Why India Trails China- Amartya Sen


 

MODERN India is, in many ways, a success. Its claim to be the world’s largest democracy is not hollow. Its media is vibrant and free; Indians buy more newspapers every day than any other nation. Since independence in 1947, life expectancy at birth has more than doubled, to 66 years from 32, and per-capita income (adjusted for inflation) has grown fivefold. In recent decades, reforms pushed up the country’s once sluggish growth rate to around 8 percent per year, before it fell back a couple of percentage points over the last two years. For years, India’s economic growth rate ranked second among the world’s large economies, after China, which it has consistently trailed by at least one percentage point.

The hope that India might overtake China one day in economic growth now seems a distant one. But that comparison is not what should worry Indians most. The far greater gap between India and China is in the provision of essential public services — a failing that depresses living standards and is a persistent drag on growth.

Inequality is high in both countries, but China has done far more than India to raise life expectancy, expand general education and secure health care for its people. India has elite schools of varying degrees of excellence for the privileged, but among all Indians 7 or older, nearly one in every five males and one in every three females are illiterate. And most schools are of low quality; less than half the children can divide 20 by 5, even after four years of schooling.

India may be the world’s largest producer of generic medicine, but its health care system is an unregulated mess. The poor have to rely on low-quality — and sometimes exploitative — private medical care, because there isn’t enough decent public care. While China devotes 2.7 percent of its gross domestic product to government spending on health care, India allots 1.2 percent.

India’s underperformance can be traced to a failure to learn from the examples of so-called Asian economic development, in which rapid expansion of human capability is both a goal in itself and an integral element in achieving rapid growth. Japan pioneered that approach, starting after the Meiji Restoration in 1868, when it resolved to achieve a fully literate society within a few decades. As Kido Takayoshi, a leader of that reform, explained: “Our people are no different from the Americans or Europeans of today; it is all a matter of education or lack of education.” Through investments in education and health care, Japan simultaneously enhanced living standards and labor productivity — the government collaborating with the market.

Despite the catastrophe of Japan’s war years, the lessons of its development experience remained and were followed, in the postwar period, by South Korea, Taiwan, Singapore and other economies in East Asia. China, which during the Mao era made advances in land reform and basic education and health care, embarked on market reforms in the early 1980s; its huge success changed the shape of the world economy. India has paid inadequate attention to these lessons.

Is there a conundrum here that democratic India has done worse than China in educating its citizens and improving their health? Perhaps, but the puzzle need not be a brainteaser. Democratic participation, free expression and rule of law are largely realities in India, and still largely aspirations in China. India has not had a famine since independence, while China had the largest famine in recorded history, from 1958 to 1961, when Mao’s disastrous Great Leap Forward killed some 30 million people. Nevertheless, using democratic means to remedy endemic problems — chronic undernourishment, a disorganized medical system or dysfunctional school systems — demands sustained deliberation, political engagement, media coverage, popular pressure. In short, more democratic process, not less.

In China, decision making takes place at the top. The country’s leaders are skeptical, if not hostile, with regard to the value of multiparty democracy, but they have been strongly committed to eliminating hunger, illiteracy and medical neglect, and that is enormously to their credit.

There are inevitable fragilities in a nondemocratic system because mistakes are hard to correct. Dissent is dangerous. There is little recourse for victims of injustice. Edicts like the one-child policy can be very harsh. Still, China’s present leaders have used the basic approach of accelerating development by expanding human capability with great decisiveness and skill.

The case for combating debilitating inequality in India is not only a matter of social justice. Unlike India, China did not miss the huge lesson of Asian economic development, about the economic returns that come from bettering human lives, especially at the bottom of the socioeconomic pyramid. India’s growth and its earnings from exports have tended to depend narrowly on a few sectors, like information technology, pharmaceuticals and specialized auto parts, many of which rely on the role of highly trained personnel from the well-educated classes. For India to match China in its range of manufacturing capacity — its ability to produce gadgets of almost every kind, with increasing use of technology and better quality control — it needs a better-educated and healthier labor force at all levels of society. What it needs most is more knowledge and public discussion about the nature and the huge extent of inequality and its damaging consequences, including for economic growth.

 

#India – The Neglect of Health, Women and Justice #Vaw #Womenrights


A basket weaver at work with her baby at her side, in Tamil Nadu. The infant mortality rate is very high for working women, particularly those in the primary sector, a large proportion of whom are labourers.

A basket weaver at work with her baby at her side, in Tamil Nadu. The infant mortality rate is very high for working women, particularly those in the primary sector, a large proportion of whom are labourers.

Vol – XLVIII No. 23, June 08, 2013 | A K Shiva Kumar , EPW
A report on the 2013 deliberation of the Kolkata Group at its 10th workshop which focused on healthcare, the status of women and social justice in India.
A K Shiva Kumar (akshivakumar@gmail.com) is convener of the Kolkata Group workshops which are organised by Pratichi (India) Trust, the Harvard Global Equity Initiative and UNICEF India.
At the 10th annual Kolkata Group workshop in February this year, 40 policymakers, development practitioners, non-governmental organisation (NGO) representatives, scholars, activists, journalists, politicians and development experts convened to take stock of the state of women, health equity and social justice in India. The group focused on two major areas of concern. First is the abysmal state of healthcare in India driven by the lack of strong governmental policies, investments and direct operations, and the growing size and exploitive practices of commercial providers. And second is the limited progress in women’s rights, indeed sometimes retrogression, that is reflected by a host of inequities, insecurities and injustices.
The Kolkata Group is an annual forum that deliberates on ways of advancing social justice, human development and human security in India. The group examines available information, seeks positive solutions, and shares its recommendations with wide audiences – government, civil society, the media, and the public. The group believes that bringing together outstanding people from different walks of life to discuss “good practices” and “lessons learned” can blend values, knowledge and discourse as part of a process of public reasoning for social action. Every year the group discussions have a particular focus. Themes in the past have included equity, security and basic education, rights and resources, child rights and development, economic progress and social values, and eliminating injustices in India. The theme in 2013 was “Public Action and Its Future”. The main focus was on health and nutrition as well as the alarming status of women in Indian society.
Balancing Economic Growth
Amartya Sen opened the workshop by underscoring that economic growth in India is good and necessary, because average incomes must be raised to achieve reasonable living standards and extensive income redistribution alone would not be sufficient for shared well-being. Growth generates private income, and even more importantly, it generates public resources which can be spent on the provision of a host of essential goods and services that contribute to decent living standards. Having noted this, Sen argued that it would be a mistake to “sit back” and rely on economic growth alone to transform the living conditions of the unprivileged. While India has much to learn from growth-mediated development elsewhere in the world, it must avoid unaimed opulence – an undependable, wasteful way of improving the living standards of the poor. Even today, after 20 years of rapid growth, India is still one of the poorest countries in the world, something that is often lost sight of, especially by those who enjoy world-class living standards thanks to the inequalities in the income distribution.
On several health indicators, India has fallen behind many of its neighbours. Overall in 1990, India had the best social indicators in south Asia, next to Sri Lanka. But now India ranks second-worst, ahead of only Pakistan. This is despite the fact that during the last 20 years, India has grown richer much faster than its neighbours. Take for instance Bangladesh. India’s per capita income was estimated to be 60% higher than Bangladesh in 1990. By 2010, India’s was 98% higher (about double). However, during the same period, Bangladesh overtook India in terms of a wide range of basic social indicators: life expectancy, child survival, fertility rates, immunisation rates, and even some (not all) schooling indicators such as estimated “mean years of schooling”. Bangladesh’s relatively rapid transformation of social indicators seems to relate closely to the much greater participation and agency of women in the social services as well as in private economic activities, compared with India.
Equally intriguing is that Nepal is also catching up rapidly with India, even overtaking India in some respects. Around 1990, Nepal was way behind India in terms of almost every development indicator. Today, social indicators for both countries are much the same (sometimes a little better in India still, sometimes the reverse), in spite of per capita income in India being about three times higher than in Nepal. Looking at their south Asian neighbours, the Indian poor are entitled to wonder what they have gained – at least so far – from the acceleration of economic growth.
Even though India is still managing to achieve comparatively high growth rates, despite its very insufficient public provision of basic services, this is undoubtedly a source of future concern, and may already be playing a part in India’s contemporary slowdown. High growth in east Asia has been led by, and reinforced by, rapid formation of human capabilities, and this is the shared experience of Japan, China, South Korea and other fast moving economies and societies in Asia. The contrast with India cannot be sharper. Apart from the very limited reach of good quality healthcare and basic education, even today 48% of the population do not even have toilets in their homes. India suffers a chronic power shortage as the breakdown of the grid in north India last year highlighted, but it is also worth bearing in mind that a third of the population in the “black out” area did not ever have any electricity connection anyway. But Sen said you would not think that power supply was a problem in India if you visited government offices where the air-conditioning is kept at a bone-chilling 16 degrees celsius in the summer. This was quite unlike government offices in other Asian countries, which keep the temperature around 23 degrees, which is comfortable enough. It is hard to detect any sign of power supply being a problem if one visits over-chilled offices, restaurants, or hotels, patronised by the comparatively rich, and it would be hard to guess that a third of the Indian population is without electricity altogether. Is it also not ironical – or worse – that political parties support, rather than object to, subsidising electricity for the “middle class” in the name of the aam aadmi? This goes along with support for other middle-class consumptions, such as diesel, cooking gas, and other ingredients of a lifestyle from which the poor are excluded.
Health Inequities
Discussions drew attention to the Asian experience, beginning with Japan in 1860 after the Meiji Restoration, South Korea, Taiwan, Hong Kong, Singapore, Thailand and China, where economic progress was driven by rapid human capabilities formation. We, in India, are trying to target a high growth rate without investing adequately in basic health, nutrition and education. In this connection, several participants pointed to the appalling state of India’s health system. Public healthcare has been relegated to low priority by the government, given that public spending on health in India is around 1.2% of its gross domestic product (GDP) – and has remained so for the past five years – whereas it is 2.7% of GDP in China.
The Kolkata Group reiterated that the most urgent need in healthcare in India today is for an affirmative approach that advances universal health coverage through reversing the financial neglect of public healthcare and the removal of debilitating illusions about what private healthcare and commercial insurance can achieve without firm and active public policies. Influential policymakers in India seem to be attracted by the idea that private healthcare, properly subsidised, or private health insurance, subsidised by the state, can meet the challenge. However, there are good analytical reasons why this is unlikely to happen because of informational asymmetry (the patient can be easily fooled by profit-seeking providers on what exactly is being provided) and because of the “public goods” character of healthcare thanks to the interdependences involved. There are also major decisional problems that lead to the gross neglect of the interests of women and children in family decisions. Nearly every country in the world which has achieved anything like universal health coverage has done it through the public assurance of primary healthcare (whether in Europe, Canada, or much of east Asia).
India’s leaders ought to recognise the necessity for the state to ensure comprehensive quality primary healthcare for all. Related to the main focus of the recommendations, the Kolkata Group urged the government to increase public spending on healthcare to achieve its well-considered pledge of devoting at least 3% of GDP to healthcare. It is particularly important to recognise that there are good reasons for demanding universal entitlements to primary healthcare for all. Effective regulations and ethical professionalism are also essential. The steady increase in public revenues generated by economic growth can and should be fruitfully committed to this extremely important cause.
Child Nutrition
Related to health is India’s worrisome record in reducing child malnutrition. Noting the unusually high levels of under-nutrition in India, the Kolkata Group argued for a firm recognition of the Right to Food in general and legislation to guarantee the entitlements to food for all. Recent experience (including Supreme Court orders on the right to food as well as the National Rural Employment Guarantee Act) shows the value of putting economic and social rights in relation to a legal framework. Legislation should recognise that food and nutritional security depends not just on food but on a set of related interventions that promote women’s health and nutrition, safe drinking water, proper sanitation and healthcare.
The Kolkata Group had earlier endorsed the proposal for creating durable legal entitlements that guarantee the right to food in India. A Right to Food Act covering justiciable food entitlements should be non-discriminatory and universal. Entitlements guaranteed by the Act should include foodgrains from the public distribution system (PDS), school meals, nutrition services for children below the age of six years, social security provision and allied programmes. Ensuring non-discriminatory access and universal entitlements requires special initiatives that focus on the discriminated, disadvantaged and vulnerable groups in society. Last but not least, design and implementation should include effective public participation, grievance redress provisions and independent oversight.
Women’s Rights
The Kolkata Group also drew attention to the limited progress in women’s rights that continues to be plagued by a host of inequities, insecurities and injustices. Discussions were grounded in the developments following the incident of gang rape on 16 December 2012. Nirbhaya’s statement, “I want to live”, provided a very strong emotional impetus to the protests by large numbers of women and men from different sections of society. The fact that many people went past without helping when Nirbhaya was lying there with her friend wounded reveals something awfully callous about us. Similarly, it is not to our glory that dalit women have been violated and raped again and again. And there has been relatively little noise or protest. Underlying causes for the neglect and abuse of women include patriarchy as well as deep cultural factors.
Increasing the enormity of punishment in cases involving crimes against women does not necessarily solve the issue of rising crime against women. Awarding the death penalty, for example, can serve the purpose of revenge but it does not help in social reform. Society needs to ensure that the police are serious about such crimes, there is a system that will punish those responsible for the crime, and that such matters are tried expeditiously in a court. Indian women experience much greater difficulties in getting help from the police, and consequently do not trust the police to work in a professional manner. Protocols should be adopted to protect female complainers and in moving the court swiftly enough to get a judgment quickly.
The Kolkata Group noted that the violations of women’s rights are related to the continuation of early child marriage, violence against women, discriminatory practices, the impunity and bias that permeate the functioning of the legal and police systems, malnutrition of women and children, increasing prevalence of sex selection at birth as well as inadequate women’s autonomy, health, education, and freedoms. The steps ahead must recognise the recommendations of the Justice J S Verma Committee report promoting women’s bodily integrity, dignity and sexual autonomy. Serious attention should be paid to health, education, nutrition as well as the lack of adequate recognition of women’s well-being and agency. The group also underscored the importance of public protests and the need to keep raising the demand for a police and legal system that protects the rights of women. Women’s needs have to be more centrally recognised as a political priority for their voices to be heard.
[Chaired by Amartya Sen, Kolkata Group attendees this year were Sabina Alkire, Louis-Georges Arsenault, Shabana Azmi, Abhay Bang, Countess Albina du Boisrouvray, Lori Calvo, Achin Chakraborty, Gregory Chen, Lincoln Chen, Abhijit Chowdhury, Asim Dasgupta, Keshav Desiraju, Antara Dev Sen, Jean Dreze, Shiban Ganju, Dilip Ghosh, Joaquin Gonzalez-Aleman, R Govinda, Shaibal Gupta, Pratik Kanjilal, Manabi Mazumdar, Surjya Kanta Misra, Nachiket Mor, Poonam Muttreja, Sridhar Rajagopalan, Kumar Rana, Sujatha Rao, Srinath Reddy, Nidhi Sabharwal, Abhijit Sen, Amartya Sen, Nandana Sen, A K Shiva Kumar, Amarjeet Sinha, Shantha Sinha, Sukhadeo Thorat and Sitaram Yechury.]

 

#India – Why Salwa Judum was held Unconstitutional by Supreme Court


 

Excerpts from

NANDINI SUNDAR & ORS.
VERSUS
STATE OF CHATTISGARH

 

What is ominous, and forebodes grave danger to the security
and unity of this nation, the welfare of all of our people,
and the sanctity of our constitutional vision and goals, is
that the State is drawing the wrong conclusions, as pointed
out by the Expert Group of the Planning Commission cited
earlier. Instead of locating the problem in the socioeconomic matrix,

and the sense of disempowerment wrought by

the false developmental paradigm without a human face, the
powers that be in India are instead propagating the view
that this obsession with economic growth is our only path,
and that the costs borne by the poor and the deprived,
disproportionately, are necessary costs. Amit Bhaduri, a
noted economist, has observed:
“If we are to look a little beyond our middle class noses,
beyond the world painted by mainstream media, the picture is
less comforting, less assuring…. Once you step outside the
charmed circle of a privileged minority expounding on the
virtues of globalization, liberalization and privatization,
things appear less certain…. According to the estimate of the
Ministry of Home Affairs, some 120 to 160 out of a total of 607
1 Ajay K. Mehra, supra note 114
districts are “Naxal infested”. Supported by a disgruntled and
dispossessed peasantry, the movement has spread to nearly onefourth of Indian territory. And yet, all that this government
does is not to face the causes of the rage and despair that
nurture such movements; instead it considers it a menace, a lawand-order problem…. that is to be rooted out by the violence of
the state, and congratulates itself when it uses violence
effectively to crush the resistance of the angry poor…. For the
sake of higher growth, the poor in growing numbers will be left
out in the cold, undernourished, unskilled and illiterate,
totally defenceless against the ruthless logic of a global
market…. [T]his is not merely an iniquitous process. High growth
brought about in this manner does not simply ignore the question
of income distribution, its reality is far worse. It threatens
the poor with a kind of brutal violence in the name of
development, a sort of ‘developmental terrorism’, violence
perpetrated on the poor in the name of development by the state
primarily in the interest of corporate aristocracy, approved by
the IMF and the World Bank, and a self-serving political class….
Academics and media persons have joined the political chorus of
presenting the developmental terrorism as a sign of progress, an
inevitable cost of development. The conventional wisdom of our
time is that, There Is No Alternative…. And yet this so widely
agreed upon model of development is fatally flawed. It has
already been rejected and will be rejected again by the growing
strength of our democratic polity, and by direct resistance of
the poor threatened with ‘developmental terrorism”.
15.As if the above were not bad enough, another dangerous
strand of governmental action seems to have been evolved
out of the darkness that has begun to envelope our policy
makers, with increasing blindness to constitutional wisdom
and values. On the one hand the State subsidises the
private sector, giving it tax break after tax break, while
simultaneously citing lack of revenues as the primary
reason for not fulfilling its obligations to provide
adequate cover to the poor through social welfare measures.
On the other hand, the State seeks to arm the youngsters
amongst the poor with guns to combat the anger, and unrest,
amongst the poor.
16.Tax breaks for the rich, and guns for the youngsters
amongst poor, so that they keep fighting amongst15
themselves, seems to be the new mantra from the mandarins
of security and high economic policy of the State. This,
apparently, is to be the grand vision for the development
of a nation that has constituted itself as a sovereign,
secular, socialist and democratic republic. Consequently,
questions necessarily arise as to whether the policy
makers, and the powers that be, are in any measure being
guided by constitutional vision, values, and limitations
that charge the State with the positive obligation of
ensuring the dignity of all citizens.
17.What the mandarins of high policies forget is that a
society is not a forest where one could combat an
accidental forest fire by starting a counter forest fire
that is allegedly controlled. Human beings are not
individual blades of dry grass. As conscious beings, they
exercise a free will. Armed, the very same groups can turn,
and often have turned, against other citizens, and the
State itself. Recent history is littered with examples of
the dangers of armed vigilante groups that operate under
the veneer of State patronage or support.
18.Such misguided policies, albeit vehemently and muscularly
asserted by some policy makers, are necessarily contrary to
the vision and imperatives of our constitution which
demands that the power vested in the State, by the people,
be only used for the welfare of the people – all the
people, both rich and the poor -, thereby assuring
conditions of human dignity within the ambit of fraternity
amongst groups of them. Neither Article 14, nor Article 21,
can even remotely be conceived as being so bereft of
substance as to be immune from such policies. They are
necessarily tarnished, and violated in a primordial sense
by such policies. The creation of such a miasmic16
environment of dehumanization of youngsters of the deprived
segments of our population, in which guns are given to them
rather than books, to stand as guards for the rapine,
plunder and loot in our forests, would be to lay the road
to national destruction. It is necessary to note here that
this Court had to intercede and order the Government of
Chattisgarh to get the security forces to vacate the
schools and hostels that they had occupied; and even after
such orders, many schools and hostels still remain in the
possession and occupancy of the security forces. Such is
the degree of degeneration of life, and society. Facts
speak for themselves.
19.Analyzing the causes for failure of many nation-states, in
recent decades, Robert I. Rotberg, a professor of the
Kennedy School, Harvard University, posits the view that
“[N]ation- states exist to provide a decentralized method
of delivering political (public) goods to persons living
within designated parameters (borders)…. They organize and
channel the interests of their people, often but not
exclusively in furtherance of national goals and values.”
Amongst the purposes that nation-states serve, that are
normatively expected by citizenries, are included the task
of buffering or manipulation of “external forces and
influences,” and mediation between “constraints and
challenges” of the external and international forces and
the dynamics of “internal economic, political, and social
realities.” In particular he notes:
“States succeed or fail across all or some of these dimensions.
But it is according to their performance – according to the
levels of their effective delivery of the most crucial political
goods – that strong states may be distinguished from weak ones,
and weak states from failed or collapsed states…. There is a
hierarchy of political goods. None is as crucial as the supply
of security, especially human security. Individuals alone,
almost exclusively in special or particular circumstances, can
attempt to secure themselves. Or groups of individuals can band17
together to organize and purchase goods or services that
maximize their sense of security. Traditionally, and usually,
however, individuals and groups cannot easily or effectively
substitute private security for the full spectrum of public
security. The state’s prime function is to provide that
political good of security – to prevent cross-border invasions
and infiltrations, to eliminate domestic threats to or attacks
upon the national order and social structure… and to stabilize
citizens to resolve their disputes with the state and with their
fellow human inhabitants without recourse to arms or other forms
of physical coercion.”1
20.The primary task of the State is the provision of security
to all its citizens, without violating human dignity. This
would necessarily imply the undertaking of tasks that would
prevent the emergence of great dissatisfaction, and
disaffection, on account of the manner and mode of
extraction, and distribution, of natural resources and
organization of social action, its benefits and costs. Our
Directive Principles of State Policy explicitly recognize
this. Our Constitution posits that unless we secure for our
citizens conditions of social, economic and political
justice for all who live in India, we would not have
achieved human dignity for our citizens, nor would we be in
a position to promote fraternity amongst groups of them.
Policies that run counter to that essential truth are
necessarily destructive of national unity and integrity. To
pursue socio-economic policies that cause vast disaffection
amongst the poor, creating conditions of violent politics
is a proscribed feature of our Constitution. To arrive at
such a situation, in actuality on account of such policies,
and then claim that there are not enough resources to
tackle the resulting socio-political unrest, and violence,
within the framework of constitutional values amounts to an
abdication of constitutional responsibilities. To claim
that resource crunch prevents the State from developing
1 “The Failure and Collapse of Nation-States – BREAKDOWN, PREVENTION AND FAILURE” in
“WHEN STATES FAIL: CAUSES AND CONSEQUENCES” Robert I. Rotberg, Ed., Princeton
University Press (2004).18
appropriate capacity in ensuring security for its citizens
through well trained formal police and security forces that
are capable of working within the constitutional framework
would be an abandonment of a primordial function of the
State. To pursue policies whereby guns are distributed
amongst barely literate youth amongst the poor to control
the disaffection in such segments of the population would
be tantamount to sowing of suicide pills that could divide
and destroy society. Our youngsters are our most precious
resource, to be nurtured for a better tomorrow. Given the
endemic inequalities in our country, and the fact that we
are increasingly, in a demographic sense, a young
population, such a policy can necessarily be expected to
lead to national disaster.
21. Our constitution is most certainly not a “pact for national
suicide.”1 In the least, its vision does enable us, as
constitutional adjudicators to recognize, and prevent, the
emergence, and the institutionalization, of a policing
paradigm, the end point of which can only mean that the
entire nation, in short order, might have to gasp: “The
horror! The horror!”

DOWNLOAD FULL JUDGEMENT HERE

Gujarat and The Illusion of Development


By – Shipra Nigam at kafila.org

MAY 23, 2013

This Guest post by SHIPRA NIGAM is a review of a volume of essays edited by Atul Sood Poverty Amidst Prosperity: Essays on the Trajectory of Development in Gujarat (Aakar Books 2013).

gujarat-farmers_507544e

Thousands of farmers protested in March this year in Ahmedabad against the state’sindustrialization policies

This volume of essays is the outcome of a detailed study by a team of contributing research scholars led by Atul Sood. This timely evaluation provides an insight into many crucial questions: What are the constituent elements of Gujarat’s growth story? To what extent can the successful features of Gujarat’s growth story be attributed to the political regime fashioned by Narendra Modi? Is it possible to replicate even this limited success story at the national level – as Modi’s starry eyed upper and middle class following would like to believe? More significantly: what are the implications of Gujarat’s Development Model in terms of its sustainability and its desirability? What happens when we assess this development through a set of comprehensive   measures, judge its implication for the average citizen’s material wellbeing, and see what it means for the political and economic rights of citizens?

The study proceeds through a meticulous examination of existing official data sources on investment, infrastructure, agriculture, manufacturing , employment, poverty , inequality, education and health expenditures and a set of other indicators of development.  These are then used to explain various developmental outcomes in the state in relation to national averages and the performance of other states which have also experienced high growth rates recently, such as Maharashtra, Haryana and Tamilnadu. Atul Sood’s cogently argued and insightful introduction brings together the different strands of the study, weaving the detailed findings into a coherent narrative. The picture that emerges interrogates both the normative implications of the ‘Gujarat development model’, and offers a powerful critique of its actual performance even judged in terms of its own self projections.

Unsurprisingly there is little that is new in Gujarat’s developmental model.  Its market led growth operates within the new-liberal paradigm that has for some decades been touted by the IMF, World Bank and inc as the panacea for all ills in developing countries. It is a frame that has been widely contested, critiqued and discredited for its abysmal failure in bringing in sustainable, equitable and participatory growth within the developing world. In fact, the paradigm has been held responsible for inducing and aggravating the enormous difficulties faced by many of the developing countries.  As the analysis in the book confirms, the ‘Gujarat Development Model’ is nothing more than a fervent adaptation and implementation of this chosen path favoured by the Indian state itself since the mid-1980s.  Hence, along with the imminent candidature of Narendra Modi as BJP’s prime ministerial nominee, the celebration of this developmental model by India Inc assumes omnious significance .

An Investment Fatigue?

The initial chapters by Ruchika Rani, Santosh Kumar Das, Pankaj Vashist and Gaurav Arya explore various aspects of Gujarat’s  GDP growth, investment flows and infrastructure development. While  Gujarat’s average  GDP growth rates in the past decade are higher than the national average and slightly above those of other high performing states, the gap has been narrowing overtime, which also coincides with an ‘investment fatigue’ that has set in recently. Since Gujarat’s infrastructure is not markedly different from other industrially competitive states, the substantial difference in investment levels is frequently attributed to the ‘investor friendly governance structure’. For instance, the biannual ‘Vibrant Gujarat Global Investors Summit’ is often highlighted as an example of the state’s proactive role in promoting investment. However its success seems to be waning in recent years. Out of the total MOU’s signed under these successive summits, the share of projects implemented and under implementation have continuously declined from about 73 % in 2003 to 13% in 2011. Moreover, the state’s share in investment intentions in terms of IEMs ( Industrial Entrepreneur Memorandum), letters of intent (LOIs )and Direct Investment Licences (DILs) has declined from early 20’s in percentage in  2005 to less than 10 % in 2011.  A slowdown in overall investment climate, saturation of best investment opportunities and a more realistic assessment of the ‘efficiency’ of the state administration – are all posited by Sood as the possible explanations behind this decline in both investment and output growth in the most recent years. So the sustainability of even the much vaunted higher growth rates and investment flows has increasingly become suspect. To put it another way: the investors are also suspicious of the sustainability of returns.

Whose developmental vision is it anyway?

Far more damning is what the book reveals about the growth story itself.  It shows how the state renounces any responsibility of ensuring growth with equity when it relies entirely on the play of the market forces and on private investors to meet its development needs. As Sood points out, In Gujarat this has entailed that the investor is no longer just the source for resources but the one who determines the priorities of  development and this has had serious consequences for the sustainability and distributive justice of the entire growth process. The path of growth, its trajectory, is not defined by the state, or any planning body of economists; it is decided by investors, financial institutions, and corporate firms. The book shows how the economy of Gujrat has been given over to the corporates. They invest in it and they also sing all the praises of the development model.                                  

37% of the total investment in Gujarat in the last two and a half decades has been in infrastructure development. The state’s infrastructure development strategy involves two basic components: 1)promoting private intergrated investment to develop ports, rail, road and power sectors and 2) developing large enclaves for industrial and service sector growth as ‘greenfield sites’ with world class infrastructure.  In all cases this is sought to be done through massive concessions, rebates, subsidies and even direct handing over of financial control over revenues to attract the private sector.  These include initiatives like the Investor Support Systems (ISS), the Public Private partnership (PPP) model, establishment of Special Economic Zones (SEZs) and Special Investment Regions (SIRs) to create ‘world class infrastructure’  and several mega projects (units with minimal investment of 1000 crores in core industrial sectors and 5000 crores in infrastructure projects). The 2009 industrial policy of the Gujarat state locates these initiatives within a larger central government framework to create Delhi-Mumbai Industrial Corridor (DMIC), utilizing its coastal proximity and geographical location within this project.  The DMIC plan itself is full of references to setting up industrial areas and infrastructure in Greenfield sites at Dhar, Pune, Alwar, Surat, Rewari and Muzzafarnagar and is integral to Gujarat’s own infrastructure and development strategy.

So what’s the big problem over here? – the same as with all such green field projects which instead of strengthening infrastructure where it is needed , prefer to establish development  enclaves  neglecting existing human habitations, with serious implications for equity and huge environmental and human costs. For instance, the DMIC plan on groundwater indicates that Gujarat would have to allocate water for industrial uses by diverting water away from irrigation and domestic purposes. Further, the plan envisages migration figures of 94 million workers by 2039. But nowhere in its sweeping grandeur does the plan state how the consequent multiplication of urban demand for scarce water and other resources would be met, how would the water be distributed and who would pay the price ? But the answers are not difficult to guess.

In implementing this development strategy Gujarat has sought private investment across the board. Key sectors – traditionally held to be the preserve of the state – such as ports, roads, rail and power have been handed over to corporate capital. This has meant, inevitably, that the government has abdicated all decision making powers, as well as functional and financial control over such projects. Nowhere else in the country has this abdication of responsibility been so total, nowhere else has the state given over the economy so entirely to the corporates and private investors. For instance, the BOOT (Build Own Operate Transfer) policy initiative for port development involves royalty holidays instead of revenue sharing, permission to investors to adjust royalty against capital costs, freedom to developers to collect charges and tolls, land acquisition for private investors, 30 year window to make profits, special arrangements of forward linkages to private consortiums and SIRs and so on. The policy   restricts  the role of government to minimum and allows complete operational and tariff freedom to the investor. Not surprisingly, Gujarat leads the country in terms of private investment flows in projects implemented and underway for port development. Private initiative is similarly promoted in case of development of roads and railways under the PPP mode. Most of the investment in expanding the communication networks has gone into  improving access of new ports, SEZ’s and SIR’s falling in rural areas, with most connectivity gains from the vantage point of human habitations coming from Central funds (under PGSY). Similarly the upgrading of 630 km of rail tracks from narrow gauge to broad gauge has also meant improved rail connectivity to ports.

Again in the case of the power sector, huge concessions in terms of tariff and transfer of operational control to private sector through legislative changes has resulted in substantive private investments in power plants and a 34% increase in overall power generation. But this has been achieved largely through an increase in the capacity of private captive power plants for industrial use. The power tariff structure also favors commercial and industrial use over agriculture when compared with national averages. Thus, as Sood points out:

“Road and rail expansion is less focused on increasing access of human settlements  but more about improving and strengthening access to SEZ’s and minor ports… In addition the private investment in infrastructure is dovetailed and integrated with the industrial corridor, which in itself is suspect in terms of gains it will bring to the local people and its implications for groundwater in water scarce regions… Gujarat seems to have internalized the two falsehoods mentioned earlier, to turn to private sector for addressing infrastructure and second to give preference to ‘Greenfield sites’ rather than address the aggregative challenges of infrastructure inadequacy.”

Of Corporate Agriculture, Landgrabs and Capital Intensive Manufacturing

And rife in this story is the speculation in land fuelled by legislative changes brought about ostensibly to promote infrastructural and agricultural development. Sucharita Sen and Chinmoyee Malik’s chapters map the increasing emphasis on corporatization of agriculture which has made agriculture a highly profitable activity with an average growth two-and-a-half times faster than the national average. Improved market access, technological dissemination, infrastructure development and a filip from the growth in other areas, have all contributed to this growth. However its distributive effects largely depend on land ownership and land use patterns and small farmer participation in high growth crops.  It also comes with crop specific and area specific challenges thrown in by a growth driven by privatization and liberalization of agricultural procurement, pricing and marketisation policies. There has been a shift in cropping patterns away from food to non-food and high value crops in terms of acreage, output and value. Data on land allocation and farmer participation reveals that cotton cultivation and high value crops have benefited large farmers disproportionately. If we look at farmer groups by land size, in Gujrat, the number of households of the smallest farmer group has increased, but not the acreage they control, while the largest farmer groups have gained in acreage, indicating worsening inequalities. This is contrary to the trend at the all-India level. The position of STs and SCs has also deteriorated overall except in case of SCs in the highest income size class leading to a rise in intra-caste inequalities within the latter. While incidence of landlessness has reduced overall (though starting from a much higher initial base as compared to national averages), it has increased in tribal areas ( in particular in Panchmalal, Dahod and Dang regions ). These also happen to be the most underdeveloped regions in the state lying largely outside the loop of the recent agricultural growth.

These changes could be indicative of worse times ahead given the recent modifications and amendments in land legislation. The rise in overall profitability of agriculture comes with a shift in land policy from ideas of ‘ Land to the tiller’ (a legacy of the post-independence era uptil the days of the KHAM alliance) to those of ‘land de-regulation and liberalization’ over the past two decades. As has been widely documented, even the earlier phase of land reform policies (land ceilings, surplus distribution etc) had come in Gujarat with measures like a complete ban on tenancy which led to the middle peasantry benefitting at the cost of lower peasantry and dalit farmers. Progressive measures over time, such as the Jinabhai Darji Commision suggestions through a KHAM alliance initiative in the early 1980s, never took off in the state. Now, with rapid upward mobility of the same peasantry in this story of privatization and liberalisation, the stakes in land have risen and legislative changes relating to land use which began under BJP-Janata alliance reflect the changing power dynamics and new ground realities (this includes the lifting of the 8-kms ban on land purchase and allowing non-local, non-farming groups to enter the rural land market). These have been brought in under the pressure of the rich farmer/agro-industrialist lobbies – who wanted speculative gains from land markets in the Narmada Valley Projects’ proposed command area – and the demands of builder lobbies for land for non-agricultural purposes. The policy shifts were consolidated and further strengthened under Modi’s regime by 2005. Legislative measures under his regime also facilitated the transfer of village commons and wastelands for private use, displacing marginalized communities who lost their de facto and de jure rights over pastoral lands. As sociologist M. Levein points out, the idea of Greenfield sites combined with the privatization of land within the SEZs, has together been responsible everywhere for ‘a thinly guised land grab for urbanization by the private sector’. Nowhere has this been more manifest than in the case of Gujarat.

If we turn to the experience of industrialization we have another story of skewed development. As the chapter by Sangeeta Ghosh brings out, manufacturing also witnessed high growth rates in Gujarat. In recent decades, the share of manufacturing within the Gross State Domestic Product (GSDP), has been higher in Gujarat when compared to national averages as well as other high performing states. Yet at the same time, if we look at employment, the picture is the reverse. In Gujarat the share of the manufacturing sector within total employment is below the national average and has been declining rapidly overtime. Growth has been highly capital intensive in nature and concentrated in some sectors, incomes and regions. It favours the more developed regions and has weak backward and forward linkages between the unorganized and the organized sectors. There has been a shift away from the employment generating textile sector to refined petroleum, petrochemicals, chemical, metal and fabricated products marked by very high capital intensities.  This shrinks opportunities for ancillarization and sub-contracting and has also raised serious concerns about its environmental impact. Significantly, this growth trajectory links well with the infrastructure story in several ways. For instance, the need for proximity of well developed ports helps in the case of petroleum and chemical industries given their high import content, and surplus power generation the state fosters comes in handy for  the highly energy intensive metal related industries.

So the story of corporatization of agriculture and the growth of selective capital intensive manufacturing completes the loop of Gujarat’s recent growth experience. Along with the tale of ports, roads, rail and power, this turns out to be a fable ‘of the private investor, by the private investor and for the private investor’. What about the average citizen then? And where do the workers, the underclass, the poor, the tribals and other minority groups figure in this haven for investors?

On Jobless Growth, Widening Inequalities and Social Exclusion

As it turns out, their story is integral to understanding the missing pieces of this puzzle.  To begin with, the chapter by Ruchika Rani and Kalaiyarasan map the stagnant and socially discriminatory employment conditions that persist in this period of high output growth.  There has been a significant mismatch between sources of income and employment leading to low employment elasticities of output and ‘jobless growth’. Employment growth in manufacturing and services turned negative in the last 5 years. Whatever growth in employment occurred in the last decade was largely in the category of casual- and self-employment indicative of rising informalisation. There were sharp regional differences in employment outcomes with rural Gujarat experiencing negative growth rates in the last five years.  Employment was also unevenly spread across social groups and minorities. Upper caste hindus and a small proportion of SCs had a proportionately large share in regular employment within manufacturing and services, with most of the rise for SCs in services being in casual employment. Meanwhile OBC’s, Muslims , other minorities experienced a shift towards traditional sectors when growth was located in modern capitalist structure, indicating a stagnation and even a worsening of their employment conditions. The share of STs in Industrial employment had risen in the earlier decade, but it declined rapidly in the last five years. This decline was absorbed by the agricultural sector at a time when growth was shifting to the Industrial sector, indicating possibly ‘distress migration’ to agriculture.

Where measures of income, poverty and inequality are concerned, despite its spectacular growth, Gujarat’s performance has been average as compared to national averages and it lags behind competing states like Tamilnadu, Maharashtra and Haryana on different counts. Certain features stand out in the chapter by Nidhi Mittal who maps the changes in average per capita consumption expenditure, and calculates the Gini coefficient and headcount ratios for Gujarat. First, the earlier decade 1993 to 2004-05 compared better than the last five years of the decade ending 2010, and these were the years when Narendra Modi’s  ‘growth and development’ agenda was unleashed fully. Second, urban inequality has risen much more at a time when most of the rise in growth rates and per capita expenditure is located in urban areas.  This implies opposing trends in terms of rise in consumption levels and rise in inequalities of income in areas of high growth, questioning the dynamics of the recent growth process itself.

This assumes further significance given the increasing gap in average consumption levels between Hindus and Muslims over 2005-10 in urban areas. Also while urban poverty levels for Muslims stagnated, those for Hindus declined by around 4 percentage points. Again, while per capita expenditure grew by 2.5 % p.a in the last five years, the increase for STs was a mere 0.14%, with an exponential widening of gap in growth rates of per capita income levels between STs and the rest. In urban areas poverty has increased for both SCs and STs while rural poverty has declined.  However the extent of poverty for STs in rural areas is still two-and-a-half times higher as compared to others . While overall poverty for SCs as a group has declined and they seemed to have gained more than STs, intra group inequalities within SCs have again risen substantially.

Privatising Health and Education the Gujarat Way

Change in the quality of life is always indicative of the nature of economic development. Nowhere is this reflected more clearly than in the case of improvements in health and education, as brought out in the chapters by Sourindra Ghosh and Sandeep Sharma. As Sood points out , these estimates are significant in their ability to  capture the influence of a wide array of factors such as quality of food and water, the quality of housing and clothing, ability to earn livelihoods, household decision making, social and health outcomes in any population group. Not surprisingly, in keeping with the larger development vision, the roots of Gujarat’s experience lie in an unswerving faith on the private sector even in these areas where today even ardent advocates of free markets would tread with care.  Accordingly, the share of expenditure in development, health and education in total NSDP has been falling continuously over the past decades. This is also reflected in lower access to and utilization of government services and a move towards private service providers with rising per capita health and education expenditures.

In terms of aggregate health parameters – such as Infant Mortality Rates (IMRs), male and female life expectancy, vaccination and antenatal care –  Gujarat has experienced very average performances vis-a-vis national estimates. In most cases it compares unfavorably with other high growth states such as Tamilnadu, Haryana, Maharashtra over the past decade despite leading them in terms of growth in per capita GDP. What is worrying is that it lags behind even national averages in IMRs and under-five mortality, as well as in the mortality rates for women and people in rural areas. This obviously affects poorer sections disproportionately and social disparity in health has had a more regressive impact on health indicators for the marginalized, in particular the STs.

Again where education is concerned, average figures do not tell the full story. The figures for average literacy levels in Gujarat are higher than the national average.  But its ranking in terms of literacy levels has deteriorated between 1999-00 and 20007-08, and fewer children in the age group of  6-14 attend school in Gujarat than the numbers suggested by the national average.  For the same age groups – i.e  for above primary and secondary school education –  the access of women, SCs, STs, Muslims and other minorities is again lower than the national averages, and markedly behind those of comparable states. While Gujarat has experienced higher rates of decline in share of state expenditure on education than national averages, the proportion of people dependent on government aided and government and local bodies run institutions is higher or the same, much more so in rural areas, indicating that the far costlier private-sector-run institutions were unable to substitute the educational needs of people at large. This brings out a clear mismatch in government’s policy to rely on and encourage unaided private sector in education and the people’s capacity to afford the same.

Economics of Growth and the Political Culture of authoritarianism

So what does the Gujarat Model have to offer to the people of Gujarat and the country at large ? To begin with, Gujarat’s success story is crucially linked to its history, its people’s entrepreneurial skills, its farmers, its globally recognized and gifted artisans and the legacy of a social reform and cooperative movement which wove together many of these strengths within its social fabric. This history along with a favorable geographical location provided a strong base for the recent growth experience in terms of human capital, social infrastructure and natural advantages. On its own terms, it remains questionable if even this limited success achieved could be replicated or extended as a ‘growth model’, and whether the policy assumption ‘one size fits all’ can offer solutions to problems of the rest of India, with its regional specificities, and the diversity of the historical growth trajectories which exist elsewhere. This is something Modi’s urban middle-class following seems blissfully unaware of in its mooting for the ‘new messiah’ of development on the horizon.  Especially at a time when even the future trajectory of this story itself is in serious doubt, given that most recent estimates suggest a petering out of existing growth rates and the setting in of an investment inertia.

More significantly, as Sood points out, even this limited success story is questionable in terms of its desirability for Gujarat’s own development trajectory. The painstaking analysis in the book reveals how the regime of governance unleashed in the last decade has at its heart an unabashed dependence on the private sector, and state support and policies prioritizing growth in infrastructure and investment aimed at strengthening the requirements and profitability of the private investor. The developmental model has meant neglect of human habitations and needs of ordinary citizens in improving access through rail, ports, road for Industry, SIRs, SEZ’s; promotion of selective and capital intensive manufacturing  growth; jobless growth and falling share of wages in total income; corporatization of agriculture, neglect of small farmer and privatization of village commons; legislative changes in land-use norms reinforcing speculation in land; neglect of public policy and expenditure and a misplaced dependence on private initiative to even address inadequacies in social infrastructure. All of which is manifest in deeply exclusionary social and economic outcomes as reflected in extensive environmental degradation, widening regional disparities, neglect of the rural sector and increased marginalization of workers, women, STs, Muslims and minorities in social and economic outcomes within the state. The book then offers us a damning indictment of this path to development.

As Atul Sood concludes, the roots of these uneven outcomes lie in the ‘ neoliberal framework’ within which  this  development  trajectory itself is located, which ‘inherently negates the possibility of a level playing field.’    However, while the social and economic manifestations brought out in this study are the classic hallmarks of the ‘market led’ path to development , they have been renewed in the last decade in Gujarat with a zeal stamped all over by Narendra Modi’s authoritarian style of governance itself. In crucial ways it  represents a fundamental shift away from Gujarat’s own history of Gandhian humanism, liberal welfare programmes and democratic social engineering of the KHAM ( an experimental alliance between Kshatriyas, Harijans, Adivasis and Muslims in the 1980s) days.

It might be illustrative to conclude with a reference to the mention of industrial unrest in Sood’s introduction over here. Where workers are concerned, the state witnessed not merely jobless growth but also the lowest share of wage income in total income, one of the highest use of contract workers in organized manufacturing and rising trends of casualisation of workforce.  Not surprisingly, Gujarat topped the list as the  ‘worst state’ for labour unrest in the Economic Survey 2011, witnessing the maximum incidences of strikes, lockouts and other forms of unrest on various financial and disciplinary grounds (wage and allowances, bonus, personnel, discipline and violence) at a time when these were actually declining in the rest of the country. At the same time, investors and industrialists from  all over, be it Maruti or Tata, are vying with each other to shift their production  plants and activities to designated sites within Gujarat. Under such circumstances, an investment boom and Industry’s soaring confidence in Modi government’s ability to control any undue disturbance by establishing the ‘rule of law’ is indicative of the crucial link between the ‘Gujarat Development Model’ and, what some might see, as the totalitarian roots of Modi’s governance regime.

Parita Mukta has traced the genesis of this rule of law in Gujarat right from the times of resistance to development projects like Narmada Valley Project. She brings out how this acquired a distinct flavour with the invocation of the river goddess to reinforce the visions of grandeur and prosperity for the rich farmers and industrialists of the state in the preachings of RSS idealogues (“Worshipping Inequalities-Pro-Narmada Dam Movement” Economic and Political Weekly October 13, 1990)

During Narendra Modi’s regime, it has all come together as never before in a self fulfilling prophecy of an effective, pro- corporate, investor-friendly governance build on consolidating a ‘political culture of authoritarianism’, a ‘brash pride to demonstrate, brute force’, and a belief in  ‘worshipping inequalities’. This package is marketed to us via powerful media and advertising giants like APCO worldwide which counts dictators and global Investment firms as its clients. See for example Aditya Nigam on Spin Doctors and the Modi Make-over, and Binoy Prabhakar on how an American Lobbying Company markets Modi.

Gujarat’s development experience thus suggests the deep authoritarianism that made specific aspects of the recent growth experience possible is not so delinked from its fascist manifestations in spectacular forms of violence against religious minorities, scheduled castes and tribes and lower castes that the state has witnessed in its recent past.

Shipra Nigam is a Consultant Economist with Research and Information Systems (RIS) for Developing Countries

#India- Inequality matters #poverty,what statistics say


 Radhicka Kapoor
 
Posted online: Tuesday, Mar 05, 2013 , FE
Given the average GDP growth of 8.5% during FY05 to FY10, the Eleventh Plan target of reducing poverty by 2 percentage points a year was disappointing
That poverty in India has declined between 2004-05 and 2009-10 is indisputable. Poverty estimates based on the Tendulkar poverty line released last year indicated that poverty headcount ratio declined by 8%, 4.8% and 5.7% in rural, urban and all-India, respectively, during this period. This worked out to an annual decline of 1.64% and 0.92% in rural and urban India, respectively. Given that the average growth rate of GDP during this period was about 8.5%, exceeding 9% in three of the five years, and that the Eleventh Plan aimed to reduce poverty by 2 percentage points a year, this pace of poverty reduction is indeed disappointing. If economic growth was the only factor that mattered for poverty reduction, we should have witnessed greater poverty reduction. Moreover, states with the highest growth rate should have performed the best in terms of poverty reduction. But state-wise poverty estimates indicate that this is not the case. For instance, Bihar and Chhattisgarh witnessed average growth rates of about 10% during this period, yet poverty declined by less than 1%.
While growth is unquestionably necessary for substantial poverty reduction, it appears that growth is getting weakly linked with poverty reduction. In other words, the growth elasticity of poverty (GEP) is not high enough. GEP gives the percentage change in a chosen poverty measure in response to a 1 percentage change in GDP or mean income and can be interpreted as the poverty reducing impact of growth. In the poverty literature, GEP is found to be a function of initial income distribution, and it has been shown that rising levels of inequality lower GEP. The rationale for this is that the higher the initial inequality, the lesser the poor will share in the gains from growth. Martin Ravallion explains this succinctly as: “Unless there is a sufficient change in the distribution, people who have a larger initial share of the pie will tend to gain a larger share in the pie’s expansion”.
The National Sample Survey (NSS) data point in the direction of rising inequality in India. The Gini coefficient for rural India increased from 0.27 to 0.28 between 2004-05 and 2009-10, with rural inequality rising in 11 states. The Gini coefficient for urban India increased from 0.35 to 0.37, with urban inequality increasing in 18 states. Moreover, the ratio of per capita income between the top 15% and bottom 15% of the population has risen from 3.9 to 5.8 in rural areas and from 6.4 to 7.8 in urban areas during this period. This indicates that not only is inequality between the two groups on the rise, but also that the benefits of economic growth have not trickled down to those at the bottom of the distribution. Importantly, this rising inequality has reduced GEP.
Moreover, these inequality measures need to be interpreted with caution as India measures inequality based on consumption rather than incomes, and consumption inequality tends to be lower than income inequality because of consumption smoothing by households. Also, the NSS estimates of consumption expenditure fail to capture the top income groups, thereby resulting in underestimation of inequality. Therefore, inequality in India is higher than what we believe by looking at these estimates.
Importantly, inequality of consumption is about ‘inequality of results’ and not ‘inequality of opportunities’, which may be more important but are much harder to measure. Such inequalities are associated with gender or caste, access to key social services, particularly healthcare and schooling and access to credit markets; and these tend to undermine productivity, retard growth and consequently impede the task of poverty reduction. To achieve a higher rate of poverty reduction and make the growth process more inclusive, India will need to address these inequalities in opportunities that impede poor people from participating in the growth process. This will require increased spending on education and health, and creation of quality jobs and social safety nets for the poor and vulnerable. Conditional cash transfers (CCTs), which reinforce focus on schooling and health, if designed and targeted appropriately, can also go a long way in addressing such inequalities of opportunity. Allowing children to move faster and higher up the education ladder than previous generations will enable them to enjoy better prospects in the workforce than their parents. Research at the International Poverty Centre has found that CCT programmes such as Bolsa Familia and Oportunidades were responsible for about 21% of the fall in the Brazilian and Mexican Gini coefficient, each of which fell by approximately 2.7 points between mid-1990s and 2000s.
Over the last few decades, India has lifted people out of poverty at an unprecedented rate, but the pace of poverty reduction is being seriously challenged by rising inequality, which hurts GEP.
This makes a strong case for prioritising distribution and making income distribution more equal before embarking on a high growth path. Moreover, increasing inequality could undermine the basis of growth itself by reducing social cohesion and undermining the quality of governance by increasing pressure for inefficient populist policies. That myopic political responses to growing inequality to assuage voters can have disastrous consequences for the economy is well explained in Raghuram Rajan’s book, Fault Lines: How Hidden Fractures Still Threaten the World Economy. It was to address the rising income inequality in the US that credit, in particular housing credit, was pushed on low income households fuelling the crisis. It is therefore imperative that in the quest for higher economic growth we do not ignore the perils of rising inequality, one of the most pressing problems we are likely to face in the coming decade.
The author is an economist with a keen interest in the field of poverty and inequality in developing countries

 

The myths in power generation


E. A. S. Sarma

Power problems are attributed to shortage in generation capacity, not inefficiencies in the supply chain.

From thermal power generation to end-use appliances, energy inefficiency can be reduced. — Raju V

From thermal power generation to end-use appliances, energy inefficiency can be reduced. — Raju V
Distance Energy Courses – Apply, Study & Get Certified Online 1yr PG Diploma & Certificate Course
www.MITSDE.com/DECRecognisedCourse

 

It is a myth that increase in per capita energy consumption measures “development”. The Integrated Energy Policy (IEP) report of the Planning Commission projects the energy needs of the country on the premise that GDP growth and the increase in energy needs are closely correlated.

IPE uses “elasticity coefficients” to estimate future energy needs. Is it a reliable basis?

In his path-breaking book Soft Energy Paths-Towards a durable peace, Amory B. Lovins (1977) provided the following insights into the way the per capita primary energy consumption levels in Denmark varied over the last five centuries.

Denmark’s per capita primary energy use evidently declined between 1500 and 1900, not because of any negative economic growth but on account of the combined effect of a shift in the fuel base and the improvements in efficiency.

The increase in the per capita primary energy use between 1900 and 1975 and the decline between 1975 and 2004 were the compound outcomes of the growth in Denmark’s GDP, the fuel shifts and the efficiency improvements.

These trends show that the per capita energy use is not necessarily linked exclusively to the rate of increase of GDP.

What matters in terms of the quality of life is the per capita useful energy use, not per capita gross energy use, as the latter hides the inefficiencies down the supply chain of electricity from the generation station to the end-use appliance.

THERMAL-HYDEL MISMATCH

The other myth is that “electricity development” is synonymous with “setting up new generation projects”. The end product of electricity is different in different sectors. It is luminosity in lighting, lifting water in irrigation, turning the wheel in industry, circulation of wind in fans and space cooling in air-conditioning. The energy required for this can come from a new MW based on a renewable or a non-renewable resource or from a saved MW through efficiency improvement.

In other words, setting up a new generation project is one among the several alternatives available and it may not be the most optimal from the point of view of cost and long-term sustainability.

If the unit cost is high, the poor cannot access electricity. If the resource is non-renewable, energy security is threatened. The challenge, therefore, lies in choosing the alternative that ensures an affordable cost and long-term sustainability.

Our electricity system is based primarily on large projects generating electricity that is conveyed over long distances to remotely located consumers through an extensive system of transmission and distribution (T&D) network. The investment we have made in T&D has not kept pace with the investment in generation.

As a result, more than one-third of the generated electricity is lost in T&D and the electricity finally supplied to the consumer is of poor quality.

Within the generation sector itself, the investment we have made in peak-load hydro generation has not kept pace with the investment we have made in base-load thermal projects, causing an unhealthy imbalance.

EXPENSIVE POWER

It is an expensive way to provide electricity to the consumers whose cumulative demand has diurnal and seasonal variation. Thermal generation (coal, combined-cycle gas, nuclear) can best cater to the steady component of the demand, whereas the peaking stations (largely storage hydro) can optimally meet the peak load.

As a result of the imbalance in thermal-hydro mix, the thermal capacity, though available, is not utilised fully and the shortfall in peaking capacity has resulted in peak-time shortages that have crippled the economy.

These distortions have imposed a heavy cost burden on the consumer who is not only forced to pay for the high T&D losses but also forced to invest on voltage stabilisers and inverters.

The high cost barrier has stood in the way of electricity reaching the poor. No wonder that it is usually the existing affluent consumers who use highly inefficient electric appliances and grab most of the additional electricity generated in the country. Meanwhile, the poor seem to remain where they are!

Between 2001 and 2011, the country added 85,000 MW of new capacity. The number of rural households who had no access to electricity in 2001 was 7.5 crore. In 2011, it was 7.8 crore! Similarly, in 2001, the number of urban households who had no access to electricity was 0.6 crore. It increased to 0.7 crore in 2011!

DISPLACEMENT EFFECTS

We have a spacious building constructed recently in Visakhapatnam, standing majestically in the salubrious environment of the beach. It is sealed on all sides with heavily tinted glass, letting in neither natural light nor fresh wind. It uses hundreds of inefficient electric lamps to illuminate within and a large number of heavy duty ACs to cool the space. It is a veritable energy guzzler.

If we mine coal with 100 units of heat value to start with, at the end of the supply chain that feeds into an incandescent lamp, the luminosity we get is equivalent to 0.39 units of the original heat energy. The rest, i.e. 91.61 per cent of the original heat energy of coal, is wasted. If we can double the efficiency of the lamp, we can do with coal of 50 units of heat value and reduce displacement of people by 50 per cent!

The corresponding savings in the generation capacity would have avoided the displacement of people at the site of the generation project by 50 per cent. Going one step farther, if we replace the conventional lamp by a solar PV-based LED, we can avoid coal mining altogether and do away with displacement of people at both the coal mine and the thermal power project.

Prayas, in its Discussion Paper on Thermal Power plants on the Anvil – Implications and need for rationalisation, pointed out in August, 2011, that 7,01,802 MW of coal and gas power plants had either been cleared or about to be cleared by the Ministry of Environment & Forests (MOEF) and they were most likely to be set up during the next few years!

This worked out to thrice the capacity addition required to meet the needs of the high-renewable, high-efficiency scenario for the year 2032 projected by the Planning Commission’s Integrated Energy Policy (IEP) study.

This will pre-empt all efforts to remove the existing imbalance in the thermal-hydro mix and compound the problems of both peak-time shortages and the high cost of electricity.

Prayas’ study further reveals that these capacity additions are largely concentrated in areas that are already categorised as “critically polluted industrial clusters” by the Central Pollution Control Board (CPCB).

Plants of 30,470 MW and 24,380 MW capacity will come up in two districts of Chattisgarh, namely, Janjgir-Champa and Raigarh respectively, followed by 22,700 MW within 10 km of Krishnapatnam Port in Nellore district in AP.

In the districts of Rewa, Sonbhadra, Sidhi and Allahabad on MP-UP border, plants of 51,218 MW will come up in close proximity!

The capacity additions proposed include projects that are located in precious wetlands, irrigated tracts and fragile regions rich in biodiversity. The social costs imposed by such projects far exceed the social benefits.

(The author is former Union Power Secretary.)

Excerpts from the recent Girish Sant Memorial Lecture, organised by Prayas, Pune.

(This article was published on February 24, 2013)

 

Evidence, Consensus and Policy: curious case of changes proposed in India’s public health policy


English: National Rural Health Mission of India

English: National Rural Health Mission of India (Photo credit: Wikipedia)

SEPTEMBER 27, 2012

Guest post by KAVERI GILL, at  kafila.org

The world of development is as prone to fashions as any other. In recent times, ‘evidence-based policy’ has become the new gold standard, following hot on the heels of participation and ownership of policy processes and outcomes by academics, activists and civil society groups. This applies within nation states, especially of the global South. India today epitomises such objective and bottom-up democratic largesse in favour of the ‘aam admi’- for largesse it is, make no mistake – with a near constant refrain of the avowed aim of ‘inclusive growth’. And yet, does it really?

Or is politically correct discourse and seemingly open decision-making processes in the social sector sphere merely dangerous fig leaves for seismic and opaque shifts in policy, which have very little to do with evidence and even less to do with broad-based consensus? Rather, they are an outcome of fixed ex-ante views – which may be termed as a distinct partiality to the Chicago School of Economics – about the path to a fictitious endpoint of a mainstream development paradigm, which itself is faith-based. It is not justified by theory or a heterodox reading of the empirical experiences of presently developed countries, let alone latecomer developing nations which are, for various exogenous and endogenous reasons, likely to have different trajectories altogether. I refer here to the hackneyed line about faster growth being pursued as a necessary, if not sufficient, condition for eventual trickle down, no matter that the ‘dur khaima’ of an equitable society is never arrived at!

In his address to the nation last Friday, the Hon. Prime Minister mentioned ‘the common man’ twice in the opening lines, as a straw man in whose name and interests all ‘difficult’ second-stage reforms are being undertaken. On p.1 of the Planning Commission of India’s Approach Paper to the XIIth Plan [1], it is argued that high growth during the XIth Plan was seen as instrumental to achieving two ends: to create income and employment opportunities for better living standards for the majority, and to generate resources in order to finance social sector programmes, aimed at “enabling inclusiveness”. It goes on to define the latter: “…inclusiveness is a multidimensional concept. Inclusive growth should result in lower incidence of poverty, broad-based and significant improvement in health outcomes…” (ibid., p.2). A wish list of the Left liberal’s ideal social contract follows, in the Rawlsian sense of justice, and quite far from Nozick’s Libertarian minimal nightwatchmen role of the state. The discourse could not be better.

But let us unpack the ‘inclusive growth’ jargon – with particular reference to public health care – as an illustrative exercise of evidence, and its selective and biased use to derive unwarranted policy prescriptions in the social sector sphere in recent times. Quickly, to recap a refresher undergraduate course in economics, health care is not a routine commodity, rather more of a public good [2], exhibiting externalities and marked information asymmetries of moral hazard and adverse selection. In layman’s terms, because of these and other characteristics, the state remains heavily involved in this sector even in advanced countries, through public financing, and provision or regulation or both, for the market is bound to fail. When returns to large investments accrue over the time horizon of many generations – and admittedly many governments – then it is only a progressive state that has the gumption to invest in such sectors.

Judging by its expansive discourse and promises, one could be forgiven for thinking this is precisely what the present government in India means to do. For structurally, the ‘demographic dividend’ advantage of a relatively young population, that it  also constantly waxes eloquent about, can only be realised if we have achieved decent health (and education) outcomes for the majority. It is the briefest window of time which, given the present dire state of malnutrition amongst children, and the fact that India is far from attaining any of the numerous health-related goals of the MDGs [3], lead many to suggest it is closed off already. Even discounting this view as needlessly grim, the Approach Paper to the XIIth plan itself concedes that health outcome indicators, such as infant mortality rates and maternal mortality rates, are weaker than they should be at this level of development (cf. Footnote 1).  So what does it propose to actually do, in its Health Chapter of the Approach Paper to the XIIth Plan [4]?

India has averaged 8% p.a. GDP growth rates over the XIth Plan period. And yet, its public spending on (core) health – combined Centre and State, plan and non-plan– has hovered around an abysmal 1-1.2% of GDP [5], one of the lowest in the world [6]. Where the XIth Plan still ostensibly aimed to increase this (core) amount to 2-3% by the end of plan period, the Approach Paper to the XIIth Plan settles for an avowed increase to only 1.58% by the end of the plan period. Why should this be the case, given that higher growth rates for the country are justified time and again as being necessary for fiscal room to spend more on social sector programmes?

And how is this possible, given the government has recently vocalised a desire to move towards universal health care for all, in which connection the Planning Commission of India constituted a High Level Expert Group (HLEG) of respected academics and practitioners, to deliberate and come up with the best way forward [7]. The logistical ‘how’ is threefold in the Health Chapter (August draft).

First, the Centre expects individual States to contribute increasingly to the funding of public health, which over the XIth Plan was roughly in the ratio of 1:2. The previous sharing formula for Centrally Sponsored Schemes, such as the National Rural Health Mission (NRHM), was largely in the form of a self-regulated MOU, which States progressively lived up to over the course of a plan period, depending on their fiscal capacities and levels of development. Such contributions would now be mandatory, in that a large part of the Central funding is conditional on higher investments by States.

The proposed new formula to determine the quantum of the flexible ‘incentive fund’ to each State still takes into account its health lag versus that of the national average. In so doing, it gives some weight to its developmental and poverty levels. But linking this amount to its own contribution, and to “agreed parameters of performance and reform in previous year’s sector wide MOU with the MoHFW” (p. 32, Health Chapter (August draft)) – whatever the latter refers to – penalises the worse off States, which are most likely to be cash-strapped and  have less room for manoeuvre for additional fiscal spend. In a federal system, States are in any case reluctant to own Centrally Sponsored Schemes, such as NRHM, because they are conceived of elsewhere and the political credit for them accrues to the government in power at the Centre.

In recognition of externality and equity issues in the provision of basic health care services at the national level, HLEG recommends “a substantial proportion of financing of these services can and should come from the Central government, even though such services have to be provided at sub-national levels” (p.11, HLEG 2011). Yes, States should not use Central contributions as a substitute for their own spending, as many have done so in the recent past, rather to complement it. But this peculiar form of forced ‘incentivisation’ coming out of a misplaced desire to straighten negotiation between Centres and States on the distribution of funding is likely to result in a poverty trap for poorer and less well governed States, and their hapless populations.

More confounding, given the evidence, is the proposal to follow the ‘managed-care’ model of health care provision, the beacon for it being the USA model. The latter is universally derided for being highly inequitable in provision, extremely expensive, and leading to relatively poor health outcomes, compared to other advanced countries. This despite the fact that the private sector is regulated to a far higher degree in that country and patients have recourse to expensive law suits in case of transgressions in delivery by them. What this model would mean in India is that large corporate networks would compete with public health institutions for public funds, to deliver packages of services (most outpatient care and hospital services) at cost to patients. If they cannot compete, as hitherto poorly funded and supported public sector health institutions are unlikely to be able to do so, they do not survive the Darwinian game. The public sector’s role in delivery of health care will be restricted to a minimal essential package, made up of basic child and reproductive care, as well as prevention and promotion roles. In short, the spectre of the private sector is to be unleashed on the public health delivery system.

Strong critiques of the proposed structural ‘privatisation by stealth’, including indisputable international evidence to show how such managed care models work over time to reduce choice in the range of (free) services on offer, and quality of care, have emerged from committed researchers and practitioners working in the public health sphere, so I will not repeat what they have said far better [8]. Indeed, the Health Chapter (August draft) itself admits the following: “…the system creates strong incentives for whoever is managing the network to minimise total cost… there is limited patient choice, and as such the quality of medical care provided has to be carefully regulated” (p.29, ibid.). I would like to focus instead, in conjecturing what could be the objective intellectual motivations for such a shift in policy, and in so doing, make some observations about public sector performance, quality, regulation and finally, rights and justice, in the Indian social sector context, and health care sphere in particular.

Is the shift driven by an argument about poor public sector performance in delivery in health care? If a researcher is objective and without ideological bias, they cannot deny that it has been lacking, which reflects in the dismal health outcomes in the country (noted previously), as well as the flight of those who can and who cannot afford it from the public delivery systems in health (and education). At 67%, the proportion or private out-of-pocket spending on health is sky high, and research has established that health expenses is one of the primary reasons for pushing households below the poverty line. But how can we best read this voting with one’s feet – or in this case – wallet?

Cross-country data on health expenditures show that a higher level of government spending on health is frequently associated with lower levels of reliance of a country’s health system on private out-of-pocket expenditures [9]. So if the quest is eliciting better performance, isn’t the answer to strengthen the public health care system after decades of below-minimal (forget-optimal) spending by the government on this sector? To completely emasculate and demolish it, on the logic that the private sector will force it to perform better or die out, reeks of rather strong ideological proclivities (of the Chicago School of Economics variety).

Is the idea that frontline providers in the public health care system, be they doctors or paramedical staff, are completely unaccountable and therefore, need the stick of private sector discipline to get in line? Again, any open-minded researcher and practitioner would be foolish to dispute widespread doctor absenteeism in public health care centres, especially in rural India, the system’s de facto privatisation through corrupt medical functionaries diverting patients to their ‘private clinics’ in the same compound, charging a fee for consultation and medicines etc. Indeed, I myself found that to be the case in 2008-09, when working on an evaluation of NRHM, as an independent researcher for the Planning Commission of India [10])!

But in the public health system’s defense, what do we expect from a huge cadre of contract and not regular employees, such as are currently employed in NRHM.  I refer here to doctors and paramedics, not even the accredited social health activists (ASHAs), itself a large cadre of underpaid and overworked ‘voluntary’ women workers, on whom the system exploitatively and cheaply depends [11]. The next question to ask is whether private sector employees would be more accountable? Specialist and super-specialist services in public health centres in rural Bihar are already contracted out to the private sector, and their employees behave as badly, if not worse, than their public sector counterparts. We come to the vexed question of asymmetrical geographical power and monetary incentives in a fully corporatised medical sector, because of course highly well-paid doctors in urban centres have to perform, in terms of showing up and working long hours, to the tune of profit-maximising payroll masters (and broke patients!)

If the idea behind this shift in policy really is to guarantee good performance and high quality in public delivery, a far better idea is to tie powerful people to the public health system in the country, and ensure they have a stake in its doing well, as we have all read and absorbed Hirschman’s classic 1970 treatise on ‘Exit, Voice and Loyalty’. A good beginning would be to somehow link CGHS benefits for all public sector employees – from the most junior to the most senior, as they are all relatively powerful in their own tiers and domains – to the public health care system alone. It will be remarkable how quickly we see an improvement in performance and quality of provision, were such a move undertaken. Additionally, legislation ought to be passed that the private costs of health care, as well as foreign costs of health care, for government and political functionaries, is not underwritten by the Government of India. This will countervail, to a significant extent, the argument that there is no fiscal room for additional social sector spending in these recessionary times, since the amount saved will add to the ability to do so (cross-subsidisation of sorts, always a decent redistribution tool).

Further, is the government willing and able to rein in and regulate the private sector in general? For as the Health Chapter (August draft) itself acknowledges, any kind of privatisation in the provision of health care, such as the managed-care model, has to be carefully and heavily regulated by the government. So far, it is unable to stem empanelled doctors and hospitals from gaming the system and performing unnecessary hysterectomies, in rural and small-town India, the costs of which are reclaimed through the Rashtriya Swasthya Bima Yojana insurance scheme (which we will come to shortly). In subaltern India, it will also find it hard to enforce necessary emergency caesareans be performed, in a managed-care model whose financial imperative act to cut free services over time, especially those of a more expensive nature. Moral hazard and adverse selection are going to be rife in this system, as is the complexity of information and understanding needed sidestep them. Such information asymmetry problems are known to be much worse for poorer and illiterate women, and other subordinate groups, so it will be the government’s duty to safeguard their rights if it is the one foisting this market on them.

What about the argument that the public delivery of health care is irrevocably interwoven with large-scale corruption, such as recently publicised about NRHM in Uttar Pradesh, and therefore, what is the harm in trying the private sector alternative? First, this is not universally true across states of India, as anyone with a passing knowledge of Tamil Nadu and other well performing states’ social sector programmes will counteract. Second, a sophisticated understanding of corruption as also including unilateral power to behave with impunity, especially in today’s India, suggest the  private sector will be allowed to get away with ‘corruption’ on an equally, if not larger, scale than the public sector. In Delhi itself, the post-Imperial capital, the government is unwilling or unable to ensure that powerful private hospitals, who have obtained government land on the condition that they admit a certain percentage of patients from economically weaker sections (EWS), actually do so. It is also turning a blind eye to the hidden but increasing private medical trials industry that is mushrooming in the country.

Privatisation of an entire system is not something that can be easily – or at all – rolled back, in our Age of Capitalism. How hard it is to stuff the genie back in the bottle, in the face of greedy corporates and powerful lobby groups, is something the NHS is set to find out soon in the United Kingdom, just as numerous Presidents of the USA did when trying to reform its deeply flawed system, and ironically, as Obama has fought hard to do in recent times. So before this massive step is taken, let us think very carefully as a nation, especially as our levels of development and health achievements are far worse than that of these countries.

Finally, if privatisation and PPPs are something the government needs for faster growth, as signals to attract FDI and keep the stock market bullish, why not fully privatise numerous other sectors, such as large-scale infrastructure, construction, airlines operations etc.? Let these be riven with ‘efficient corruption’, in the Shleifer and Vishny sense, or not, in which case they can keep rooking on cost, quality and timing, with need for repeat delivery at short intervals etc. (it will keep the aggregate demand high, in any event!) Let the opportunity to earn supra-normal profits, via monopolies and even natural monopolies, be with the private sector alone (not even PPPs). For they matter – relatively – little to the social contract of the state, with its citizens, other than cutting the government’s revenues in earnings.  If something has to be ceded from the public sector portfolio in the India of 2012, to keep it on the conveyor belt of growth, let it be these areas. In lieu, ring fence public spending and the public provision of basic needs, such as health care (and education), for not only are these instrumentally important to achieve ‘inclusive growth’, if we really mean to, but they are constitutively important, to ensure the majority of citizens in a democracy have capabilities to lead a flourishing life.

The less said about the third ‘how’ of financing universal health care, via insurance, in the Health Chapter (August Draft), the better. International evidence is overwhelmingly of the view that this is not possible, and numerous early academic and evaluation studies of the Rashtriya Swasthya Bima Yojana (RSBY) insurance scheme show its many flaws. These are acknowledged by the Planning Commission: “They [HLEG] have also noted the problems with reliance on a market oriented, “fee for service model”, based on insurance in which the premium is paid by the government. This creates incentives for unnecessary curative care and a consequent spiraling of costs (p. 29, Health Chapter (August draft)). And still, it proposes to expand it across the entire BPL population of the country, to numerous other unorganised sector worker groups and so on.

If all these suggestions and the associated policy push are not coming from theory or empirical evidence, then where are they coming from? Unless one were party to inner policy formulation deliberations, it is hard to say. The Health Chapter (August draft) places the full onus on the origin of the managed-care model recommendations with the HLEG. The HLEG 2011 does suggest a networked system at the district level, leaving itself wittingly or unwittingly open to such misinterpretation, as activists feared. If news reportage is correct, there is an on-going debate and disagreement between the Ministry of Health and Family Welfare, and the Planning Commission of India, on the proposed changes. As an outsider, it is again hard to keep track of the exact nature of the differences, and how they are being negotiated, day by day. Therefore, the broader political economy ‘how’, of the eventual form of the Health Chapter (August Draft) in the final approved Approach Paper to the XIIth Plan, is still an open-ended one.

As Buchanan and Tullock (1962) famously noted, government and the bureaucracy is not a monolithic, uniform black-box of an actor, and is rather made up of individuals, their idiosyncracies, their failures, their incentives, their propensities to act in certain ways. So we are yet to see where the chips eventually fall on the policy front, as regards proposed changes to the public health care system. But I will appeal to the higher selves of those determining the final version of the Health Chapter, in the Approach Paper to the XIIth Plan, whomsoever they be, to rather act to strengthen its many good ideas, some drawn from bright  people working within the government and others from HLEG 2011, on the expansion of regional AIIMS-like institutions across the country, medical education in the public sector, the provision of free essential generic medicines, the regulation of private sector quacks through accreditation and so on. This is your and our moment, this country’s moment, if it really aspires to being just, fair and ‘inclusive’.

To remind public sector naysayers, within and outside the government, health care is not a normal commodity in many respects (neither is education). Both are linked to fundamental needs and aspirations of the people, what it means to be human, in essence, and as a social animal, a community. A catastrophic illness in the poorest family will compel them to spend all their money, even money they do not have, on the slim chance of survival for one of its members. The desperation of the poor to better their situation and become upwardly mobile – though that is semantically a misleading gradient, too opulent at that standard of living – is what compels families to enroll their children in schools, as they are doing in droves at present in India, against every socio-economic odd and every geographical constraint of vast distances between remote hamlets and providers. Such aspiration is only going to grow in our country today, because of what the media and every single sensory source in our Age of Information Overload is consciously projecting as our country’s shining future.

If the judiciary is increasingly recognising and legislating on rights in the social sector sphere, surely the government ignores them at its own peril in a democracy? And if it is going to do so, let us forget all this humbug about faster growth being pursued to better the lot of ‘the common man’. Let us openly acknowledge that evidence-base and ownership by academics, activist and civil society groups matters not a whit to eventual policy formulation. Let us not attempt to co-opt all dissenting voices, by soliciting their views in endless committees and platforms, while proceeding exactly or even worse than before (such as a supposed desire to move towards universal health care, disguising all sorts of sins of omission and commission), for it is more cynical an act than never having consulted them at all. And let us be prepared politically for the consequences of systematically and knowingly ruling out the possibility of the majority ever being able to participate in a democracy’s so-called ‘success story’, of growth alone. Pursued for its own sake, it is to be a private celebration for an exclusive few.

(Kaveri Gill is an independent academic and researcher based in Delhi. The views expressed in this piece are the author’s own and are independent of any professional institutional affiliation she holds, past or present).


[2] So is education, especially elementary education.

[3] On the primary education side, too, there has been an increase in enrollment and fall in drop-out rates in recent years, but grave questions remain about the actual learning levels and quality of education.

[4] I allude in this piece to an August draft of the proposed Health Chapter of the Approach Paper to the XIIth Plan, which is at present being finalised by the Planning Commission of India. It shall forthwith be referred to as the Health Chapter (August draft). Since there are many drafts and it is a work in progress, figures may differ slightly in citations of different versions by various authors.

[5] These figures vary by source, but the range remains as stated. Public spending increases marginally, if spending on co-determinants of health, such as water, sanitation etcetera, is included.

[6] At 19%, public spending on health as a percentage of total health expenditure is also lower in India (WHO 2007 & 2008) than all South Asian countries, except Pakistan (Sri Lanka: 46.2%; Bangladesh: 29.1%; Nepal: 28.1%; Pakistan: 17.5%), let alone China (38.8%) and Brazil (44.1%). Interestingly, Europe (Germany: 76.9%; France: 79.9%; UK: 87.1%) – with its tradition of welfare states – far outshines the USA (45.1%) in this respect.

[7] It produced, “High Level Expert Group Report on Universal Health Coverage for India” (November 2011), forthwith referred to as HLEG 2011.

[8] Inter alia, “Dangerous Drift in Health Policy – Jan Swasthya Abhiyan Action Alert” (August-September 2012) maybe be accessed at: http://www.scribd.com/doc/103888531/Jan-Swasthya-Abhiyan-Action-Alert; “Setting up Universal Health Care Pvt. Ltd.”, Rakhal Gaitonde and Abhay Shukla, op-ed in The Hindu, 13 September 2012).

[9] Much also “depends upon the specific way the additional public spending is pooled and spent. Prepayment from compulsory sources (i.e. some form of taxation) and the pooling of these revenues for the purpose of purchasing healthcare services on behalf of the entire population is the cornerstone of the proposed universal healthcare…[it] is essential for ensuring that the system is able to redistribute resources and thus services to those in greatest need…both theory and evidence [shows] that no country that can be said to have attained universal coverage relies predominantly on voluntary funding sources (p. 9, HLEG 2011).

[10] “A Primary Evaluation of Service Delivery under the National Rural Health Mission (NRHM): Findings from a Study in Andhra Pradesh, Uttar Pradesh, Bihar and Rajasthan”, Gill 2009, Working Paper 1/2009 – PEO, Planning Commission of India.

[11] This trend for contractual employment to do the same job, in the public and private sector in India (the distribution of regular to contractual workers in Maruti Suzuki’s factory in Manesar is a good example of the latter), can also be traced to the many labour market perils of unfettered globalisation and capitalism.

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