Wednesday, August 1, 2012

20 Years of Reform in India


Report of the workshop on “20 Years of Reform in India”

PRAXIS, Bangalore and Indian Social Institute, Bangalore organized a three days workshop from 27th to 29th July on “20 Years of Reform in India”.  The workshop tried to evaluate the performance of the Neo Liberal policies that India had been following since 1990.

Prof. John Itty gave an inaugural speech spelling out the tenets of ‘Neo Liberal Programme’.  He pointed out that the programme of Privatization, liberalization and globalization was basically meant for the developed countries like United States of America, United Kingdom and European countries to find entry into India for investment and a market.  It is meant to take advantage of cheap labour in India to make super profit and exploit natural resources and mineral wealth of the country.  Even the financial capital managed to get entry into India to overcome their economic stagnation.

There was a brief recount of Indian economy from 1950 to 1990, pre-reform era.  The significant fact of the pre-reform era was that there was a socialist nuance to the economy.  Immediately after independence India took up the challenge of eradication of poverty, production of more food and industrialization.  Indian state was loud in its opposition to imperialism, feudalism and monopoly capitalism. India followed a path of five year planning for development.  This gave the state a major role in regulating the economy.  India was trying to follow a model of mixed economy with a share for private sector and a share of public sector.  The state assumed a great responsibility for irradiation of poverty by playing a role in education and health system, food security through universal PDS.  It undertook several rural development programmes.
The failure of land reform and gradual shift from self reliance to import dependence landed India in to economic crisis.  The total bankruptcy in the balance of payment forced India to approach IMF for a massive loan.  This loan came with a condition to implement structural adjustment policy dictated by US controlled IMF.

While reviewing the post reform performance of Indian economy a constant comparison was made between pre reform economy and post reform economy.

While India has been praised by the world as the second largest growing economy the performance of the neo-liberal policy has been dismal.
 
On the growth front there is no spectacular performance.  Before 1990 India has seen 8% economic growth.  By 1970 Indian economy has seen massive growth in industry that made her the 9th most industrialized country in the world at that time.  Whatever growth in GDP India is boasting of today is an imbalance growth.  We see more growth in the automobile and consumer durable industry.  In 2009-10 the average growth was 10.8% .  But the automobile and consumer durable had 26% share. This sector cares only for the middle class and upper middle class.  Performance in agriculture has been dismal it has gone down to 0.7%. The consumer non durable sector grew only by 1.5%.  Agriculture and consumer non durable caters for the majority of the population of India.

Through privatization and disinvestment policy the government has handed over most of the public sector units to the private capital with a half sung song. Many of these units have been profit making and were called Nav Ratna units. 

Private players are given free entry into education and health sphere.  All social programmes meant for the upliftment of the poor have been systematically decimated.  The integrated rural development programmes which helped the rural poor to acquire income generating assets have been turned into part of the MGNREGA where the poor receive only wages for 100 days. 

Land acquisition for industrial development, developing SEZs and mining precious minerals by private and multinational companies has driven away the adivasies, daliths and farmers to rely on casual employment and pavement dwelling in the urban centres.  

The earlier food security through universal Public Distribution System has been converted into Targeted PDS as a result many poor have to buy food grains from open market at high price.  

Employment looks rosy only for the IT employees who have capacity to get into higher studies like engineering.  Labour legislations have been amended to ensure industrial peace for the private sector investors to make huge profits.  The blue collar workers have been deprived of their trade union rights which they earned through long struggle by sacrificing their lives. Golden hand shake, VRS has succeeded in bringing huge population into the ranks of unemployed.  Out sourcing by private companies, employing labourers through contractors and turning the employees into casual labourers has turned the employment sector into a nightmare.

The Reform that we would like to see is the reform where the growth should be directly targeted to eradicate poverty.   Instead of searching for market in the foreign developed countries, which have lost their capacity to import, the government should look at the internal market.  If the rural development and growth in agriculture takes place it will serve as a massive market.  We have to ensure that land reform is taken up once again.  It will increase the productivity of farm sector.  There will create massive employment and market for industrial goods.  This means the character of the state has to be changed.  It should play a major role in the economy to regulate the economy -production and distribution.  The myth of Market being a perfect regulator should be abandoned.