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The Dilemma Of Development And Democracy In India

Updated: March 5, 2011 4:51 pm

India is prospering; Indians are not. The Sun may be shining on India but it is not on Indians. This is the central issue of development and democracy in India.

                Democracy is very demanding, if the benefits of growth are disproportionately siphoned off, there arises a challenge to both democracy and development. That is becoming evident in our country.

                These achievements in democracy make us complacent. But will it survive the coming most dangerous decades?

                My answer is, “Yes, but only if democracy is married to meaningful development for the people at large.”

                Hence the imperative of inclusive development which, in my view, can be secured only through inclusive governance a point well-understood by Rajiv Gandhi but inadequately comprehended or promoted since then. This is my central thesis in the remarks I am making before this distinguished audience, and I am grateful to the Centre for Media Studies (CMS) for affording me the opportunity to do so.

                Between 2009 and 2010 India’s relative ranking on the Human Development Index remains as it was last year. Basically, India’s disgraceful showing at position 134 last year, which ranking was exactly same in 1994, remains unchanged. The latest UN Human Development report calculated HDI annual average growth rates in three categories: 1980-2010 (long term); 1990-2010 (medium term) and 2000-2010 (short term).

                The basic paradox revealed is that while our GDP has been growing, we have not succeeded in translating accelerated growth into inclusive development.

                Worse, it would appear that as GDP/per capita growth rates rise, there is a levelling off, rather than a commensurate rise, in the growth rates of HDI values.

                We are assured on high authority that there is nothing unprecedented or alarming about growth leading to inequality. In his contribution to the festschrift in honour of Dr Montek Singh Ahluwalia, who had then just been conferred an honorary doctorate by Oxford University (which makes me proud of being a Cambridge man myself!) the Prime Minister’s Chief Economic Adviser, Prof Suresh Tendulkar, has invoked Simon Kuznets’ famous U-shape argument to contend that while widening inequalities of income and wealth are an inevitable concomitant of the growth process, this does not amount to the sacrifice of equity because growth benefits everyone even if the higher the growth rate the wider the disparity.

                At the same time, Dr Tendulkar has done his bit to ask for rise in National Poverty Line to 37 per cent under that line.

                The National Commission for Enterprises in the Unorganised Sector has in its August 2007 Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector identified the following categories of “poor”, each of which requires an individually tailored strategy for poverty alleviation and eventual eradication: extremely poor; poor; marginally poor; and vulnerable. While the number of “extremely poor” and “poor” has decreased during the first decade of post-1991 economic reforms, in 2004-05 they still comprised 237 million people; meanwhile the number of poor and vulnerable together numbered 836 million, or 77 per cent of the population. Notwithstanding the rise in middle and high income persons to a significant 253 million, those crying out for help constitute three to four times the number who have succeeded in standing on their own feet.

                National Poverty Line divides the entire population into two comfortable categories—the BPL (Below Poverty Line, about Rs 10 per day) and the Above Poverty Line (APL). This is “comfortable” for two reasons. First, poverty alleviation can then be reduced to the entirely feasible proposition of shifting some top-of-the-line BPL over the line into the APL category and calling it “poverty alleviation”. Second, because it eliminates the tiresome distinction between the marginal survivor and the obscenely rich: all are APL and all, therefore, beneficiaries, in some aggregated manner, of the growth process.

                Our experience of serving up their entitlements of primary education, and health facilities, the public distribution system and rural infrastructure is that the district and sub-district level bureaucracy and technocracy has been the single biggest failure of governance at the grassroots. Sporadic access to entitlements in the absence of empowerment to secure entitlements is principally what has rendered outcomes so hopelessly out of alignment with outlays.

                Thus participative development that is, grassroots development through grassroots democracy—is our imperative need. The path to such development was charted through the 73rd and 74th amendments to the Constitution, which resulted in the present Part IX (‘The Panchayats’) and Part IXA (‘The Municipalities’). In which we have the key to inclusive growth through inclusive governance.

                Unfortunately, the planning and implementation of anti-poverty and grassroots development programmes in India remains self-defeatingly centralised, devolution lacking in political will.

                Prime Minister Rajiv Gandhi rewrote the three Rs of learning Reading, ‘Riting and ‘Rithmetic into the three Rs of democratic local self-government: Representation fostering Responsibility and Responsibility leading to Responsiveness5: R-RR to realise E-E-E!

                The key lies in scientific activity mapping based on the principle of subsidiarity, which holds that anything that can be done at the lower level should be done at that level and at no higher level such that consensually structured activity maps detail the functions to be devolved respectively to the village, intermediate and district levels, and thus provide the basis on which the devolution of finances is to be patterned, matched by a parallel devolution of functionaries to each level of self-governance, in rural as much as in urban localities. Three Fs—functions, finances and functionaries—to provide the framework for the three Rs to lead us down the three-fold E-E-E path! Simple, no?

                The central government has also been woefully slow in using its immense financial clout to push for effective Panchayat Raj.

                There lies the fundamental explanation for India’s shameful showing on the UN’s Human Development Index contrasted with her spectacular showing on GDP. The imperative of inclusive growth has been grasped, but the imperative of inclusive governance has been barely comprehended.

                Much of the dichotomy between growth and equity arises through the privileging of accelerated growth over inclusive growth. None of this can be rectified at the grassroots—without inclusive governance.

                It is a dangerous delusion to imagine that prosperity for a sliver of our population even if that sliver runs to millions in absolute numbers can blind us to the reality of many hundreds of millions more living in dreadful, poverty. We need Shining Indians more than Shining India. And we can get them by listening to Mahatma Gandhi responding on the eve of our Independence:

                “I shall work for an India in which the poorest shall feel that it is their country, in whose making they have an effective voice.”

                In consequence the politics of our poverty is reflected in the poverty of our politics.

                It is not as if outlays on poverty alleviation and meeting social sector needs are decreasing in India, central budgetary outlays on such programmes have risen by a factor of fifteen over the last fifteen years.

                Why are higher outlays impacting so relatively little on all that makes life more bearable for the a poor? Political attention so muted in comparison to the hurrahs we hear over GDP growth rates?

                The problem lies in the answer to the second question the muted attention given to issues of poverty alleviation relative to the race to economic super-power status—even as the solution lies in the answer to the first question why outcomes are noncommensurate with outlays.

                Governance in a time of rapid growth does indeed privilege growth over equity. The contemporary view is that the promotion of prosperity for some, should be encouraged if we are to redistribute prosperity rather than redistribute poverty.

                In the absence of inclusive governance, that is, the intended beneficiaries of poverty alleviation programmes, are left abjectly dependent on a bureaucratic delivery mechanism. Not only is responsive bureaucratic administration almost a contradiction in terms, the Indian experience of the last six decades would appear to confirm that bureaucratic delivery mechanisms absorb a disproportionately high share of the earmarked expenditure: up to 85 paise in the rupee, said Rajiv Gandhi.

                Worse, precisely because over a hundred schemes are delivered to the same set of beneficiaries through mutually insulated administrative silos, convergence of schemes at the delivery point becomes virtually impossible, thus depriving beneficiaries of the multiplier effect.

                In Nehruvian India, Constitutional governance and Parliamentary democracy, and fairly far-reaching land reforms, led to political and social empowerment of a rising middle class. That middle class quickly secured privileged access to their entitlements, particularly in the two key human development areas of education and health.

                The combination of empowerment and entitlements has given India’s middle class enrichment on a scale undreamt of a generation or two ago. This is what has made India a fast-highrising star on the international economy. The sheer size of our middle class make us, in absolute numbers, a huge market and a mouth-watering investment destination.

                But because the numbers of our desperately poor are much, the challenge is to convert accelerated growth into inclusive growth. The path favoured by government, after Government in India has been to exponentially increase spending on anti-poverty programmes such that a critical mass of expenditure will somehow be reached the straw for the poor clutch at to rise out of their misery. The intention is sound but commentators rue the fact that implementation has been hopeless.

                What then is the systemic solution? I suggest that it lies in replicating for the poor the same pattern that has brought such impressive, growing and assured prosperity to our burgeoning middle classes: Empowerment leading to Entitlements and the two together to Enrichment: E-E-E.

Summary of Shri Aiyar’s CMS National Lecture on “Analysing and Envisioning India” at Teen Murti Auditorium, New Delhi

By Mani Shankar Aiyar

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