning only when the state creates capabilities for the sharing of such wealth and ensuring that all of its people are empowered to escape from all deprivation.

(The author is a member of Indian Revenue Service. The views expressed are personal.)