Pluralistic Interventions for Customised Development

The socio-economic diversities of Bharat, with highly pluralistic techno-economic profiles and vast multiplicity of occupations, spread across an area exceeding over 5259 times the size of entire Singapore, need well-customised interventions for development, focused at inclusive growth. On reviewing the pluralistic techno-economic profiles of the country, we find the high profile Non-Resident Indians (NRIs), drawing as high as up to Rs. 525 crores p.a. as the chief executive officers (CEOs) of large MNCs, as well as the traditional tribal communities, solely or mostly dependent over a collection of the secondary forest, produce as their sole means of livelihood with an income as low as Rs 5000 p.m. or Rs 166 per day. Geographically, there are most sparsely populated blocks in the districts of Barmer, Jaisalmer or Leh-Ladakh, characterised by acute water scarcities, occupational hardships and highly under-developed infrastructure, including lack of all civic amenities.

To the contrary, there are metros with best possible infrastructural support, high comfort generating public facilities and very advanced commercial and financial architecture to facilitate and sustain the best state of the art IT and business services of all kinds. India needs to harness there pluralistic capabilities, comprising a sprawling core sector; vast heritage of agriculture, allied activities and various crafts; one of the most developed service sector of the world; and an elaborate manufacturing sector spread across 400 industry clusters and manifold industrial estates, though mostly characterised by assembly lines, based chiefly on outsourced original equipment and sub-assemblies. Besides, Bharat is home to 17.5 per cent of the global population and 20% of the world’s youth.

But, it has the second highest rate of youth idleness, after South Africa, where 30.8 per cent of our youth between 15-29 years of age is with “no employment, education or training” (NEET) status. To the contrary, there are countries like the Singapore, Sweeden, Switzerland, Germany etc., finding lack of working age youth to man various positions in the knowledge-based sectors, falling vacant on account of superannuation and finding it difficult to sustain their present state of manufacturing and exports. On the other hand, India has seen it next to impossible, to generate necessary investment in the domestically owned manufacturing capacities, required to create employment for at least a million of the youth per month or 1.20 core youth in aggregate per annum, acquiring working age per month or per annum respectively. India also has to bridge the vast gap in its contribution towards world manufacturing, as it has a small share of 2.1 per cent in world manufacturing vis a vis 22 per cent share of China in the world manufacturing, which has even pushed the US at number two with just 17.6 per cent. Now Japan has only 1.6 per cent of the world population but has a 7 per cent contribution in world manufacturing. China too had 2.4 per cent of participants in world manufacturing in 1991. But, under acquiring a robust share in the world manufacturing, China could succeed in having the highest ratio of the middle-income group in its total population, vis-a-vis all other countries of the world, by generating quality employment in manufacturing and allied activities.

Rampant unemployment and lack of quality employment in our economy, leading to poor nutrition, as well as malnourishment, have prompted India to 100th place in the world hunger index with the highest rate of child death rate in the world comprising 4.8 per cent for the children, dying below the age of 5. There are 77 per cent families in the country, which do not have a single regular wage earner and 60.6 of the workers are such who also do not even get a casual job throughout the year. There is only 17 per cent of workers who are on a regular wage or salary, and 71.2 per cent of the workers do not have any kind of social security, related to their jobs.

The data from socio-economic caste census(SECC), released by the Government on July 4, 2015, further reveal that rural India accounts for 73 per cent of households and 74 per cent of these rural households survive on a monthly income of less than Rs 5,000 (Rs. 166 per day) for its highest earner. The most significant number of such families is in Chhattisgarh — over 90 per cent, which is reflective of almost a nightmarish life of such a vast amount of households even after six and half decades of Independence. Moreover, according to these data, 51 per cent of the households are engaged in casual, manual labour subjecting them to dark and random forces of uncertainty for their survival and subsistence. Now only 30 per cent in cultivation, revealing that now agriculture is also not in a position to support more than a third of rural households. According to the SECC data, still, after 24 years of economic reforms, 31.26 per cent of the total rural households as are in the category of “Poorest of the poor” where the main earner of the family has an “insecure and uncertain” source of income and these households too live in a “one-room house with kutcha walls and kutcha roof”. Among the SCs and STs, only 17.70 per cent of SC and 10.50 per cent of ST households have their own houses. The miseries of rural India do not end here, as 44.5 per cent of rural households live in Kuccha houses.

The automatically excluded households devoid of any tangible variable of inclusiveness as per the SECC found to constitute 39.4 per cent of the total rural population and constitute households with none of the following: motorised vehicles, mechanised agricultural equipment, Kisan credit card with credit limit of Rs 50,000 and above, households with any member as a government employee, households with non-agricultural enterprises registered with the government, any family member earning more than Rs 10,000 a month, those paying income/professional tax, living in houses with three or more rooms with all having pucca walls and roof, owning a refrigerator, landline phone, possessing irrigated land etc. Thus almost 40 per cent of the rural population falls below the poverty line by this automatic exclusion. How long should these families wait to get at least one of these physical variables of inclusiveness is not satisfied. Whether in the same generation or their next generation.

The big surprise in the SECC was that, even after the preliminary results are out, there does not appear any tangible progress in rural as well as urban India even after a quarter century of the reforms process started in 1991, to take economy on a new growth trajectory with its focus on farmers, agriculture industry and commerce, the SECC shows that over 51 per cent of rural India survives on manual casual labour, while only 30 per cent lives on cultivation. Thus, now agriculture is no more able to sustain the rural households as well, after a level, it was believed to be doing so till yet. Of the rest, 1.61 per cent are non-agricultural enterprise owners, while less than 1 per cent is either beggars or ragpickers. But their number is also above one crore in name almost 157 countries in the world have a population of less than one crore. Besides a rational analysis, one finds that the more impoverished working class is regressing.

Between 1990 and 2015 India’s per capita income is reported to have gone up three times with average annual growth in per capita income by more than 5 per cent. But, the annual wage growth for the industrial workers had been only 1 per cent during the same period, as revealed by the annual survey of industries. To the contrary, the corporate profits in the net value added have grown from 20 per cent to 45 per cent. The share of wages in the net value added of the corporate sector has gone down from 32 per cent to 12 per cent between 1983-2013 the number of dollar billionaires from India in the Forbes’ list rose from 1 to 49 by 2010 and 90 in 2014 almost third largest number in the world. This fast-growing income divide between India’s rich and poor can be largely attributed to the dismal rate at which real wages of industrial workers have grown over the past three decades. It is evident from the data from Annual Survey of Industries, published by Mint, whereby the real wages have increased by just 1 per cent per annum between 1983 and 2013! In fact, the real wages appear to have grown or far less than the growth in per capita income or productivity leading to worst miseries for the wage earners. This completely overrules the trickle-down theory based on the western economic assumption that the two (growth rate and wages) move in tandem. Moreover, the rise in corporate profitability, mainly from 1991 onwards is phenomenal, and the wage rise has kept on lagging far more and more behind. The share of net corporate profits as a percentage of net value added in the corporate sector has more than doubled. To the contrary, the share of wages has gone down to less than half in the net value added in the corporate sector.

Bharat, therefore, has to move on a multipronged approach to incorporate all of the multiple economic profiles and occupation including agriculture, industry, commerce and services to place increased disposable income in the hands of all the sections, enough for a decent living. Agriculture: Agriculture needs to get precedence over all sectors, as more than half of our population is solely dependent over agriculture. Moreover, India has the world’s highest arable area of 189 million hectares and second highest irrigated area of 67 million hectares. Almost 20 crore hectare meters of water going into the ocean without being utilised, can raise our irrigation potential to 165-170 million hectares, that can help us, feed two third of the world’s population. Our yield in the unirrigated area is 700 kg cereals per ha, while for the irrigated area, it is 3000 kg per ha. The countries like Netherland, mostly dependent over organic manures reap 9 tonnes food grains per ha. Therefore, enhanced public investment in agriculture can provide revolutionaries agriculture even if we can raise our average yield of cereals to 7 Tonnes per ha, by increasing our irrigation potential and productivity. It would be discussed in the concluding article.(The writer is an expert on global trade scenario and Rector of Pacific University, Udaipur)