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Rural Growth Story

Updated: December 15, 2012 3:53 pm

Although the king is invested with authority and power, true sovereignty belongs to dharma, not the King

—Mahabharata, XII.71.26

If China must be regarded as nothing else but a state, Hindoo political existence presents us with a people, but no state.

—GWF Hegel

For a change, this column is not on agriculture, per se, but on political economy, and its impact on people, policies and institutions. It is inspired by Gurucharan Das’s latest work, India Grows at Night which this writer picked up earlier this week, and read it cover to cover. Of course, as in all comprehensive discourse(s) on India, references to agriculture and rural development strategy have to find a place, and this book is no exception. He says: In the short term, the best way for India to improve the lot of rural poor might be to promote a second green revolution. Unlike in manufacturing, India has a competitive advantage in agriculture with plenty of arable land, sunshine and water. To achieve such a change, however, India would need to shift its focus from peasant farming to agribusiness, and encourage private capital to lease land from farmers and to bring the latest technology. It would need to lift onerous distribution controls, allow large retailers to buy crops directly from farmers, and invest in a cold chain so that a quarter of India’s crop could be saved from going rotten in the field.

The main argument of this book is that while India’s economy is growing, and becoming stable and civil society is increasing its assertion, the ability of the state to respond to the rising expectations is going down. However, beyond a point the economy cannot grow and the civil society cannot flourish if the state loses its ability to perform the basic functions. According to him, Indian economy has grown in sectors where state’s interference was the least—Information Technology, management education, hospitality and tourism and low-cost airlines. Moreover, the growth in economy has been spurred on account of rising productivity—a true sign of a country’s health and progress rather than increases in capital or labour. Unfortunately, the state has done little to promote the efficiency of capital or labour.

With regard to civil society, Das argues that India has a tradition of a strong society, but a weak state. The sovereign in India was a distant figure who did not touch the life of ordinary person, who was hit more by the ‘tyranny of cousins’, rather than state power. The joint family, caste and village held society together and this was brought out by Nehru in Discovery of India. India’s society consisted of over half a million more or less autonomous villages that were once reasonably self-sufficient; more than two thousand jatis (endogamous caste groups) and the joint family. However, Ambedkar had major reservations on this idealisation of the village society as he said: “What is the village, but a sink of localism, a den of ignorance, narrow mindedness and communalism? I am glad that the Draft constitution has discarded the village and adopted the individual as its unit.”

This was in contrast to China, where despotic and intrusive governments could do anything: including divesting people of their personal and property rights. Thus, while China had a strong state with a weak society, it was the exact opposite in India. This had its own implications for society in trying to address issues like corruption, it failed to understand that the cause was ‘systematic state failure’, rather than individual aberration and greed! Unless the state was restructured civil society and entrepreneurship could not grow beyond a point.

Let us now examine his proposition on agriculture. He basically makes three points. That rural India’s salvation lies through Second Green Revolution rather than by pumping money in NREGA (make work programmes). The Second Green Revolution should be market-driven better seeds, technologies, micro irrigation, protected cultivation, farm-level aggregation, post-harvest management, farm advisory services and related issues. India had to make the transition from peasant mode of production to agribusiness, including transparent regime for land leasing, contract farming and freedom to transact. The third point was that investments to reduce wastages both in perishables and non-perishables should be made by the private sector for they would ensure not just the establishment of infrastructure but also the connection from farm to fork which state-owned infrastructure could not. The moot point is that rather than restrict the agricultural sector with artificial controls, especially the oligopolistic arrangements in agricultural markets, the state should limit itself to laying down the regulatory structure. Let markets come up in the private, or the co-operative sector.

However, as the readers of this column are aware, all efforts to open up the sector have met with resistance and failure. The state has failed to play the role it was meant to: it has capitulated to the ‘entrenched lobbies’ with their deep and strong connections with the political executive and bureaucracy. The state tries to be intrusive, but is ineffective in carrying out its will because even as the Planning Commission and the Union Agriculture Ministry continue to emphasise the need for reform, the local mandarins refuse to comply. Traders who wish to be entrepreneurs are also held back, and the farmers (in whose name, the votes are mobilised) face a raw deal, and the consumer is also at the mercy of the intermediaries because transactions were not open and transparent.

Before closing, let me assure my readers that the rest of the book is far more interesting! It has chapters on politics of aspiration, middle-class morality, and confronting corruption and last but not least, a clear prescription on what needs to be done, but if all this is spelt out, readers may not buy the book, and it would not be fair to Mr Das!

 

By Sanjeev Chopra

 (An IAS Officer, the author is Joint Secretary & Mission Director, National Horticulture Mission, Government of India. The views expressed are personal.)

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