february 13, 2016 vol lI no 7 EPW Economic & Political Weekly 4 LETTERS Ever since the first issue in 1966, EPW has been India’s premier journal for comment on current affairs and research in the social sciences. It succeeded Economic Weekly (1949-1965), which was launched and shepherded by Sachin Chaudhuri, who was also the founder-editor of EPW. As editor for thirty-five years (1969-2004) Krishna Raj gave EPW the reputation it now enjoys. editor C Rammanohar Reddy EXECUTIVE Editor aniket Alam Deputy Editor Bernard D’Mello CHIEF COPY Editor KAUSHIK DASGUPTA Senior Assistant Editor Lina Mathias copy editors Prabha Pillai jyoti shetty Assistant editorS P S Leela SANGEETA GHOSH lubna duggal ASSISTANT Editor (web) Anurag Mazumdar editorial Assistant ABHISHEK SHAW production u raghunathan s lesline corera suneethi nair Circulation Gauraang Pradhan Manager B S Sharma Advertisement Manager Kamal G Fanibanda General Manager & Publisher K Vijayakumar editorial [email protected] Circulation [email protected] Advertising [email protected] Economic and Political Weekly 320-321, A to Z Industrial Estate Ganpatrao Kadam Marg, Lower Parel Mumbai 400 013 Phone: (022) 4063 8282 FAX: (022) 2493 4515 EPW Research Foundation EPW Research Foundation, established in 1993, conducts research on financial and macro-economic issues in India. Director J DENNIS RAJAKUMAR C 212, Akurli Industrial Estate Kandivali (East), Mumbai 400 101 Phones: (022) 2887 3038/41 Fax: (022) 2887 3038 [email protected] Printed by K Vijayakumar at Modern Arts and Industries, 151, A-Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013 and published by him on behalf of Sameeksha Trust from 320-321, A-Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013. Editor: C Rammanohar Reddy. Issn 0012-9976 Was Gandhi a Racist? I would like to compliment Nishikant Kolge for the research embodied in his article “Was Gandhi a Racist? His Writings in South Africa” ( EPW, 30 January 2016). I hope the article will enrich the debate on the subject. The article refers to my work, The African Element in Gandhi, published in 2006. I have argued that Gandhi was initially influenced by racial prejudice but gradually outgrew it, and that there was an evolution in his position on this point even while he was in South Africa. Kolge seeks to depict such a position as representing an “extreme” view. He has sought to counterpose it to the other “extreme” represented by Arundhati Roy and others who hold positions similar to hers. There appears to be a categorical mistake in this counterpositioning. As I see it, Roy and others hold Gandhi to have been a racist or to have been influenced by racial prejudice. If that is one extreme, the other extreme would be represented by a position holding Gandhi to have been neither racist nor affected by racial prejudice. As I have pointed out, that is not quite the argument in my work. I had written: The young lawyer, not yet 24, had been brought to South Africa by Indian merchant clients and initially shared some of the racial and class prejudices prevalent among those for whom he worked. He tended sometimes to use the term Kaffir, then current among both Europeans and Indians settled in South Africa, to refer to the bulk of the African population. As a subject of the British Empire, as Gandhi then saw himself, he sought non-discrimination by the European but resented the equation of the educated section of Indians with the ‘raw native’. If, however, the young Gandhi shared any prejudices towards sections of the popu- lation, he outgrew these by around 1908, that is some six years before he left Africa (The African Element in Gandhi, p 4). Kolge has quoted in pages 90–91 of his article from the first sentence of the above passage, has left out the interven- ing words and suffixed to them the bulk of the last sentence in the passage. This is no doubt an innocent mishap, but the full passage would clearly not, it seems to me, have been susceptible to be held up as representing an “extreme” point of view. There is another even more substantive issue that I would like to mention. In my book, as in my subsequent writings on the subject, I have stressed the evolution in Gandhi’s position on the racial question within South Africa, and also that much of this evolution took place while Gandhi was in that country. This evolution has been largely neglected by scholars, includ- ing, unfortunately, the recent authors that Kolge has sought to review and, perhaps, for that reason has been largely denied or ignored even by Kolge. I consider Gandhi’s evolution on the racial question during his South Africa years to have been significant. His broad- ened perspective emerges in his repeated commending of passive resistance to the African and coloured people. It emerges also, for example, in May 1908 in his speech in Johannesburg, where he observed: If we look into the future, is it not a heritage we have to leave to posterity, that all the different races commingle and produce a civilization that perhaps the world has not yet seen? (Collected Works of Mahatma Gandhi, Vol 8, pp 242–46). Incidentally, no reference was made to this (and similar vital statements indi- cating a widening of Gandhi’s horizon) even by Maureen Swan, whose work on Gandhi in South Africa in the 1980s has often influenced subsequent discourse. Anil Nauriya New Delhi Appropriating Ambedkar O n the occasion of the centenary cele- bration of B R Ambedkar’s birth anniversary, the eminent scholar of jurisprudence, Upendra Baxi, had warned us: “Centenary celebrations are organised political events having distinctive ideo- logies of recall and distinctive modes of appropriating a historical figure for the purposes of the present.” Baxi identified seven Ambedkars in his discourse to highlight different dimensions of his life and thought. The changing face of Ambedkar in the Hindutvavadi discourse is an interesting phenomenon. A controversy has cropped up in the context of the attempt by the Modi government to print the original col- lected works of Ambedkar as a part of his
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly4
LETTERS
Ever since the fi rst issue in 1966,EPW has been India’s premier journal for
comment on current affairsand research in the social sciences.
It succeeded Economic Weekly (1949-1965),which was launched and shepherded
by Sachin Chaudhuri,who was also the founder-editor of EPW.
As editor for thirty-fi ve years (1969-2004)Krishna Raj
gave EPW the reputation it now enjoys.
editor
C Rammanohar Reddy
EXECUTIVE Editor
aniket Alam
Deputy Editor
Bernard D’Mello
CHIEF COPY Editor
KAUSHIK DASGUPTA
Senior Assistant Editor
Lina Mathias
copy editors
Prabha Pillaijyoti shetty
Assistant editorS
P S LeelaSANGEETA GHOSHlubna duggal
ASSISTANT Editor (web)
Anurag Mazumdar
editorial Assistant
ABHISHEK SHAW
production
u raghunathans lesline corera
suneethi nair
Circulation
Gauraang Pradhan Manager
B S Sharma
Advertisement Manager
Kamal G Fanibanda
General Manager & Publisher
K Vijayakumar
Economic and Political Weekly320-321, A to Z Industrial Estate
Ganpatrao Kadam Marg, Lower ParelMumbai 400 013
Phone: (022) 4063 8282FAX: (022) 2493 4515
EPW Research FoundationEPW Research Foundation, established in 1993, conducts
research on fi nancial and macro-economic issues in India.
Director
J DENNIS RAJAKUMARC 212, Akurli Industrial Estate
Kandivali (East), Mumbai 400 101Phones: (022) 2887 3038/41
Fax: (022) 2887 3038 [email protected]
Printed by K Vijayakumar at Modern Arts and Industries, 151, A-Z Industrial Estate, Ganpatrao Kadam Marg,
Lower Parel, Mumbai-400 013 and published by him on behalf of Sameeksha Trust
from 320-321, A-Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013.
Editor: C Rammanohar Reddy.
Issn 0012-9976
Was Gandhi a Racist?
I would like to compliment Nishikant Kolge for the research embodied in his
article “Was Gandhi a Racist? His Writings in South Africa” (EPW, 30 January 2016). I hope the article will enrich the debate on the subject.
The article refers to my work, The African Element in Gandhi, published in 2006. I have argued that Gandhi was initially infl uenced by racial prejudice but gradually outgrew it, and that there was an evolution in his position on this point even while he was in South Africa. Kolge seeks to depict such a position as representing an “extreme” view. He has sought to counterpose it to the other “extreme” represented by Arundhati Roy and others who hold positions similar to hers. There appears to be a categorical mistake in this counterpositioning.
As I see it, Roy and others hold Gandhi to have been a racist or to have been infl uenced by racial prejudice. If that is one extreme, the other extreme would be represented by a position holding Gandhi to have been neither racist nor affected by racial prejudice. As I have pointed out, that is not quite the argument in my work. I had written:
The young lawyer, not yet 24, had been brought to South Africa by Indian merchant clients and initially shared some of the racial and class prejudices prevalent among those for whom he worked. He tended sometimes to use the term Kaffi r, then current among both Europeans and Indians settled in South Africa, to refer to the bulk of the African population. As a subject of the British Empire, as Gandhi then saw himself, he sought non-discrimination by the European but resented the equation of the educated section of Indians with the ‘raw native’. If, however, the young Gandhi shared any prejudices towards sections of the popu-lation, he outgrew these by around 1908, that is some six years before he left Africa (The African Element in Gandhi, p 4).
Kolge has quoted in pages 90–91 of his article from the fi rst sentence of the above passage, has left out the interven-ing words and suffi xed to them the bulk of the last sentence in the passage. This is no doubt an innocent mishap, but the full passage would clearly not, it seems to me, have been susceptible to be held up as representing an “extreme” point of view.
There is another even more substantive issue that I would like to mention. In my book, as in my subsequent writings on the subject, I have stressed the evolution in Gandhi’s position on the racial question within South Africa, and also that much of this evolution took place while Gandhi was in that country. This evolution has been largely neglected by scholars, includ-ing, unfortunately, the recent aut hors t h a t Kolge has sought to review and, perhaps, for that reason has been largely denied or ignored even by Kolge.
I consider Gandhi’s evolution on the r acial question during his South Africa years to have been signifi cant. His broad-ened perspective emerges in his repeated commending of passive resistance to the African and coloured people. It emerges also, for example, in May 1908 in his speech in Johannesburg, where he observed:
If we look into the future, is it not a heritage we have to leave to posterity, that all the different races commingle and produce a civilization that perhaps the world has not yet seen? (Collected Works of Mahatma Gandhi, Vol 8, pp 242–46).
Incidentally, no reference was made to this (and similar vital statements indi-cating a widening of Gandhi’s horizon) even by Maureen Swan, whose work on Gandhi in South Africa in the 1980s has often infl uenced subsequent discourse. Anil NauriyaNew Delhi
Appropriating Ambedkar
On the occasion of the centenary cele-bration of B R Ambedkar’s birth
anniversary, the eminent scholar of jurisprudence, Upendra Baxi, had warned us: “Centenary celebrations are organised political events having distinctive ideo-logies of recall and distinctive modes of appropriating a historical fi gure for the purposes of the present.” Baxi identifi ed seven Ambedkars in his discourse to highlight different dimensions of his life and thought.
The changing face of Ambedkar in the Hindutvavadi discourse is an interesting phenomenon. A controversy has cropped up in the context of the attempt by the Modi government to print the original col-lected works of Ambedkar as a part of his
Economic & Political Weekly EPW february 13, 2016 vol lI no 7 5
LETTERS
Web ExclusivesThe following articles have been published in the past week in the Web Exclusives section of the EPW website. They have not been published in the print edition.
(1) Plutocracy, Populism and the 2016 American Election —Kaushik Sunder Rajan
(2) Removing Discrimination in Universities —Sthabir Khora
Articles posted before 6 February 2016 remain available in the Web Exclusives section.
125th birth anniversary celebrations. This venture is facing stiff opposition from Ambedkar’s grandson, Prakash Ambedkar, who has refused to allow the printing of the original collected works in English. Suspecting the motives of the Bharatiya Janata Party (BJP) and the Rashtriya Swayamsevak Sangh (RSS), Prakash Ambedkar told the media that he would not forget “history” wherein the Ambed-karites were pitted against the BJP and RSS. He recalled that when Ambedkar’s complete works were being published during the tenure of the Shankarrao Chavan government, it was the BJP and RSS who had vehemently opposed it.Arup Kumar SenKolkata
No Educational Loans for SCs
The participation of Scheduled Castes (SCs) or socially backward students in
higher education (professional/technical in government or private colleges) is per-haps far below expectations. The reasons behind this are rightly analysed by Govardhan Wankhede in his article, “Higher Education and the Scheduled Castes in Maharashtra” (EPW, 6 Febru-ary 2016). In West Bengal, it was found that higher education along with profes-sional/technical education in government or private colleges depended on parental education and occupation. That is why a section of such students were much more established in their career. Even their mer-its or results were not so much better than those who were not socially well-estab-lished. But a majority of them (SC stu-dents) were lagging far behind, even after obtaining good results or praiseworthy merits. So, these students had to enter their traditional caste-based occupation, or worked as daily-wage labourers. Gov-ernment facilities (that is, amount of scholarship and process of selection and disbursement) were not enough to access higher education. Further, educational loan facilities did not extend to the poor SCs because of the absence of suffi cient se-curities (collateral). Bankers or fi nancial institutions were only doing business for the rich—“to carry coal to new castle.” Harasankar AdhikariKolkata
Corrigendum
There were some citations, quotations, proper nouns and subheadings which were changed/deleted by mistake during the editing of the article “Religion, Caste and Conversion: Membership of a Scheduled Caste and Judicial Deliberations”, by Padmanabh Samarendra, published on 23 January 2016. Corrections to the quotations, proper nouns and subheadings have been made on the website. A full list of citations can be had from the author. The errors are regretted.
Kerala’s First Women’s Trade Union
The Asanghaditha Mekhala Thozhilali Union (AMTU), Kerala, a women’s
trade union, applied for registration on 18 January 2016 and received it on 30 January 2016. Even though Kerala has a long history of trade union movements this is the fi rst time that a women’s trade union has been recognised in the state. The continued neglect by the mainstream and male-dominated trade unions towards the issues faced by women workers in the unorganised sector is one of the major reasons behind the union’s formation.
“Asanghaditha Mekhala Thozhilali Union” literally means “Unorganised Sector Workers Union.” It has evolved from a women’s collective known as Penkoottu. Penkoottu consists of women workers employed in different enterprises situated in the Sweet Meat Street (popu-larly known as SM Street) in Kozhikode and includes sweepers, tailors and sales-women. They came together to demand their rights in 2009 under the leadership of P Viji, a tailor in SM Street. The “right to pee” was the fi rst campaign taken up by the movement targeting the lack of toilet facilities for women employees in shops and establishments.
Penkoottu organised public protests in Kozhikode city over the issue. The “toilet strike” as it came to be known was successful to a large extent. The district collector ordered the construc-tion of new toilets and the repair and renovation of existing ones. Gradually, the AMTU was formed and has led many strikes and protests on behalf of women workers such as the Right to Sit strike (Kalyan Sarees), the Coupon Mall strike, the Community Development Organisers strike, etc.
As a lawyer, I was enthusiastic about getting the union registered but the cynical attitude of the labour department
a uthorities was disappointing. They consistently tried to delay the registra-tion proceedings. The fi rst objection they raised was that a union could not be a women’s trade union despite the existence of the Self-Employed Wom-en’s Association (SEWA), a women’s trade union which was registered in 1972. However, the main difference be-tween the AMTU and SEWA is that the former welcomes male workers as mem-bers too. Further, the authorities said that it is impossible to defi ne “unorgan-ised sector” and therefore a union can-not be registered in that name. The N ational Commission for Enterprises in the Un organised Sector (Arjun Sengup-ta Report) of 2007 clearly defi nes the unorganised sector and we had to pro-vide it in writing to convince the scepti-cal offi cials. Apart from this, they raised a number of technical points. In the end, the working women succeeded.
When the work spaces and trade unions are ruled by men and their patri-archal prejudices, it is a matter of great pride that a women’s trade union is over-coming all the structural barriers and has got registration. Penkoottu will continue to function as an open platform of women for larger causes.Anima MuyarathTata Institute of Social Sciences, Mumbai
LETTERS
february 13, 2016 vol lI no 7 EPW Economic & Political Weekly6
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FEBRuary 13, 2016
Economic & Political Weekly EPW FEBRuary 13, 2016 vol lI no 7 7
Focus on Economy, Not Defi cit
With the global outlook gloomy, the union budget needs to take a larger view of defi cits.
This year’s budgetary exercise needs to deal with four specifi c challenges: (a) the macroeconomic context, Indian and global, (b) expenditure priorities, (c) the revenue
stream available to fi nance such expenditures, and (d) fi scal sustainability. Though the issues are the same ahead of every budget, they are in particular major challenges before the 2016–17 union budget.
India is a “bright spot” in the world according to the multilat-eral institutions. One is unsure whether that is of any comfort when it comes to planning for the budget. The Central Statistics Offi ce’s (CSO) advance estimates place gross domestic product (GDP) growth in 2015–16 at a higher than expected 7.6%, but even the CSO numbers say growth has been decelerating since the fi rst quarter (April–June) of 2015–16. On the domestic demand front, the observations made in the Sixth Bi-monthly Monetary Policy Statement, 2015–16 of the Reserve Bank of India (RBI) are worrisome. The statement highlighted the fact that there has been a weak investment demand and defi cient monsoon of the order of 23%. On top of it, we have a grim global economic out-look characterised by slowing growth in emerging market econ-omies (EMEs), bleak prospects for export demand, depressed commodity prices and extremely volatile global currency markets. Given this overall weakening of economic activity and negative sentiments, the critical challenge would not only be to change the mindset through appropriate policy action but also for budgetary arithmetic to arrive at a realistic GDP growth number for projections of key fi scal variables for 2016–17.
When one talks about the macroeconomic context of India today, we are in a situation where there is no clarity on the nominal and real growth rates. How much of this difference between the nominal and real is actually due to the decline in the price level and how much is due to a change in the way we calculate GDP value added is unclear. According to the advance estimates for 2015–16, the nominal GDP growth rate of 8.6% will be much lower than 11.5% assumed at the beginning of the current fi nancial year. Since budget-making is an exercise in current prices, a nominal GDP growth that is lower than expected, by more than 300 basis points, is going to make meeting the fi scal and revenue defi cit targets for 2015–16 very diffi cult.
Since the revenue side provides the resource envelope for budgeting, a realistic target for revenue in 2016–17 is a must for
credible fi scal policy. If we examine monthly data of revenue collection up to December 2015, more than 70% of the aggre-gate revenue target has been realised, which is higher than for the corresponding period in the previous year. One of the major reasons for this is the larger collection of non-tax revenue. More than 82% of the non-tax target has already been achieved due to the signifi cantly higher collection of revenues under the head of economic services. Unfortunately, this does not refl ect improvement in the structural bottlenecks in the tax system and tax base. Sluggish corporate profi ts and slower economic activity seem to have reduced direct tax collection, while indirect taxes provided a cushion as a tax on petroleum products and an additional cess of 0.5% on service tax fetched more revenues.
It needs to be noted that government programmes cannot run through cesses and surcharges. Earmarked taxation is bad tax policy. Yet, it seems to have become the order of the day as refl ected in its share in central revenues going up steadily in the last 15 years. On the tax side, one of the major failures of the present government is of landing up in a situation where there is a complete deadlock on the Goods and Services Tax (GST) front “despite the best of intentions.” This is only going to harm the economy, especially the manufacturing and the service sec-tors. It is probably time the central government takes proactive steps and introduces GST at the manufacturing level by inte-grating excise duty and service tax in the coming budget, which does not require a constitutional amendment, a case made by many tax experts. This would simplify the indirect tax system, smoothen the tax credit fl ow between goods and services, pro-vide buoyant revenues and boost growth. If introduced, the benefi ts of a central GST would create a demonstration effect for the states to come on board on this crucial tax reform.
On the expenditure side, the need to increase capital spending and relax the fi scal defi cit target in order to facilitate a higher public investment seems to be the offi cial position at North Block. There is absolutely no harm in taking such a fi scal stance, parti-cularly when private investment demand is low. However, there is no guarantee that an increase in the fi scal defi cit would auto-matically ensure higher public investment when there is a large revenue defi cit. As per the Medium Term Fiscal Policy Statement of 2015–16, for the year 2016–17, the fi scal defi cit is estimated at 3.5% of GDP while the revenue defi cit is pegged at 2.4%. Since
EDITORIALS
FEBRuary 13, 2016 vol lI no 7 EPW Economic & Political Weekly8
benign petroleum prices have created additional fi scal space via the reduction in the subsidy bill, one can only hope that this will continue in 2016–17, reducing the revenue defi cit and thus creat-ing extra fi scal space for capital spending. However, sooner than later, two major fi scal commitments will have to be met, namely, the award of the Seventh Pay Commission and the implementa-tion of the one rank one pension scheme for retired defence ser-vice personnel. Both are going to put pressure on the revenue defi cit. On top of that, if nominal GDP growth continues to be
higher than real GDP growth in 2016–17 as well, what that would mean for defi cits as a percentage of GDP is anybody’s guess. It is probably time we judge the credibility of fi scal policy commit-ment through multiple indicators that refl ect revenue perfor-mance, expenditure priorities, including the composition of spending, rather than through a narrow target of the fi scal defi -cit as a percentage of GDP. In other words, the policy focus should move away from meeting the defi cit target to prudent fi scal management for growth and development .
EDITORIALS
FEBRuary 13, 2016 vol lI no 7 EPW Economic & Political Weekly8
No Method in the Madness
The imposition of customs duties on 76 life-saving drugs is arbitrary and senseless.
The decision to impose a customs duty of 22% on a list of 76 life-saving medicines is symptomatic of several things wrong with the pharma pricing scenario in India. One
arm of the government, the Department of Pharmaceuticals, is in charge of implementing the Drugs (Prices Control) Order (DPCO) 2013. Another arm, the Ministry of Health, is nowhere as they are seen as probably not relevant to the issue.
The DPCO-2013 has put 348 medicines of the NLEM-2011 (National List of Essential Medicines) in specifi c formulations and specifi c strengths, and only those, under a price ceiling. The calculation of the ceiling price itself is fl awed based on a naïve simple average market-based price mechanism. This legitimises the already high drug formulation prices. The fl awed DPCO-2013 nevertheless succeeds in putting a brake on prices of some essential medicines, even if it covers only a max-imum of 15% of the domestic pharma market of around Rs 90,000 crore. The list of 76 drugs, on which customs duties are now to be imposed, has those in common with the 348 drugs of the DPCO-2013 and the recent NLEM-2015. So why does the government giveth to the patient with one hand and taketh with the other? Because the many arms of the government are not in conversation with each other.
The customs duty itself will result in a marginal decrease in imports before demand catches up. A liberal estimate of the annual import of these 76 drugs is that it will not cross Rs 15,000 crore. That means a maximum additional revenue of Rs 4,000 crore. Is this something that the government desperately needs, especially when it means increasing the price of life-saving drugs?
The customs duty imposition may have sought to narrow the price gap between locally manufactured bulk drugs and imported ones. But in many cases a 22% duty will hardly bridge the gap. And in some cases like imatinib mesylate, used in certain types of cancer, the public procurement price of Rajasthan Medical Services Corporation is already a hundred times lower than the government’s own ceiling price. Certainly there was no sense in including imatinib as its domestic price is affordable. Was it not possible for the government to study the list of 76 medicines systematically from the point of identifying which medicines need protection to encourage domestic production and which
do not need such protection? Such mindless imposition on the costly life-saving medicines, that are under patent or are dependent on imported active pharmaceutical ingredients (APIs), will increase the burden on hapless patients as manufac-turers/importers will pass on the duty. (The additional burden may be less than 22% in cases where value-added tax set-offs are applicable.) In all, there is no method behind this bureau-cratic madness. It treats apples, oranges and bananas alike.
The duty imposition has once again brought into focus issues in urgent need of national debate: namely, accessibility, afford-ability and availability of medicines. First is the issue of price control of expensive patented medicines. Here, only the producer knows the true costs of discovery, development and manufac-ture of the patented drug. No price formula based on the per capita gross national product (GNP) has yielded acceptable results. The second option is to have price negotiations with manufacturers. Again there is no successful precedent as such negotiations get mired in stalemates. The other alternative is of voluntary licensing agreements like that to produce Gilead which have been drawn up with eight Indian pharma companies for the manufacture of sofosbuvir, useful in treatment of Hepatitis C virus infections. Voluntary licensing checkmates the domestic licensees who may be thinking of applying for a com-pulsory licence, apart from twisting their arms in other ways. The option that is left is compulsory licensing for government use (under Sections 84, 92 and 100 of the Patents Act), which is valid and consistent with the agreement on Trade-Related Aspects of Intellectual Property Rights. For this the government needs clarity and political will—a scarce commodity. Only actual manufacture by domestic producers can help discover the prices of new medicines that are under patent. In the imatinib case which Novartis lost in 2013, no amount of price negotiation could have resulted in domestic prices of imatinib that ended up being 10,000 to 15,000 percent lower than the earlier market price.
The revised NLEM-2015 list that will be the basis for setting future ceiling prices under the DPCO is certainly an improved list from the point of constituting an essential list. But price control based on such limited lists will continue to leave out isomers, derivatives, chemical analogues, medicines other than
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specifi ed dosages, many life-saving medicines, etc. For more affordable medicines we need price control of an enlarged list that includes all life-saving and useful, patented and out-of-patent
medicines, including the list of 76 drugs, and with a liberal policy of government use of compulsory licensing. Finally, we also need a more nuanced imposition of customs duties, if at all.
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Light to Moderate Growth
Forecasting GDP growth is better left to the bookmakers and the weatherman.
A re we really growing at 7.6%? The pessimists invite us to look at what has been happening to exports and public investment. Consider the spate of criticism to which the
Central Statistics Offi ce’s estimates of the gross domestic prod-uct (GDP) have been subjected (not least in the columns of EPW). Given the discrepancy between the new series and the old series, which (if either) is to be believed? And what, the nay-sayers ask, of the past record of growth forecasts? For the fi scal year (FY) 2013, the initial estimate was 5.1% while the actual outcome was 5.6%; for FY14, the corresponding fi gures were 6.9% and 6.6% respectively. The cynics assure us that it is not just the magnitudes of the forecasts but their directions which are suspect. And then there was the very public disagreement between the chief economic adviser (CEA) and the governor of the Reserve Bank of India (RBI). It would appear that the CEA has lost his bet with the governor on an accelerated growth rate rather badly: the former was backing 8.1% to 8.5%, while the gov-ernor put his money on a more modest (and in the event, realis-tic) 7.4%. If we do not watch out, bookmakers are going to get into the act in a big way, and then what will the match-fi xing harvest be? We may soon have to be drawing again on the ser-vices of Justices Mudgal and Lodha.
What all this suggests is that it is not a good idea to make growth rate predictions that involve actual real numbers. For it is on the basis of these numbers that the government and the RBI have to make decisions on public spending, revenue mobili-sation, the size of the defi cit, and the rate of interest. The economist Pranab Bardhan has recently expressed the apprehension that the tax concessions made to the corporate sector are in excess of
the provisions for welfare spending in the budget. One must not rush from this to the conclusion that we are dealing with a government that cares more for the business community than for the labouring poor. Oh no, it is not a case of crony capital-ism, simply a case of arithmetic gone awry because of defective growth forecasting. If the projected value of GDP is erroneous, how can the government be expected to get its numbers on revenue and expenditure and defi cit right? So if the state is to be aided in its genuine concern for progressive taxation and generous social sector spending, if academic economists and the chiefs of data generating agencies are to be prevented from engaging in tetchy exchanges, if the CEA and the RBI governor are to avoid betting in public, then the time has come to let ambiguity in and keep the bookies out. That is to say, no more precise numerical forecasts. There is a strong case, instead, for prognosticating in very general terms, for allowing for multiple interpretations, for predicting one thing and its opposite, and for refraining from hasty commitment to specifi c numbers. We already have a helpful model available from the Indian Meteorological Department. Everybody all around, henceforth, would benefi t greatly if the Economic Survey were to couch its growth forecasts along the following lines:
…light to moderate growth, with isolated heavy growth, expected over interior Karnataka, Kerala, and Madhya Maharashtra…Interior Tamil Nadu, Kerala and Rayalseema may witness scattered light to moderate growth, while North Coastal Andhra Pradesh and Telangana may experience isolated bouts of growth…the growth impetus could shift towards South Interior Karnataka and South Coastal Andhra Pradesh and intensity of growth may increase (or not) over South Coastal Andhra Pradesh, South Interior Karnataka and Rayalseema…
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First Published in 1966
To mark 50 years of EPW, each week in 2016 will present an extract from our archives.
Vol ViII, No 7 FEBRUARY 17, 1973
Facade of Licensing The liberalisation of licensing policy for the larger houses conforms to the actual trend of government policy in the last year or so when fewer and fewer cases of concentration of eco-nomic power relating to the larger houses have been referred to the MRTP Commission and these houses have been allowed to even regularise clandestinely installed capacity in a number of industries. Clearly, the claim that
the latest industrial policy statement will in any way lead to more effective control of con-centration of economic power does not merit serious consideration
If in the past industrial licensing failed to ensure the development of industries accord-ing to plan targets, the reasons were that the development plans for industries were never worked out in suffi cient detail in terms of scales of production, technology, location, etc, that inter se priorities among the legion of so-called priorities were never determined, that the time-phasing of the planned investment in any industry was left vague, and so on. In these re-spects too the industrial policy statement pres-ages no improvement. Quite the contrary. The off-hand manner in which the list of so-called “basic, critical and strategic’’ industries has been put together points to a further dilution
of industrial priorities, if that is possible. As already mentioned, the list contains omnibus categories which no doubt hide all manner of non-essential industries. Even some of the in-dustries specifi cally mentioned, such as synthet-ic detergents or man-made fi bres, can scarcely be classifi ed as “basic, critical and strategic”. This again is perfectly in keeping with what has been actually happening in the last few years when, faced with an industrial recession, the government has thrown to the winds even such notions of priorities as might have been con-tained in the now practically-defunct Fourth Plan. Clearly, without a scheme of priorities, in-dustrial licensing has no raison d’etre as a major instrument for regulating the development of industries. Of course, it will continue to be used, as it has been in the past, as a devise for dispens-ing — or withholding — political patronage.
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febrUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly10
Has the Crash of the Global Financial Markets Begun?
T Sabri Öncü
T Sabri Öncü ([email protected]) is an economist based in Istanbul, Turkey.
Even as some insist that the global economy is in “secular stagnation,” the facts suggest that we may be entering the “worst” depression in history. The global markets have been on a slippery slope since the summer of 2007, and things have only been getting worse in 2016. The picture looks dismal, no matter which theoretical lens one uses.(This article was written on 5 February before last week’s tumble in global and Indian markets.)
A s the following quotation from Bradford DeLong’s 8 January 2016 Huffi ngton Post article demon-
strates, one of the ongoing debates among economists of many tribes is whether the period that began in the summer of 2007 will be called the “Greatest Depres-sion” or the “Longest Depression” by future economic historians.
Unless something big and constructive in the way of global economic policy is done soon, we will have to change Stiglitz’s fi rst name to ‘Cassandra’—the Trojan prophet-princess who was always wise and always correct, yet cursed by the god Apollo to be always ignored. Future economic historians may not call the period that began in 2007 the ‘Greatest Depression’. But as of now, it is highly and increasingly probable that they will call it the ‘Longest Depression’.
I offer “Worst Depression” as the third alternative and leave it to future eco-nomic historians to call the period that began in 2007 whatever they want. However, some sort of consensus is emerg-ing as the reconciliation prize of this debate. It is that the period that began in the summer of 2007 is some sort of depression, despite Lawrence Summers still calling it secular stagnation.
Market Crash
A second and more heated ongoing debate is whether the global fi nancial markets will crash or not. Of course, there are even those who claim that the global fi nancial markets have crashed already, but we are the minority these days. Apparently to some, an evaporating $14.4 trillion in the world equity markets from its peak of $73.1 trillion on 14 June 2015 to $58.7 trillion on 31 January 2016 does not count as a market crash.1
And there are some minor debates even among those of us who claim that the crash has already occurred. The minor debates are about when exactly the crash
started: the third quarter of 2014, or the second quarter of 2015, or the third quarter of 2015, or with the turn of 2016 and the like. I must confess, however, that I appear to be the only one who claims that the crash started in the third quar-ter of 2014, at least to my knowledge.
But, what did happen in the third quarter of 2014?
On 18 September 2014, the US market index (Standard & Poor’s 500 or S&P 500) peaked and stayed more or less at the same level the next day. It started to decline after 19 September and bot-tomed on 15 October 2014. The total decline from 19 September to 15 October was about 7.4%, falling short of 10% to qualify as a market correction.
Quantitative Easing Stops
After the fact, many explanations can be and were offered such as concerns about the absence of aggregate demand in the world, the possibility of the Federal Reserve or Fed (the US central bank) raising the interest rates, lower than expected infl ation in China, and other such explanations. Ongoing in the back-ground, however, was the Fed’s winding down of the bond purchases in its third bond-buying programme, also known as Quantitative Easing 3 (QE3). This winding down of the QE3 started in February 2014 and ended on 29 October 2014 (I had discussed QEs in an earlier column in EPW (10 October 2015)).
With the benefi t of hindsight, I can now say that the real reason for this 7.4% decline from 19 September to 15 October 2014 was the 17 September press release of the minutes of the meet-ing of the Fed on 16–17 September. The minutes announced that the Fed offi cials had decided to reduce the bond pur-chases to $15 billion a month and agreed to end the QE programme after their 28–29 October meeting if the economy continued to improve as expected.
Apparently, it took two days for readers of the minutes to digest the information and the slide started a day after 19 Sep-tember to continue until 15 October. Then, on 16 October 2014, James Bullard, the President of the Federal Reserve Bank of
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Economic & Political Weekly EPW febrUARY 13, 2016 vol lI no 7 11
St Louis, came out and said that the Fed may want to extend its bond-buying programme beyond October to keep its policy options open, given falling US infl a-tion expectations. This calmed fears and the market resumed its upward trend for a while with ups and downs, of course. Had he not done that, would the market have continued sliding down? Who knows?
Then came the second quarter of 2015.The slide of Chinese stocks began on
12 June 2015. From 12 June to 24 August 2015, the Shanghai Composite Index lost 38% of its value while the world equity market capitalisation declined by about $10 trillion. This was an unquestionable crash that started in the second quarter and ended in the third quarter.
Then, in the third quarter of 2015, came the Chinese yuan devaluation of 11 August 2015.
The People’s Bank of China shocked the markets on 11 August with the yuan’s biggest one-day devaluation in 20 years, lowering its daily mid-point trading price to 1.87% less against the dollar. The deval-uation continued until 13 August, total-ling a 3% decline of the yuan against the dollar in three days. This sent shockwaves through the fi nancial markets, taking stocks and Asian currencies down with it.
Shortly after, on 18 August 2015, the Shanghai Composite index started crash-ing again, but this time taking the US equity indexes down with it. From 17 August to 25 August 2015 it crashed about 25%, and individual crashes on 24 August and 25 August were about 9% and 7% respectively. Meanwhile in the US, the S&P 500 fell by 11.2% from 17 August to 25 August 2015, with the largest decline on 24 August. This is now among the “Black Mondays” of history, and some even call 25 August 2015 “Black Tuesday.”
After this, many interventions by the world’s major central banks and others took place, and the markets started to move up happily ever after. Well, not quite. With ups and downs, but up on the average until the turn of the year.
An important event before the turn of the year took place on 16 December 2015. Finally on that day, the Fed did what it had been advertising at least since the summer of 2013: it raised its policy rate—the Fed Funds Target Rate—by
25 basis points. This was the fi rst Fed rate hike in over nine years. The markets took notice, but then it was the holiday season, so nothing serious happened until the turn of the year.
Latest Slide
Then 2016 arrived and the markets opened on 4 January 2016.
Since then the equity markets have been in turmoil. Between 29 December 2015 and 20 January 2016, the S&P 500 has declined by about 11% (a warranted correction) and the world equity market capitalisation dropped by about $7 tril-lion. After 20 January 2016 and up to 5 February, the markets have recovered some, but up and down daily swings of signifi cant sizes continue to occur.
Here are a few events since the begin-ning of 2016.(i) Rumours that the Italian banking system might collapse.(ii) Rumours that Deutsche Bank could become the next Lehman Brothers.(iii) Chinese economy is facing a moun-tain of bad loans that could exceed $5 trillion.(iv) The negative interest rate programme in Japan.(v) The 10 Year US Treasury Rate is going below 1.80%, and moving up and down wildly.(vi) Oil price has gone below $30 per bar-rel, and has moved up and down wildly.(vii) Gold price has gone above $1,155 per troy ounce, and has moved up and down wildly.
(viii) The Baltic Dry Index, a measure of the health of world trade, crashed below 300 for the fi rst time in its entire history.
These should be enough. I guess you get the picture.
Let me now throw in some terminology. Marxian “over-accumulation,” “over-production,” and “underconsumption” crises theories, Keynesian theory of “lack of aggregate demand,” “fi nancial instability hypothesis” of Minsky, “debt defl ation theory of depression” by Irving Fisher, Steve Keen’s “excessive private debts,” Michael Hudson’s “debts that cannot be paid will not be,” and the like. No matter which theory you use to look at the picture, your conclusion will be the same.
Whether it is the “longest” or the “greatest,” the world has been in depres-sion since the summer of 2007. And the global market crash is already underway.
On 29 January 2016, the Guardian asked a number of economists whether the gyrating fi nancial markets are fac-ing a global meltdown. One of the econ-omists was the former Greek Finance Minister Yanis Varoufakis. He concluded his response as follows. “Should we be afraid? Yes. Is it inevitable that a new 2008 is coming? In political economics, nothing is inevitable.”
I respectfully disagree.
Note
1 “Bloomberg World Exchange Market Capitali-sation in US dollars—WCAUWRLD—Index, weekly data.”
Journal Rank of EPWEconomic & Political Weekly is indexed on Scopus, “the largest abstract and citation database of peer-reviewed literature,” which is prepared by Elsevier NV (http://tinyurl.com/o44sh7a).Scopus has indexed research papers that have been published in EPW from 2008 onwards. The Scopus database journal ranks country-wise and journal-wise. It provides three broad sets of rankings: (i) Number of Citations, (ii) H-Index and (iii) SCImago Journal and Country Rank. Presented below are EPW’s ranks in 2014 in India, Asia and globally, according to the total cites (3 years) indicator. ● Highest among 36 Indian social science journals and highest among 159 social science journals ranked in
Asia.● Highest among 36 journals in the category, “Economics, Econometrics and Finance” in the Asia region, and
36th among 835 journals globally.● Highest among 23 journals in the category, “Sociology and Political Science” in the Asia region, and 15th
among 928 journals globally.● Between 2008 and 2014, EPW’s citations in three categories (“Economics, Econometrics, and Finance”;
“Political Science and International Relations”; and “Sociology and Political Science”) were always in the second quartile of all citations recorded globally in the Scopus database.
For a summary of statistics on EPW on Scopus, including of the other journal rank indicators, please see http://tinyurl.com/qe949djEPW consults referees from a database of 200+ academicians in different fields of the social sciences on papers that are published in the Special Article and Notes sections.
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Ignorant Criticisms of Historians
Rajan Gurukkal
Rajan Gurukkal ([email protected]) is a former Vice Chancellor of the Mahatma Gandhi University, Kottayam and is presently visiting professor at the Centre for Contemporary Studies, Indian Institute of Science, Bengaluru.
A statement in November by a group of academics, tacitly over-defensive of the ruling power, rails against historians for adopting a blinkered and reductionist view and looking at Indian society through the prism of caste. The accusations betray a familiar ignorance of a certain category of academics about the diversity in Indian historiography.
On 3 November 2015, a team of academics led by archaeologists and historians, tacitly over-defen-
sive of the ruling power, reacted against the public statement issued on 26 October by several historians and social scientists. The public statement later supported by colleagues expressed concern at the rising intolerance in the country. The reaction of the government’s apologists brands the petitioners as leftists and Marxists who by ideologically position-ing against the Modi government and hypocritically claiming moral high ground cry wolf over the issue of intolerance. They accuse them of dominating historical bodies like the Indian Council of Historical Research, the Indian History Congress, etc, turning these bodies into arenas of political and fi nancial manipulation, imposing a blinkered view of history on the discipline, deliberately sidelining, discriminating, ostracising and depriving the critics of professional opportunities since the 1970s. Such trifl ing remarks in frustration deserve no reply, but those with academic criticisms, ostensible though, have to be answered, for they try and debunk critical scholarship in historiography.
The Accusers
One thing that the assailants make clear through accusations is their hostility to Marxists and the leftists. But they seem to be failing to identify their enemies, for they think any historian critical of the Bharatiya Janata Party (BJP) govern-ment could be either a Marxist or a leftist. It appears from the allegations that any historian of theoretical approach is their enemy, for a main irritant to them in historiography is explanatory history, inevitably theoretical. A widely accepted fact that distinguishes professional his-tory is its intellectual depth. Another fact of equally wide acceptance about history is its inseparability from theory
that enables a historian to make the in-visible, visible and the inaudible, audi-ble. Theory is indispensable for a histo-rian to sensibly piece together, manage the bewilderingly complex old time data and draw critical insights into them. How can historians afford unfamiliarity to historical materialism if that is the only comprehensive theory available for interpreting the past processes, relations and structures? Reductionism is not the theory’s problem but that of the ap-proach, for in serious Marxist historio-graphy one sees interpretations strik-ingly differing from one another. Where is the question of “blinkered view” in a framework of comprehension that al-lows hypothetico-deductive investigation? What the assailants’ prejudice denotes is distaste for theory, the secret of sus-tained obsolescence from which their ignorant criticisms emanate.
Their academic criticisms against the “left” historians are in the form of alle-gations such as the reductionist approach to history, erasure of India’s knowledge systems, denial of the continuity and originality of India’s Hindu–Buddhist–Jain–Sikh culture, refusal to acknowl-edge the well-documented brutality of many Muslim rulers, neglect of tribal histories, biased use of sources, neglect of scientifi c data from palaeo-environ-mental to genetic studies, absence of professional ethics, pernicious imposition of legislated history, and promotion of contempt for cultural heritage.
The allegation that the Marxist historio graphy is tainted by “a reduc-tionist approach viewing the evolution of Indian society almost entirely through the prism of the caste system, emphasis-ing its mechanisms of exclusion while neglecting those of integration without which Indian society would have dis-integrated long ago,” exposes ignorance about Marx’s theory of social change, in which “class” has precedence over “caste.” Marxist historiography stresses on the function of caste as part of the fetters of productive relations, and systematically unveils the secret of integration. It does not neglect at all the role that caste played in enduring the contradictory
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 13
structure of the Indian society by contain-ing class struggle. Alas! They take pride about caste without which the Indian so-ciety “would have disintegrated long ago.”
Who has erased India’s knowledge systems? Those leftists/Marxists who tried to show that serious knowledge systems of traditional India had adhered to epistemic principles such as rationali-ty, objectivity, verifi ability, and notion of truth in their production or those philol-ogists who tried to mystify the origins of knowledge system by assigning them to extrasensory abilities and supernatural powers of sages? It is in the writings of the former, not exhaustively though, that we see critical inquiries unravelling the logical procedures behind the know ledge systems of early India (Chattopadhyaya 1977, 1986, 1991, 1996). What the accusers consider as erasure is the academic exer-cise in humanising the past know ledge systems by looking for the epistemic universals behind their production and on the basis of which characterising some of them axiomatic and some others.
The allegation of the leftist “denial of the continuity and originality of India’s Hindu–Buddhist–Jain–Sikh culture, ignor-ing the work of generations of Indian and Western Indologists” is based on methodological ignorance. What they mean by “continuity and originality” has to be examined against the source texts concerned and the methodological de-vices for using them for historical under-standing. I do not see anyone among the accusers to have cared for reading Romila Thapar’s analysis of the historical con-sciousness in texts from early times in India and recognising the need to know the form in which this conscious-ness is expressed in them (Thapar 2013). Instead of undertaking such a different exercise, some of them seem to under-stand the Ramayana, the Mahabharata and the Puranas as true history, despite their being composed over a period of time by multiple authors. They do not encounter the problem of their multiple versions and disparate periods, but in-stead, brand any scholar who talks about the plurality of textual versions, as a whole or in parts, as Western or Marxist historian. That the Buddhist Dasaratha Jataka and the Jain Paumachariyam
contradict the Valmiki Ramayana or that certain parts of the Mahabharata seen in Jatakas contradict with the Brahmanical version is not just a Western mis interpretation or Marxist erasing of continuity and originality of India’s past (Thapar 2013). The same applies to the contradictions appearing in the inscrip-tional texts. Similarly the fact that we cannot pinpoint any one of the Puranas as authentic is not the fallout of the leftist conspiracy. Accessing of history beyond such texts through intertextual analysis is a universally accepted procedure in the case of literary sources. It is evident from the allegations that even the Sanskrit scholars and text-based historians among the accusers are unaware of the scientifi c techniques of analysing texts. Least bothered about the text in terms of its variants, they do not require methods to confi rm the historicity, and imply that both historicity and history are irrelevant to them. Hardly do they seem to feel the need to think about the audience, the purpose and the patron-age of the text.
Allegations about the biased use of sources and promotion of contempt for cultural heritage actually stem from this basic methodological obsolescence. In fact, who stops them from historicising the Hindu identity, rationality, progres-siveness and legitimacy scientifi cally? Instead of making an idealistic call from the pulpit for “an unbiased and rigorous new historio graphy of India,” why are they not going ahead with their long-cherished project of rewriting India’s past. Why cry about the leftists’ neglect of advanced Indological researches in the last few decades, rather than taking on them all by themselves? If the so-called archaeo logists have developed alter native perspectives after consider-able research, the scholarly world would have accepted them. Why blame the leftists to have sidelined them rather than looking into what failed them in securing scholarly recognition?
Refusal and Neglect
The allegation of “refusal to acknowledge the well-documented brutality of many Muslim rulers” targets source-based empirical studies exposing the deliberate
exaggeration of wartime plunders as religious attacks of communal identity. Indeed such predatory campaigns were brutal and the historians, who sought to expose the hollowness of communal interpretations, had to be in a historio-graphical struggle for the cause of secu-larism. This is not to hush up the events of brutality but to unveil the actual his-torical context for checking the historio-graphically contingent communalism that unleashes acts of vengeance upon the present-day population that has nothing to do with the past events.
We owe the relative neglect of tribal histories to various factors, including the lack of data and promotion of methodo-logical sophistication for writing the history of the people without history (Misztal 2003; Wolf 2010). I do not think that the leftists can be singled out as responsible for it in any way, for the major part of the work already done goes not to the credit of Hindutva schol-ars (Singh 1985; Chaudhuri and Bando-padhyay 2004). Anyhow, has anyone among the accusers studied ‘India’s trib-al communities and their rich belief sys-tems and heritage? Who has studied the tribal cultures to enable the sweeping gen-eralisation that they have many things in common with the Hindu religion? Let us not talk about the neglect of scientifi c data, since the serious readership know how regional archaeo-metallurgical stud-ies are labelled as Indian with nothing Indian about them. It is explicit why the casteist and communal historians are interested in genetic studies.
All that is discussed so far, which underscores methodological preoccupa-tion, exposes the accusers’ total lack of professional ethics. It is largely due to their ignorance in social scientifi c meth-odology that they tend to denigrate those who use it for writing early Indian history, because it questions the Hindu communal distortion. They seem to be
available at
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly14
unaware of the process of the existing knowledge undergoing improvement or even replacement by new knowledge that is increasingly analytical, self-refl exive and critical. In fact, a high degree of refl exivity is inevitable for those indulging in the study of early Indian history. It is essential for them to be preoccupied in methodology, with-out which their know ledge base goes obsolete and criticisms become exhibits of ignorance.
Towards Legislating Fascism
Impairment of democracy, the inevitable consequence of capitalist development, has been progressing in the country for the last two decades, and slowly turning the democratic state into functional au-tocracy as a system of the corporates driven bureaucracy–political heads com-bine. The process is accelerated under techno-capitalism run by corporates, heavily dependent on the transaction of new knowledge in science and techno-logy, for enhanced accumulation through trading in intellectual property rights (Feenberg 1991; Perelman 2004). It has given rise to “corporatocracy,” a new type of governance that enmeshes and destroys democracy (Suarez-Villa 2012). In India corporates have succeeded in intensifying their state control under the dominance of the BJP that mobilises people’s acceptance of functional auto-cracy through the rhetoric of national development and communal cultural preparations by penetrating into all bodies of educational policymaking in general and historical research in particular. It turns the people into uncritical masses moved by deadly sentiments of caste and religion, which degenerate nation-alism itself into false consciousness. An immediate manifestation of it is social intolerance of the de facto type, the clearest symptom of advanced fascist cultural preparation.
A state-sponsored public attack on secular historiography is natural in the context, for it strengthens critical con-sciousness of the people by replacing sentimental narration of the past trig-gering antiquarian interests, with ex-planatory narration of the past provid-ing insights into the problems of the
present. While the former telling the story of the past glory kindles people’s pride, the latter educates them about the past misery due to relations of exploita-tion, institutions of oppression and struc-tures of domination. One engenders a politically disengaging mass of people, while the other promotes the formation of a political people craving for emanci-pation. The allegations in question are raised from the former’s camp that deals with the superfi cial aspects of the disci-pline, while the alleged are in the latter’s camp that deals with its deeper aspects. It shows the inevitable ontological con-vergence of communal essentialism and revivalism on the politics of fascism (Bourdieu 1991). Both the Hindu as well as Muslim communalists are ideologi-cally in the same track of ungrounded history, for distorted history is the only ideological means of self-justifi cation for them (Chandra 2008). Their mutual exclusionism is based on the question, who should rule India? It is interesting that the Sangh Parivar academics in their statement tend to reject attempts to portray India’s past as a glorious and perfect golden age.
Intellectuals’ reaction against intoler-ance and the Sangh Parivar academics’
attack on the former’s public statement have to be seen against the background of the threat to democracy.
REFERENCES
Bourdieu, Pierre (1991): The Political Ontology of Martin Heidegger, Stanford: Stanford University Press, pp 3–4.
Chandra, Bipan (2008): Communalism in Modern India, Har Anand Publishers, Delhi.
Chattopadhyaya, D (1977): Science and Society in Ancient India, Calcutta: K P Bagchi and Company.
— (1986): History of Science and Technology in Ancient India: The Beginnings, Calcutta: Firma KLM, Vol 1.
— (1991): History of Science and Technology in Ancient India: Formation of the Theoretical Fundamentals of Natural Science, Vol 2.
— (1996): History of Science and Technology in An-cient India: Astro nomy, Science and Society, Vol 3.
Chaudhuri, B B and A Bandopadhyay (eds) (2004): Tribes, Forest and Social formation in Indian History, New Delhi: Manohar.
Feenberg, A (1991): Critical Theory of Technology, London: Oxford University Press. Revised edition with the title, Transforming Technology, 2002.
Misztal, B (2003): Theories of Social Remembering, Maidenhead, UK: Open University Press.
Perelman, M (2004): Steal This Idea: Intellectual Property Rights and the Corporate Confi scation of Creativity, London: Palgrave Macmillan Publishers.
Singh, K S (1985): Tribal Society in India: An An-thropo-Historical Perspective, Delhi: Manohar.
Suarez-Villa, L (2012): Globalisation and Techno-Capitalism, UK: Ashgate Publishing Co.
Thapar, R (2013): The Past before Us: Historical Tra-ditions of Early North India, Harvard: Harvard University Press.
Wolf, E (2010): Europe and the People Without History, University of California Press, second revised edition, California.
Dr Arun Kumar Banerji Fellowship Programme
Applications are invited from students for the Arun Kumar Banerji Fellowship Programme.
The Fellowship has been named after the late Dr Arun Kumar Banerji, a well-known economic
historian and former Executive Director of the Reserve Bank of India.
The programme has been funded by a generous endowment provided by Mrs Usha Banerji.
Under this Programme, two students pursuing post-graduate (PG) or Doctoral degree in
economics or public policy are awarded summer internship at the EPW Research Foundation,
Mumbai, for a period up to three months each starting from April 2016.
The students will work under the direct supervision of a senior staff at EPWRF. Though
undertaking assigned work, they will be encouraged to do research on an issue bordering on
any aspect of India’s or any other country’s economic history. They will also be encouraged to
submit a manuscript to Economic & Political Weekly for possible publication.
The awardees will be entitled to an internship amount of Rs. 15,000 each per month. While
candidates have to make own arrangements for their stay at Mumbai, travel expenses (by
train, 3rd AC) will be reimbursed. Interested candidates should send their applications to the
Director, EPW Research Foundation, C-212 Akurli Industrial Estate, Akurli Road, Kandivli (East),
Mumbai–400 101 or email to [email protected], along with a reference letter from the
head of the institution/department where they are studying. Applications should reach by
March 15, 2016.
COMMENTARY
Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 15
Railways for Daily CommutersOptions for Rural and Semi-urban India
Sumit Chaturvedi
For commuting to new towns and cities which are facing the challenges of urbanisation, a viable transport option is the use of the railways’ Mainline Electric Multiple Units, which could, if properly planned, provide seamless connectivity.
When in December 2015, on the occasion of the birthday of Atal Bihari Vajpayee, the former
Prime Minister of India, a Diesel Electric Multiple Unit (DEMU) train was launched from his home village Batesar, it marked the fi rst time that the village had wit-nessed an operational train, station or a track. This kind of patronage is charac-teristic of personality politics in India. However, the message from this much celebrated train launch is that many villages and remote areas still lack basic connectivity through rail infrastruc-ture—the lifeline of Indian transporta-tion, especially for those commuting for work.
National Train Usage Statistics
A look at the train usage statistics for “other workers” by distance from resi-dence to place of work, in the Census of 2011 data,1 reveals that at the all-India level, rail remains the sixth most impor-tant mode of transport for distances up to 10 km, the fourth most important between 11 km and 30 km and beyond 30 km it becomes the second most important mode of transport for work (Table 1).
Table 1 also shows the similarities and differences between rural and urban India on the relative importance of rail in pas-senger transport. The important point is that train usage increases beyond distance of 11 km, sharply in urban areas and gradually in rural areas.
The other message from the Batesar train launch is the signifi cance of Main-line Electric Multiple Unit (MEMU) trains in rural and semi-urban areas for the commuting population. The DEMU train launched from Batesar, that is yet to be featured in the offi cial list of trains2, is proposed to
run from Agra to Etawah, a stretch of about 136 km with stops scheduled at stations not very far apart. The maximum distance between any two consecutive stops is about 15 km and the minimum distance is 5.3 km.3 Most of these stations are villages or towns. A look at trains from any big or small city will reveal many such MEMU or DEMU trains catering to the rural, semi-urban and urban commuters.
However these trains do not enjoy much attention from a policy perspective. For instance, MEMU trains are still not included in the offi cial railways time table. Yet better connectivity through these trains in rural areas can only increase usage of trains as a mode of transport over medium to longer distances and can reduce the reliance of commuters upon more accident-prone, and more strenuous modes of transportation such as motorised two-wheelers and bicycles.
Metro and Suburban Rail
Most intellectual and economic invest-ment in urban rail transportation is currently directed towards the metro rail sector. Metro rail, a multigraded rail system (that is, built at different levels) is meant for intra-city, point-to-point transportation on relatively smaller dis-tances. But as h as already been illustrated through national commuter statistics, trains are not preferred over shorter distances. This becomes clearer when one looks at the commuter statistics of the National Capital Region (NCR) from 2011 Census data, an area where metro rail service began operations in 2002 (Table 2, p 16). Train usage in the NCR remains only the sixth highest for distances up to 10 km and fourth highest between 11 km and 50 km. The most taken mode of transport in the
Sumit Chaturvedi ([email protected]) is an Agra-based independent journalist and maintains a news and views blog-site OpinionTandoor.in.
Table 1: Train Usage Statistics for India (Urban & Rural)Distances Train Users Rank among Train Users Rank among Train Users Rank among(km) across Modes of across India Modes of across India Modes of India Transport (Rural) Transport (Urban) Transport (All India) (Rural) (Urban)
0–1 2,42,561 6th 79,471 6th 1,63,090 6th
2–5 4,90,647 6th 1,10,812 6th 3,79,835 6th
6–10 6,92,189 6th 1,15,119 6th 5,77,070 6th
11–20 10,59,169 4th 1,61,634 6th 8,97,535 3rd
21–30 8,57,873 4th 1,64,277 4th 6,93,596 3rd
31–50 11,47,380 2nd 3,19,251 3rd 8,28,129 2nd
50+ 19,29,085 2nd 10,00,987 2nd 9,28,098 1st Source: Census 2011.
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly16
national capital is the bus, the other major mode of public transport.
Still Delhi and many other cities con-tinue to invest in the metro rail sector. There are at least 20 cities with 40 metro projects which are either underway, in the pipeline or at the proposal stage in the country (Khandelwal and Narayanan 2013: 18). The metro sector in India has become an international investment and business destination. Japan, France, Canada and Britain have facilitated the infl ow of funds in form of debt and equity and contributed 87.78%, 10.98%, 0.85% and 0.40% of the total international funding. In total these four countries have contributed Rs 71,716.32 crore to the Indian metro sector (Khandelwal and Narayanan 2013: 33).
The building of metros has also become a big part of media campaigns of incum-bent governments in order to highlight, in their view, the developments in their respective states. The demand for metro projects has escalated so much that in 2013 the Government of India had to draft a consolidated policy for metro rail projects anticipating proposals from about 34 cities with million plus populations (Singh 2013).
However metro rail is very expensive to build and places a lot of strain upon the urban infrastructure and environ-ment of cities. The costs for various metro projects, under way in different cities, range from Rs 2,356 crore to Rs 42,710 crore (Bhandari 2015). While the cost—at prices cited at the time—for building underground rail network is Rs 2,000–2,500 million per km, those for building elevated rail network is around Rs 1,500 million per km (Mohan 2008: 51).
The other option for mass rapid rail transit is the suburban railway, usually
built at grade (ground level) except in Chennai where a section of the Mass Rapid Transit System (MRTS) has been built on an elevated corridor and the Kolkata metro which has been included in the suburban sector despite having an under-ground presence. The suburban railway has recorded much better usage than the metro rail in terms of daily ridership
Looking at train usage in Mumbai, with a robust suburban rail network, it is found that for distances up to 5 km train users remain a close second to bus users and beyond this distance trains are the most used mode of transportation in the metropolitan and suburban areas. This is also refl ected in the staggering fi gures of daily ridership of 7.4 million passen-gers on the Mumbai suburban, which is almost three times that of the Delhi met-ro (Pricewaterhouse Coopers 2014: 13).
Suburban trains also use Electric Multiple Unit (EMU) coaches like the MEMUs. The two differ in that the former covers shorter distances mostly in urban and suburban areas, while the latter usually connect adjacent or nearby cities covering small towns and rural stations over longer stretches. Also MEMUs have less frequency than suburban trains, usually plying once a day to and fro between two terminal stations, unlike suburban trains which make this journey many times a day.
However, suburban trains have their own set of problems. First, they currently incur huge losses, much more than metro trains (Chaturvedi 2015). In some analyses the reason for the losses has been attri-buted to lower utilisation of non-fare box revenue sources by the suburban railway. This share is signifi cantly higher in more fi nancially successful rail transportation systems all over the world, such as Delhi Metro which earns 20% of its revenue from non-fare box sources (Pricewater-house Coopers 2014: 14). Second, unlike Mumbai most cities do not have dedicated suburban railway corridors to avoid congestion on main lines.
MEMU Trains Option
New towns and cities are facing the challenges of rapid urbanisation. Ideally, urbanisation should be more evenly distributed such that the need for
commuting is reduced as it is not the most ideal of living situations. But with no signs of this trend reversing, better options for commuting need to be explored, especially on longer distances. Trains are an important option for mass transit since they cut the commute time signifi cantly. Metro rail, as already sug-gested, is extremely expensive and con-sidering that trains are preferred less over shorter distances, they do not pro-vide a tenable solution. Suburban trains, on the other hand, face fi nancial issues and in order to avoid congestion on mainlines require dedicated corridors.
MEMU trains in many ways provide an adequate alternative for the newer cities since they provide solutions to an extent to the challenges listed here. First, these MEMU trains already plying on many routes across the country can provide a suitable option, especially for peak hours, with an adjustable frequency based on demands. This will also reduce the burden of carrying the daily commuters which is borne by non-suburban passenger trains. Second, MEMU trains can make good use of existing railway lines to travel across urban, suburban and rural areas and provide seamless connectivity. This makes them less expensive, espe-cially for newer cities which will increas-ingly realise the need to invest in their infrastructure.
A brief look at previous few years’ railway budgets shows that MEMU/DEMU trains are regularly introduced across many routes but this sector lacks a coherent policy perspective. In the urban transport policy the use of EMU trains is limited to the suburban sector.
MEMU trains need to be integrated into urban transportation policy by making some basic adjustments to the outlook on urban transportation. First, the scope of urban transportation needs to be expanded to include not only those living within the city limits but also those who travel from outside from rural, semi-urban and peripheral urban areas for work and other activities. Second, it needs to be acknowledged that train usage is preferred for travel over long distances and policies must be made accordingly. Huge investments in rail transportation for small and
Table 2: Train Usage Statistics for Mumbai and DelhiDistances Train Users Rank among Train Users Rank among(km) in Delhi-NCR Modes of in Mumbai Modes of Transport Transport (Delhi-NCR) (Mumbai)
0–1 4,429 6th 9,242 2nd
2–5 13,456 6th 40,586 2nd
6–10 25,941 6th 80,232 1st
11–20 54,897 4th 85,075 1st
21–30 30,569 4th 32,573 1st
31–50 17,705 4th 18,575 1st
50+ 7,790 3rd 6,374 1st Source: Census 2011.
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 17
medium distances must be rethought, especially for upcoming cities.
For a developing country, the optimum utilisation of the existing infrastructure and expansion of basic public services such as transportation are crucial policy objectives. Evolving better utilisation of MEMU trains satisfi es both these condi-tions provided transportation is treated as a matter of infrastructure and not an investment opportunity in itself.
notes
1 “Other Workers” are defi ned in the census as those workers who have been engaged in some economic activity but are not cultivators or
agricultural labourers or in Household Industry. Source of data: Census 2011 website- B-28: http://www.censusindia.gov.in/2011census/ B-series/B_28.html.
2 A quick search in the online train enquiry sys-tem of the Indian railways however still doesn’t feature the 71909/10 MEMU between Agra and Etawah, http://enquiry.indianrail.gov.in/ntes/ (accessed on 19 January 2016).
3 Information on MEMU train between Agra and Etawah numbered 71909/10 is sourced from India Rail Info website; http://indiarailinfo.com/train/agra-cantt-etawah-demu-via-bates-hwar-71909-agc-to-etw/39515/450/707 (acc e s-sed on 19 January 2016).
References
Bhandari, Amit (2015): “India’s Great Metro-Rail Opportunity,” 20 January, India Spend, http://www.indiaspend.com/cover-story/indias-great-me t r o -rail-opportunity-40950.
Chaturvedi, Sumit (2015): “Why India’s Metro, Suburban Railways Should Merge,” 7 Septem-ber, India Spend, http://www.indiaspend.com/cover-story/why-indias-metro-suburban-railways-s h o u l d -merge-37372.
Khandelwal, Amit and Vijay Narayanan (2013): In-dia Metros: A High Value Opportunity for the UK Rail Sector, London: UK Trade and Investment.
Mohan, Dinesh (2008): “Mythologies, Metro Rail Systems and Future Urban Transport,” Economic & Political Weekly, Vol 43, No 4, pp 41–53.
Pricewaterhouse Coopers (2014): Revenue Maximiz-ing Study in Particular for Non-fare Box Revenues with Affordability Studies: Executive Summary, http://www.mrvc.indianrailways.gov.in/wo r-ks/uploads/File/TA3-%20Executive%20Sum-mary(1)(1).pdf, accessed on 21 August 2015.
Singh, Vijaita (2013): “Govt Drafts New Policy for Metro Rail Projects” 29 January, Indian Ex-press, http://archive.indianexpress.com/ne w s/govt-d rafts-new-policy-for-metro-rail-proj e c t s / 1-0 6 6 1 3 5 /
COMMENTARY
Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 17
Judiciary and the Destruction of Chennai’s Wetlands
R Seenivasan
This article investigates the impact of court verdicts on Chennai’s canals, tanks and related wetlands. It discusses three interlinked cases surrounding Buckingham Canal area and argues that the verdicts in these cases allowed the administration to destroy sophisticated water systems. It also argues that these waterbodies could have mitigated, if not prevented, the November–December 2015 fl oods in Chennai.
The proceedings of a high profi le seminar organised in 2010 by the Chennai Metropolitan Develop-
ment Authority (CMDA) began with the following statement:
In spite of the fact that the CMA [Chennai Metropolitan Area] has a long drainage and extensive water storage system of tanks and reservoirs, it suffers from annual fl ooding of developed urban areas. At present most of these water bodies are not in their original state (CMDA 2010).
By now, many in Chennai, and else-where, realise the signifi cance of this statement. The loss and damages to wet-lands (tanks, ponds, channels, canals, rivers, marshes and backwaters) led to the fl oods of November–December 2015. Most news items focused on encroach-ment of waterbodies and rivers. They blamed the fl ood on unplanned urban development—especially the housing boom—and saw it as an instance of administrative failure. However, most critics are silent on the judiciary’s role.
Shekar and Thomas (2015) have ob-served that, in some ways, the executive and judiciary have “abetted and even partaken in the acquisition and degra-dation of wetlands and water bodies.”
This article discusses three cases adju-dicated by the Madras High Court and Supreme Court to highlight how court verdicts fostered the destruction of wa-terbodies. These cases pertain to build-ing railways and shopping complexes over defunct village tanks, and raising housing colonies for resettled slum dwellers on defunct tank beds and backwaters. The verdicts led to the obliteration of waterbodies.
Before proceeding, some simple facts need to be told about Chennai and its waterbodies. Present-day Chennai is a city made out of several villages that were once thriving paddy fi elds fed by a series of tanks. This means, that just as in paddy fi elds, every bit of excess water could easily be drained without causing much damage. The tanks (estimated to be in the order of hundreds) in and around the present city as well as surrounding watersheds from Tamil Nadu and An d h r a Pradesh are entirely man-made—over the last two millennia.
Several channels and streams inside the city have been aligned to suit the needs of fi lling up and draining down tanks and ponds. Chennai’s four rivers, Arani, Kortalaiyar, Cooum and Adyar, were also linked up with many man-made canals and channels to bring in and carry away the run-off. Buckingham Canal, running across the city, connected several canals and rivers, thereby playing an important role in draining water. According to a paper presented at the CMDA seminar (Kanthimathinathan 2010: 180), around
R Seenivasan ([email protected]) works for DHAN Foundation, Madurai.
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly18
29% of the city’s storm water drained into the canal. Thus in many ways, the canal, though artifi cial, is as important as the natural rivers.
Case 1: Buckingham Canal Case
Exnora International v The Government of Tamil Nadu (2006) was an early case that demonstrated the need to use the writs of the high court to prevent partial obliteration of the Buckingham Canal. The canal was originally laid for navigation in early 19th century. It had an average width of 25 m with aide bunds and inte-grated many local streams, backwaters, artifi cial and natural river channels. Since the 1960s, the canal ceased to be used for transportation, but carried water during fl oods. The Chennai Mass Rapid Transit System or MRTS train line is laid on tracks that were carried on huge pillars erected inside the canal. Eleven train stations were built on the edges and embankments of the canal.
In 1996, when the constructions were underway, a fl ood affected some parts of Chennai. Newspapers reported that the pillars, constructions, and debris obstructed the fl ow of water causing fl oods. Exnora International, a voluntary organisation, objected to this construc-tion and fi led a public interest litigation (PIL) in the Madras High Court, arguing that there is a direct linkage between the fl oods and the process of oblitera-tion of the canal. It also argued that the connected tanks, ponds and channels in and around Chennai were undergoing similar destruction.
Exnora’s understanding was based on known science and law. The science is that any obstruction combined with a reduction of width of a canal creates heading up of water which leads to fl oods, and connected waterbodies gets less and less water there-by not performing their role of fl ood mode-ration and groundwater rejuvenation. The law is that waterworks in general and tanks and canals in specifi c are protected from destructions like this by the Revenue Board Standing Orders (BSO).
Exnora argued in the court that: fi rst, the pillars and stations for the train line obstructed water fl ow and created fl ooding within the city; second, the government did not follow the time-tested
BSO, town planning laws, and coastal zone regulations; and third, the project would destroy the Pallikaranai tank—a large water body at the edge of the city—by not allowing enough water to reach it. The essence of the government replies were: fi rst, the fl oods are not created by the obstructions that ensued as a result of the train line but by the excessive rainfall; second, the train line project was done for the larger “public interest” to provide a rapid transport and hence the laws protecting the waterbodies and channels need not be followed; and third, the Pallikaranai tank lands and marshes linked by the canal could not be preserved anymore because of rapid urbanisation.
None of the serious issues raised about the wetland ecology, need for preserving waterbodies and the canal were answered by the government. However, the court accepted the govern-ment arguments and dismissed the case after 10 years of hopeless proceedings. The promises made by government de-partments and railways for protecting canal and waterbodies were accepted at their face value. The court borrowed from a previous judgment (O Fernandes v Tamil Nadu Pollution Control Board 2004) and observed, “Our main aim must be to rapidly industrialize, and [the] protec-tion of environment must be regarded as only incidental to this main aim, and not itself the main aim” (emphasis added).
The verdict allowed the executive to destroy a sophisticated canal system. It resulted in permanently reducing the width of the canal. The canal became permanently restricted to a width of 10 m from the original average of 25 m due to the MRTS train line. A paper at the CMDA seminar (Kanthimathinathan 20 1 0 : 182) noted that this is one of the “zones of new problems” that led to the reduction of its fl ood carrying capacity. In 2014, Public Works Department (PWD) estimated that the canal may carry only 600 cusecs of water in the densely populated stretch of the city as against its original capacity of 5,600 cusecs (Hindu 2015).
The high court quoted the Supreme Court’s understanding in Susetha v State of Tamil Nadu, 2006 on the tanks in
support of their decision. Para 22 of the Buckingham Canal judgment reads:
Water bodies are required to be retained. Such requirement is envisaged not only in view of the fact that the right to water as also quality life are envisaged under Art 21 of the Constitution of India, but also in view of the fact that the same has been recognised in Arts 47 and 45–A of the Constitution of India. Art 51–A of the Constitution of India… fur-thermore makes a fundamental duty of very citizen to protect and improve the natural environment including forests, lakes, rivers and wildlife. But this principle applies only to natural water storage resources. The same principle cannot be applied in relation to artifi cial tanks (Exnora International v The Government of Tamil Nadu 2006; emphasis added).
Back to Basics
To understand this question of why thousands of “artifi cial” tanks came into existence to store “natural water,” a basic lesson in geography and hydrology of India is necessary. Most parts of India are monsoon dependent. This means water is available from the rains only during that period. Being an area without any rivers of importance, the southern part of the country is forced to harvest the rains and store the downpours from less than 30 days of contributing rainfall. This is the reason states like Tamil Nadu, Andhra Pradesh and Karnataka have thousands of tanks, ponds and channels—all arti-fi cial. The entire landscape is inter-spersed with water systems of all sizes, shapes and types.
These tanks fi nd mention in numer-ous poems and songs from the Sangam era to today’s fi lms. Saints, travellers, engineers, administrators, scientists and even the jurists have understood this phenomenon of “artifi cial.” For exam-ple, J H Nelson, an administrator, a judge and also a legal scholar described this in some details in his Madura Coun-try Manual. One of his remarks is worth recalling:
There are no natural lakes or pools in any part of Madurai District. Wherever, water may be, seen, it is quite sure to be water that has been stored up artifi cially: and if he goes from the Palanis to the sea coast, a traveller will never come across a natural reservoir of even the very smallest size (Nelson 1868: 20, part I).
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 19
This observation is true of many dis-tricts in South India including the city of Chennai. So, judging artifi cial tanks to be of low importance is very strange not only in law but in everydayness. Let us see that judgment in some detail in the next section.
Case 2: Protecting Village Tanks
The immediate fallout of the Buckingham Canal case was the removal of the slum dwellers from the banks and packing them off to Okkiyam Thoraipakkam, a v ill age surrounded by different types of inland and coastal wetlands. This was formerly a tank-irrigated village sur r o-un d e d by many tanks lying in another part of the city. A court action was initi-ated by Susetha Kumaradev—the then ward councillor of Thoraipakkam who since then has become a crusader of sorts for wetlands—when the govern-ment wanted to dismantle a tank named Retteri in this village. This waterbody is marked as a “tank poromboke” in revenue records and remained as a temple tank inside the village that was fast developing. Poromboke in Tamil or Telugu generally means a land meant for communal purpose wherein the right of ownership rests with the government, and is exer-cised by the land revenue department. Some of these functions are vested with other departments or panchayats. In this case, the said tank was vested with the village panchayat as a temple tank.
The highways department took over this village tank to build a shopping complex. Many villagers resented this and went to the high court. The village gramasabha on 26 January 2006 resolved to develop the tank and prevent its dis-mantling. The Hindu (2006) reported:
...Ward councillor Susetha in her public interest litigation petition said, ‘Okkiyam Thoraipakkam village was once a water surplus village having 20 tanks... but today has only fi ve tanks, that too, in a bad shape... The existing tank must be protected and preserved.’... Ms Susetha [also] stated ‘If the tank was desilted and maintained prop-erly... it would prevent rain water from in-undating the residential areas of Okkiyam–Thoraipakkam village.
Thus, the high court was told that these tanks are important, required to control fl oods, and needed to keep
groundwater levels. The court asked for a report from the Anna University’s Centre for Water Resources (CWR). The essence of CWR’s report is that the tank is fi lled with debris, weeds and sewage and may not recharge groundwater. Instead of mending the tank, the high court agreed with the government d e c i s-ion to dismantle it. When the villagers appealed to the Supreme Court, the apex court agreed with the high court and invoked a new principle of “artifi cial and natural” in assessing the impor-tance of waterbodies.
The Supreme Court referred to an ear-lier verdict pertaining to Kolleru, a large lake in Andhra Pradesh. It attempted to compare the lake with Susetha’s village tank. This comparison was misleading because Kolleru, although located in a natural depression, has also been shaped by human hand since several irrigation and river channels drain into it. There-fore it cannot be called fully “natural” waterbody. Fortunately, the then bench had come to the rescue of Kolleru and ordered it to be protected. However, in Susetha’s case the judges said, “The same principle, in our opinion, cannot be applied in relation to artifi cial tanks” (Susetha v State of Tamil Nadu, 2006).
The disaster invited by this case law was immediate. The Buckingham Canal judgment of the Madras High Court cited this in favour of the government action. Further, the case law has potential to destroy the future of half a million tanks and ponds in this country because all of them are artifi cial.
Case 3: Protecting a Tank Bed
Susetha v The Union of India 2010 is another case about preventing the conver-sion of a defunct wetland. Susetha’s case this time was to challenge the reclassifi cation of a wetland and its subsequent conversion into a site for building tenements. Most of these tene-ments were constructed by the Tamil Nadu Slum Clearance Board (TNSCB) for those evicted from slums including those from the banks of the Buckingham Canal. The government argued that the place was not a proper wetland but an “assessed waste wetland,” and it has powers to change the classifi cation. It is
true that the BSO gives such powers to the government; however a due process has to be followed. Susetha’s argument was that such a process was not followed.
Leaving the legal arguments aside, understanding the logic behind the numerous land revenue classifi cations becomes necessary. In Tamil Nadu, all useful lands, according to BSO, are cate-gorised into wet and dry. “Wet” are those that get irrigated by tanks or rivers or canals. Some of them are categorised “waste wetlands.” This bizarre classifi -cation is a product of colonial revenue authorities aimed to collect graded land revenue from every bit of land. The court appointed an expert committee to verify Susetha’s claims.
The experts, beyond verifying the simple facts about the disputed land’s status as a wetland, described the govern-ment actions responsible for fl oods, water scarcity, salinity and sea water ingression. They warned about the impending eco-logical disaster to the natural environ-ment including fl oods and water short-ages. The court found fault with this com-mittee of experts comprising two profes-sors in ecology and water resources, and a civil servant for “overstretching” their mandate. The judges felt the committee needlessly used ecology, environment, hydrological sciences and Tamil literature.
Eventually, the court preferred a dic-tionary understanding of a “marshy land” and concluded the area is not worthy of revival or protection as a wetland. As in earlier occasions, it recognised the powers of the government and considered the “larger public interest” the case presented. That public interest was to resettle the slum dwellers in a chronically fl ood- affected area.
Conclusions
During the massive fl oods of November–December 2015, the Buckingham Canal did not drain water as it should be mainly because of the obstructions and restric-tions created by the rail line and train stations. For the same reason, several other canals and streams that drained into Buckingham Canal inside the city overfl owed resulting in fl oods and chaos everywhere. Vital installations including the information technology corridor got
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly20
submerged, and transportation came to a grinding halt. In the same way, Okkiyam Thoraipakkam and Pallikaranai area which are known to be fl ood-prone gained further notoriety of getting submerged for days together. The petitioners and some of the experts in these three court cases had warned of such eventualities.
References
Chennai Metropolitan Development Authority (C M DA) (2010): Seminar on Waterways in Chennai, 4 and 5 March, proceedings and
recommendations, available at: http://www.cmdachennai.gov.in/pdfs/SeminarOnWater-ways/1.pdf, acc e s sed on 25 December 2015.
Exnora International v The Government of Tamil Nadu (2006): available at http://indiankanoon.org/doc/945513/, accessed on 25 December 2015.
Hindu (2006): “Resolution on Tank Protection Pas s-ed,” Hindu, 4 February, http://www.thehindu.com/todays-paper/tp-nationa l/tp-tamilnadu/resolution-on-tank-protection-passed/artic l e 3- 173872.ece, accessed on 25 December 2015.
— (2015): “After a Decade Buckingham Canal Gets Cleanup,” http://www.thehindu.com/ne w-s/ci ties/chennai/after-a-decade-buckingham-c-a n al-gets-cleanup/article5754287.ece, acce s s e d o n 25 December 2015.
Kanthimathinathan, T T (2010): “Waterways in Chennai,” http://www.cmdachennai.gov.in/pd f s/
SeminarOnWaterways/5.pdf, accessed on 25 December 2015.
Nelson, J H (1868): The Madura Country, Madras: Printed at the Asylum Press.
O Fernandes v Tamil Nadu Pollution Control Board (2004): available at http://indiankanoon.org/doc/567380/, accessed on 25 December 2015.
Shekar, Satyarupa and Madonna Thomas (2015): “Chennai’s Rain Check: Fifteen Years and Counting,” Economic & Political Weekly, No 49, 19–21 December.
Susetha v State of Tamil Nadu (2006): available at: http://indiankanoon.org/doc/1223975/, acces-sed on 25 December 2015.
Susetha v Union of India (2010) Madras High Court, available at http://indiankanoon.org/doc /1 9 0 - 8201/, accessed on 25 December 2015.
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Assertions in South China Sea China’s Stance on International Law
Kiran Mohan V
This article analyses China’s stance on international law against the backdrop of the Permanent Court of Arbitration, constituted to adjudicate on the claims of Philippines in South China Sea. It argues that China’s claims about respecting international law will be taken seriously only if the country participates meaningfully in international adjudication of boundary disputes with its neighbouring states.
On 29 October 2015, the Perma-nent Court of Arbitration, consti-tuted to adjudicate on the claims
of Philippines in South China Sea, de-cided that the country was well within its rights in fi ling the case. Ignoring the clear provisions of Article 288(4) of the United Nations Convention on the Law of the Sea (UNCLOS), China rejected the verdict. But it still chose to haphazardly assert its perceived rights under UNCLOS to justify its stance.1 It seems China is grappling with ways to fi t in the modern international law, which is rooted in Westphalian conceptions, without ap-pearing to compromise its long-held sceptical views on international law—it has held such views since People’s Republic of China (PRC) came into exist-ence in 1949.
Contrastingly, China has always held that international law is an instrument to further a nation state’s foreign policy—that international law is to be in service of a state’s interests. It has sought to use it to buttress its “peaceful rise” narrative. China’s approach, given its unitary set-up and lack of separation of powers, is entirely dictated by its central executive and is always in con-sonance with its foreign policy. It is the interplay of these two strands of think-ing that prompts its selective rejection
and parochial interpretation of interna-tional law, a grand departure from its approach till 1978.
From Outlier to Active Player: PRC
PRC began as a staunch challenger, op-ponent to traditional international law. Like many newly independent states, China saw itself in the periphery of a world system dictated by the so-called “core” nation states. China, even though never a colony, has been subject to a long history of imperialist manipulations—it was more like an international colony. The euphemism “cutting the Chinese melon” rightly captures its past punctu-ated by a series of “unequal” treaties. This experience, along with the Marxist ideology, shaped its attitude towards international law during its formative years and prompted it to reject inter-national adjudication. It is only in 1978 that the Chinese leadership thought of accepting the importance of inter-national law, albeit in a limited fashion. This is primarily in response to the opening of the Chinese economy. It was reported that even a single scholarly piece on international law was published in China for around 12 years—between 1966 and 1978—when study of inter-national law was suspended (Chiu, Hungdah 1988).
Fast forward to 2015, Chinese univer-sities produce high quality research in international law. International law, especially trade and investment laws, are increasingly being pursued by Chinese students at home and abroad. Since it joined the World Trade Organization (WTO) in 2001, China is an active litigant
Kiran Mohan V ([email protected])is Legal Offi cer at Asian–African Legal Consultative Organization, New Delhi.
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 21
in trade and investment forums. Now its rejection is limited to non-commercial, non-economic issues. The state leader-ship even while rejecting the third party adjudication on boundary issues in con-formity with its long-standing attitude has indirectly responded to the legal arguments brought forth by the oppos-ing party in these forums—like the position paper on South China Sea it released in December 2014 in response to the Philippines’ initiating arbitral pro-ceedings against them in the matter.2
In the position paper, China rejected to the jurisdiction of the court and sought to justify its stand citing gaps in UNCLOS—that territorial sovereignty is not a matter covered under UNCLOS, the determination of which, according to China, forms the crux of the matter to be decided. The Chinese argument on the extent of its territorial sovereignty over the South China Sea islands is based on its “historical rights” which it claims UNCLOS does not address. As is clear now, the court thinks otherwise.
Territorial Sovereignty
China gives immense importance to the concept of sovereignty in its internation-al rhetoric and freely employs the con-cept in its foreign policy statements. Some Chinese scholars like Bing Bing Jia (2013: 348–48) have even suggested that sovereignty’s pre-eminence and central-ity to international law is underappreci-ated outside China. But with the Chinese assertions in South China Sea it has become clear that Chinese would like to practise their home-grown interpretation of territorial sovereignty. Its detractors allege that Chinese conception of sover-eignty is derived from its antecedents—its history as the “middle kingdom” which extended to Korean and Japanese peninsulas. They see Chinese assertions in South China Sea in the past few years as a part of meticulously tailored, gradually escalating coercive “salami-slicing” tactics to restore the so-called middle kingdom regional order (Yoon 2014). This strategy may also serve to counter the Asia pivot strategy of the United States (US). Parallels with Monroe Doctrine, which the US declared to check Europeans from interfering in
the seas that it considered as its back-yard, is inescapable here. Nevertheless, the US of 1823 hardly had a credible navy to enforce its assertions and was dependent on its approval by Great Britain. In contrast, the PRC of 21st century owns the mightiest navy in Asia to enforce its supremacy in its adjoining waters.
While the unilateral declaration of Air Defense Identifi cation Zones (ADIZ) in East China Sea in 2013 was not widely anticipated, analysts are predicting simi lar actions in South China Sea, especially after the attempts of the US seemingly to pierce the veil of the so-called Chinese policy of “strategic ambiguity” as regards the extent of its sovereign claims. A state can declare ADIZ beyond its sovereign territory in pursuance of ensuring national security and its legality in international law is predicated on inherent right of a state to self-defence which is a customary right enshrined in Article 51 of the UN Char-ter. A natural corollary is that its appli-cation is subjected to the rules of neces-sity and proportionality. However, Chi-na appears to reframe the concept of ADIZ as an extension of its maritime jurisdiction based on territorial sover-eignty. If its declaration of AIDZ over large swathes of the East China Sea is any precedent, China may keep princi-ples of necessity and proportionality in the back-burner while deciding on its extent in South China Sea.
Similarly, China is assertive about its own version of freedom of navigation which it reiterated in the wake of the recent freedom of navigation (FoN) operations of the US. China believes that military vessels have to follow rules of innocent passage even in exclusive eco-nomic zone (EEZ) which extends up to 200 nautical miles from the baseline. Con-versely, preponderance of state practice and scholarly opinion suggests that mili-tary vessels can freely transverse and operate in EEZ without the permission of the coastal state. This includes sur-veillance of the coastal state. It is only in the territorial seas that any overt military acti vity is precluded (Rourke 2015). It has been argued that this is another Chinese effort to fi ll the gaps in
customary international law to justify its actions and reactions in South China Sea (Almond 2015). In fact, many states, including its coastal neighbours, Malaysia and Vietnam, have started to follow this position and interpret coastal states’ rights on these lines (Rourke 2015).
The Defender and Promoter
While Chinese assertions in South China Sea, hinged on national interest, domi-nate one strand of its approach towards international law, the second strand is animated by the increasing desire of its central executive to portray China as a responsible regional and global leader and a law-abiding citizen among the community of states. Every state wants to be seen on the right side of the law. What is unique about China is the money and concentrated effort it puts in the process. In the recent years, China hardly missed any chance to portray itself as a “staunch defender and builder of inter-national law” and to pledge its support for “international rule of law.”3
The outcome document of the Fourth Plenum of the Communist Party (locally called Rule of Law plenum) exhorts State leadership to
vigorously participate in formulation of international norms…strengthen [the] coun-try’s discourse power and infl uence in inter-national legal affairs [and] deepen interna-tional cooperation in the judicial area.4
It seems that the Chinese government is quite serious about pursuing this goal.
The grand celebration of the 60th anniversary of the fi ve principles, or Panchsheel, in 2014, with the attend-ance of two state leaders from Myanmar and India, is a case in point. China has always been infatuated with quoting its commitment towards fi ve principles of peaceful coexistence in its foreign policy statements and its submissions before international courts. They are, in fact, nothing but principles enshrined in the UN Charter paraphrased and conjugated.
In April 2015, China chose to host the annual session of Asian–African Legal Consultative Organization (AALCO), an intergovernmental organisation with 47 member states from Asia and Africa. Therein, a special session was devoted to commemorating the 60th anniversary
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of Bandung Conference, the fi rst-ever gathering of solidarity of the third world nations of Asia and Africa in 1955, at the recommendation of Chinese foreign ministry. China, it appears, still wants to be seen as the leader of the third world despite its recently acquired sta-tus as an economic and political super-power. In that session, the Chinese premier Li Keqiang announced an ex-change and research programme on international law meant for diplomats and legal offi cers of member states5 and the fi rst cohort of participants of this pro-gramme were trained at Xiamen Uni-versity in Fujian province.6 These exer-cises also serve to highlight Chinese efforts to extend its soft power in the fi eld of international law.
These endeavours certainly contribute to creating goodwill and increasing soft power of China. Even so China should realise that what will reassure the international community of China’s seriousness about respecting inter national law is its wilful submission and mean-ingful participation in international adjudication of boundary disputes with
its neighbouring states. In the same spirit, international community should not expect China to abide by the idealist standards they do not hold themselves to.
Notes
1 Statement of the Ministry of Foreign Affairs of the People’s Republic of China on the Award on Jurisdiction and Admissibility of the South China Sea Arbitration by the Arbitral Tribunal Established at the Request of the Republic of the Philippines, Ministry of Foreign Affairs of thye People’s Republic of China, dated 30 Octo-ber 2015, available at: http://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1310474.shtml.
2 Position paper of the Government of the Peo-ple’s Republic of China on the Matter of Juris-diction in the South China Sea Arbitration Ini-tiated by the Republic of the Philippines, dated 7 December 2014, Ministry of Foreign Affairs, PRC; available at: http://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1217147.shtml.
3 Full text of Chinese foreign minister’s signed article on international rule of law, 24 October 2014; available at: http://en.people.cn/n/2014/ 1024/c90883-8799769.html.
4 CCP Central Committee decision concerning some major questions in comprehensively moving governing the country according to the law forward, posted on 28 October 2014, available at: https://chinacopyrightandmedia.wordpress.com/2014/10/28/ccp-central-com-mittee-decision-concerning-some-major-ques-tions-in-comprehensively-moving-governing-the-country-according-to-the-law-forward/.
5 “Strengthen Asia–Africa Solidarity and Coop-eration to Uphold World Peace and Justice,”
Embassy of People’s Republic of China in Australia, 14 April 2015, available at: http://au.china-embassy.org/eng/xw/t1254807.htm.
6 Launch Ceremony of China-AALCO Exchange and Research Programme on International Law (CAERP), Asian–African Legal Consultative Organization, 31 December 2015, available at: http://aalco.int/scripts/list-posting.asp?recordid=446.
References
Almond, Roncevert (2015): “Mandate of Heaven: An ADIZ in the South China Sea,” Diplomat, 20 July; available at: http://thediplomat.com/2015/07/mandate-of-heaven-an-adiz-in-the-south-china-sea/.
Chiu, Hungdah (ed) (1988): “Chinese Attitudes Toward International Law in the Post-Mao Era, 1978–1987,” Occasional papers/reprints series in Contemporary Asian Studies, No 1, (84), School of Law University of Maryland, available: http://digitalcommons.law.umaryland.edu/cgi/viewcontent.cgi?article=1083&context=mscas.
Jia, Bing Bing (2013): “Remarks by Bing Bing Jia,” Proceedings of the Annual Meeting, Ameri-can Society of International Law, 107, 3 April, 346–48; available at: http://www.jstor.org/stable/10.5305/procannmeetasil.107.0346?seq=1#page_scan_tab_contents.
Rourke, Ronald O’ (2015): “Maritime Territorial and Exclusive Economic Zone (EEZ) Disputes Involving China: Issues for Congress, Congres-sional Research Service,” 27 December, available at: https://fas.org/sgp/crs/row/R42784.pdf.
Yoon, Sukjoon (2014): “Xi Jinping’s ‘True Maritime Power’ and ESCS Issues,” Chinese Journal of International Law, 13 (4): 887–89; available at: http://chinesejil.oxfordjournals.org/content/ 13/4/887.extract.
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 23
Need a Common Law of Nations?
Anupam Ray
Troublesome decisions about international interventions are a conspicuous feature of diplomacy. Diplomatic practices have their roots in domestic polities of democracies that rely heavily on the Common Law principle of legitimising change on the basis of incremental accumulation of precedent. There are striking similarities in the manner in which the Common Law has developed in the 800 years since the Magna Carta. Multilateral diplomatic methods build on the legacies of the Magna Carta and that of collective security bequeathed by the Congress of Vienna and Versailles. Common Law contributed to the demolition of monarchial divine right. This process has lessons that are relevant to the current discourse on whether international interventions dilute state sovereignty and transfer it to supranational structures.
Diplomats in the fi rst two decades of the 20th century operated on ground that would have been
familiar to their predecessors a hundred years ago. The industrial revolution and colonisation had profoundly changed the world. For diplomats, however, oper-ating in their charmed circle, it was a business as usual.
The diplomatic establishment had gr-own in size and become more profes-sional. Resident missions had increased. Pomp and ceremonial were less impor-tant. Notes verbale were transmitted tele-graphically rather than through courier on horseback. The players, the methods and even the issues, nevertheless, remai-ned largely the same. The number of major powers remained relatively con-stant with the only major change being the entry of the United States (US) and Japan. The Congress of Vienna that met in September 1814 was attended by fi ve “major” powers: Austria, Russia, Great Britain, France and Prussia. The Treaty of Versailles signed, a century later, in June 1919 had six major signatories, Germany, the United Kingdom (UK), France, Italy, Japan and the US. Over a largely peaceful century, diplomats parleyed, negotiated and concluded treaties away from the public eye. Whether they were attempting to contain France in Vienna or Germany in Versailles, their methods were largely unaltered. They balanced power equations by adjusting territories, haggled over reparations and attempted to limit armed forces. They were also united in embracing the newly respectable notion of laissez-faire economics to the detri-ment of their colonies.
Change was, however, afoot. The Hague Conferences of 1899 and 1907 and the arrival of the US as a major power alt-ered the diplomatic environment for-ever. The Hague conferences introduced an innovation in international relations, the method of creating international law by multilateral conference. The Hague Convention codifi ed the customs of war
and declared them to be law. Equally important was the adoption of a Con-vention on the Pacifi c Settlement of International Disputes that created a Permanent Court of Arbitration as a “means of settling disputes that diplo-macy has failed to settle.” Legal meth-ods, and not just coercion or accommo-dation, could be used in diplomacy.
Wilsonian Legacy in Diplomacy
The fi rst serving president to travel out-side the American hemisphere, Woodrow Wilson famously declared before arriving at Versailles in 1918 that he would secure peace by open covenant, openly arrived at. To countries exhausted and numbed by World War I, he held that “Justice, and fair dealing” and not “force, and selfi sh aggression” were the only way in which nations could live in peace. He was, whether consciously or not, building on Immanuel Kant. In his Perpetual Peace: A Philosophical Sketch, Kant had said that there could be no peace as long as “States do not plead their cause before a tribunal; and war alone is their way of bringing suit.” Wilson, like Kant, before him was effectively arguing that nations, like indivi duals in societies, must for-sake violence as the method of resolving disputes and agree to live in accordance with laws in exchange for peace and sta-bility. Wilson, a PhD in political science, regarded the growth of constitutional democracy and the rule of law in England as the acme of political evolution. To him, constitu tionalism and rule of law were as morally desirable and as condu-cive to order and progress in diplomacy as in internal polities.
Part 1 of the Treaty of Versailles, the “Covenant of the League of Nations” is the Wilsonian legacy in diplomacy. The Hague Convention had limited itself to “being desirous to extending the empire of law and of strengthening the appreci-ation of international justice.” The Treaty of Versailles, drawing upon contemporary political theory, progressed to seeking “fi rm establishment of the understandings of international law as the actual rule of conduct among Governments.” Further-more, in the event of a failure of diplo-macy, nations had resort to “judicial settlement,” and not just arbitration.
Anupam Ray ([email protected]) is with the Indian Foreign Service and Visiting Professor of Diplomatic Practice at Patterson School of Diplomacy and International Commerce, University of Kentucky.
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Wilson accepted the Congress of Vienna’s concept of collective security. But he made a fundamental change. Cold-blooded assessments of the balance of power, on which the order of Vienna was based, could go wrong. The bloody war had just demonstrated how catastrophic the consequence could be. Continuing to draw upon legal and political theory, Hague and Versailles tried to create struc-tures that could prevent and mitigate confl icts between nations. The US and UK had parliaments, courts and cabinets. The League would have a universal assembly, a decision-making council, and a per-manent secretariat. A permanent Inter-national Court of Justice would be created. Treaties would have to get registered with the League to be valid.
Diplomats in Vienna were power- bro kers. Versailles attempted to make them parliamentarians, debating and making rules in full public view. It also tried to make them adapt to the ways of the legal world, framing and resolving disputes within a framework of rules and tribunals.
Limiting Sovereignty
Success, however, was at best partial. The old ways were resilient. Charles de Gaulle, one of the greatest diplomats of all time, is reported to have stated in 1963, almost fi ve decades after Versailles, that “treaties are like roses and young girls; they last while they last.” Such sentiments aside, the impact of Versailles on the diplomatic profes-sion was profound. Like early converts to org anised religion, who could not for-sake their heathen gods, diplomats deve-loped professional schizophrenia or split personalities as they tried to simulta-neously operate two contradictory prin-ciples. The fi rst is that “might is right.” The second, which controverts the fi rst, is that the only legitimate use of might is to uphold the right. The fi rst meant no restraints on the exercise of sovereignty. The second implied precisely the con-verse. National sovereignty had to be limited if confl icts were to be prevented. Put another way, the work of balancing power equations amongst sovereigns and that of creating Kantian tribunals for nations and universal public laws
to restrain sovereignty had to be concur-rently pursued.
Sovereignty, according to Locke, is the power to make laws that are obeyed by all. In his famous book On Liberty (1896), John Stuart Mill writes that “every political society is composed of rulers and subjects.” The relationship between them is “necessarily antagon istic.” The struggle of the “subjects” against the “tyranny of political rulers,” which is a struggle about sovereignty, Mill says, is the “most conspicuous feature in those portions of history with which we are ear-liest familiar, particularly in that of Greece, Rome and England.” Disputes about sovereignty are, therefore, as old as history.
For most of history, “political rulers” have been monarchs. Emperors and kings ruled “absolutely” within domains obtained by inheritance or conquest. Absolute authority was justifi ed by con-cepts such as the doctrine of divine right to rule or a mandate of heaven or ver-sions thereof. Every attempt was made to project these as permanent and immutable. These were only partially successful, and over time, the concept of a modern democracy arose. The battle between the “rulers” and “ruled” and between liberty and authority has largely been settled in favour of the “ruled” and in favour of liberty. Sovereignty has been transferred from the erstwhile “ruler” to the “ruled.” Monarchies are a threatened species while the concept of divine right is virtually extinct. This does not mean that “absolute” rule is dead. But, the lives of “absolute” rulers are far more complicated than earlier. It also does not mean that the battle between authority and liberty is over, even in democratic societies. Sovereignty con-tinues to be reshaped and redistributed.
One of the better-documented of the struggles that Mill refers to is the one that he was involved in—the movement of sovereign powers away from the person of the monarch in England. The year 2015 marks the 800th anniversary of what is usually considered to be the fi rst landmark in the growth of English constitutionalism—the proclamation of the Magna Carta. The Magna Carta is based on an “Articles of Barons” that
guarantees certain baronial privileges against monarchial usurpation. At a time when monarchs were considered to be above the law, these guarantees estab-lished two very important principles. First, even the king could not disregard certain laws. Second, the executive could not arbitrarily curtail liberties. Authority, and therefore sovereignty, had to be exercised in accordance with law rather than at the whim of the monarch. The principles of the Magna Carta animated the struggle between parliament and the crown over the next few centuries of English history. They acquired longevity and strength and became elements in the scaffolding struc-ture that ultimately contained absolute monarchical rule. Democracy—and the principle that sovereignty and the exer-cise of sovereign power require the con-sent of the ruled—and the rule of law grew with the help of this structure. There were periods when the structure acquired strength and rigi dity very rap-idly. The events related to the English civil war and the Glorious Revolution in the 17th century constituted once such period. There were other periods of slower development. But, it did grow and expand, including additional foun-dations and pillars such as English Com-mon Law and the judiciary.
Common Law Tradition
The English Common Law tradition pos-tulates that the law made by parliaments (statute law) is a major part—but only a part—of the corpus of laws. This corpus would also include customary law, or law derived from the customs of a society, as well as “judge-made law.” Customs become law either through legislative enactment or through judicial verdicts. Each judicial verdict constitutes a prece-dent, which then accumulate to build “case law.” Judges also have the power to interpret law on the basis of equity. Equity is described by Salmond as natural justice. It allows judges to go beyond statute law and “administer justice in accordance with the dictates of natural reason.”
Further, the lawmaking power of the sovereign, be it crown or parliament, according to this system, is not absolute. Statute law must conform to “higher” or
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“natural” law. The power of judicial review, built into the American and Indian constitutions, is based upon a common law dictum that only judges or persons trained in law can decide whether statute law conforms to this higher law and correct it if necessary. In 1608, Edward Coke, the Chief Justice of England, told James I that the king was not above the law, and more importantly, had no right to interpret the law. Interpretation of the law was the sole preserve of those who had long study and experience in law and understood the “artifi cial” reasoning (as against the general power of reasoning) that combines past cases and legal custom. Coke’s arguments expanded on the Magna Carta and were used to powerful effect by parliament in its struggle with King James’s son and successor. Royal prerog-ative was thus bounded not just by par-liament, but also by judicial prerogative.
Coke belonged to a corps of judges crea-ted by the British monarch, Henry II (1133–89). He is perhaps best remem-bered for creating the unifi ed royal judi-ciary that prevailed over fragmented baronial courts. Baronial courts usually relied on trial by combat or ordeal—somewhat like nations settling disputes on the principle of “might is right.” Henry II did not eliminate baronial courts by force. Instead, he offered bet-ter justice by instituting trials by jury and professional judges. The legal barrier of local baronial jurisdiction was over-come by creating a superior national jurisdiction based on an elastic interpre-tation of the doctrine of the “king’s peace.” Criminal offences broke not just the local peace of the baron, but also the larger peace of the whole kingdom and became, thereby, subject to the king’s justice. A person aggrieved by a breach of the king’s peace could seek remedy from the king. In doing so, he invoked the King’s Writ (or command) as the fountainhead of all authority and jus-tice. With time such petitions became classifi ed into categories, the most well-known being habeas corpus. Ancient custom further decreed that royal writs must unfailingly be obeyed. English legal history documents how writs proliferated and the jurisdi ction of the king’s courts continuously expanded till baronial courts
became irrelevant. Twelfth century England thus had a “hybrid” legal system in which jurisdictions overlapped and competed. Codifi cation of the corpus of law had also only just begun. Thereafter, both progressed hand in hand and strengthened each other. Judicial preroga-tive acquired strength from its founda-tion in Common Law. The judges, in turn, strengthened the Common Law edifi ce. The point is that an institution created to cement royal rule ultimately became a principal opponent of royal absolutism.
In an interesting twist in the history of sovereignty, writs now rest with the judi ciary, and not the executive, in the two largest democracies, the US and India.
New Diplomatic Machine
The one aspect of sovereignty that re-mained unfettered by these historical forces was diplomatic conduct, that is, the manner in which sovereigns be-haved with each other. Versailles placed diplomats squarely at the centre of a new phase of the struggle. The history of the diplomatic profession in the past century is that of an attempt to create the rules, the tribunals and institutions that would constrain the exercise of sovereignty in diplomacy.
A new diplomatic machine was creat-ed to meet these demands. The heart of the older machine was the network of foreign offi ces and resident embassies and legations. The newer model, however, derived much of its power from confer-ences and international organisations (IOs). The diplomatic engine now had two cylinders—bilateral and multi lateral. The growth of multilateralism has been spectacular. The only multi lateral meet-ing that D D Eisenhower, the US Presi-dent, attended abroad was a summit of the North Atlantic Treaty Organization (NATO). Two decades later, Ronald Rea-gan attended NATO, G7, Association of Southeast Asian Nations (ASEAN) meet-ings and the Cancun Summit on Interna-tional Cooperation and Development. George W Bush travelled overseas to at-tend NATO, US–European Union (EU), G8, Summit of Americas, North American, Red Sea, Central American Republic and Asia–Pacifi c Economic Cooperation (APEC) meetings. Barack Obama has travelled to
attend G8/G20, NATO, US–EU, Summit of Americas, North American, Climate Change, Nuclear Change, ASEAN, APEC and East Asia Summit meetings. Another cruder indicator is that venerable refer-ence for diplomats—Satow’s Diplomatic Practice (edited by Ivor Roberts)—fi rst published in 1917. A section on IOs only appeared in its fourth edition in 1957. The sixth and current edition, published in 2009, 92 years after the fi rst edition, devotes roughly 40% of its pages to IOs and multilateral diplomacy.
The United Nations (UN) is the best known IO. It is not alone. The number of IOs has increased an estimated 20-fold in the last cen tury. Their appeal is uni-versal. Brazil, Russia, India, China and South Africa (BRICS) recently agreed to create the New Development Bank. Intergovernmental Organisations (IGOs) are also expanding in size, budget and activity. This is most obvious in the func-tioning of the UN. The UN Security Coun-cil took 49 years to pass its 1,000th reso-lution in 1995. It adopted its next 1,000 resolutions in less than 16 years. About another 700 presidential statements, a relatively recent negotiated device, were also adopted during this 16-year period.
Multilateral diplomacy has breathed life into what was the sickly structure of international law. Salmond enumerates fi ve sources of international law, namely, legislation, custom, precedent, juristic writing and agreement. The last of these, agreement, has become the principal contributor to what Karen A Mingst and Margaret Karns describe as a growing corpus of international rules or laws and norms or “soft laws” that also inclu des customary practices and judicial opinions. An ever-increasing number of “inter-national regimes” and “international regulatory mechanisms,” that are often binding, have been crafted. Mingst and Karns also note that this new diplomatic machine has produced more than 3,000 multilateral agreements.
This growth in the corpus of interna-tional law is accompanied by what many see as the growth of an incipient inter-national judiciary. The Permanent Court of Arbitration and the International Court of Justice have been joined by the Inter-national Criminal Court (established by
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the Rome Statute); several tribunals set up under the Security Council authori sation in relations to the former Yugo slavia, Sierra Leone, Cambodia and Rwanda; the World Trade Organization (WTO) Dispute Settlement Mechanism (DSM); and the International Tribunal for the Law of the Sea. These are, in theory, supposed to administer inter national law in areas, where there is no national law thus avoiding encroachments on the jurisdictions of national courts. In prac-tice, however, international tribunals, in some high-profi le instances, have rejected claims of natio nal jurisdiction.
The rapid growth in the corpus not-withstanding, it is hard to deny that international law in the 21st century looks as shaky as Common Law in the 12th century. International judiciary is also in its infancy. There are, nonethe-less, a number of intriguing signs that seem to indicate the idea that nations must conduct themselves accor ding to rules has grown beyond infancy.
The adoption of the UN Charter, it has been argued, is the Magna Carta moment in international relations. Like the Magna Carta, it affi rms two important princi-ples. First, all nations are equal; second, force should not be used by nations to settle disputes. The international com-munity’s record in upholding these principles is self-evidently uneven. As with the Magna Carta, it is the Charter’s indirect contribution, that is more enduring and impressive.
Security Council Resolution
It has, amongst other things, introduced a new instrument, the UN Security Council Resolution. The Security Coun-cil Resolution is similar to a prerogative writ. It is binding on all nations and can be invoked when there is a “threat to international peace and security.” “International peace” is the new “king’s peace” with the Security Council itself being allowed to defi ne both the mean-ing of “peace” and “threat.” In other words, limited only by the veto, it can decide its own jurisdiction and can ignore the existence of national laws and courts in arriving at such a determi-nation. A Security Council Resolution, like a prerogative writ, therefore, allows
aggrieved parties to jump to a suprana-tional system and seek remedy. A supra-national system, as we have noted, is also beginning to dispense limited reme dies. The Security Council, like the royal courts mentioned earlier, has been expanding its jurisdiction by being liberal in its interpretation of what con-stitutes a “threat to international peace and security.” It has, through resolu-tions on issues like children in armed confl ict—and other “thematic issues”—expanded its writ to internal and do-mestic confl icts and identifi ed expanded criteria that will “trigger” Security Council intervention.
The Security Council, using its auth-ority under the UN Charter, has also underwritten an effort to expand the ap-plication of international humani tarian law. The methods it has used are strik-ingly reminiscent of the growth of Com-mon Law. War crimes, and crimes against humanity, are violations of customary law—accepted by most, if not all, nations. The judgments of the International Tribunals following World War II were based on this customary law. Subsequent tribunals (on Yugoslavia, Sierra Leone and Rwanda), established by the Security Council, built on this precedent and generated an international case law on war crimes and crimes against humanity. This case law, interestingly, is also being used by some national judiciaries that have refused to recognise Westphalian sovereign immunity. Former Chilean President Pinochet’s detention in Britain is a case in point.
Another interesting phenomenon is the international trading regime that has elevated the concept of “most favo-ured nation” and “national treatment” to the status of “rules.” The trade regime has also provided for a WTO DSM to adjudicate disputes. DSM decisions have a patchy enforcement record. But their decisions are creating precedents even as trade “rules” harden into custom, and very likely, law.
Conclusions
A visible trend of international legal activism that imaginatively utilises and grows the corpus of international cus-tom and law and uses it to expand the
jurisdiction of supranational bodies runs through this narrative.
This does not mean that an inter-national rule of law or a common law of nations is around the corner. The con-cept of equality of nations, articulated forcefully in the Hague Conference by a Brazilian diplomat, Ruy Barbosa, and an essential precondition for any rule of law is still not a reality. The absence of a domestic rule of law and democracy in many parts of the world must be reckoned with. The quality of justice delivered by the few existing international institutions is inconsistent at best. The state has proved to be resilient and many scholars see state sovereignty adapting to present reality and do not see surrender.
The picture is therefore mixed. Winston Churchill in his magisterial A History of the English-Speaking Peoples talks about the cautious advance of English justice which relied on “slow-growing custom” and grew “case by case in open court.” The growth of a rule-based internation-al polity appears to be on a similarly cau-tious and slow trajectory. The historical record indicates that public opinion and zeitgeist occasionally drive alterations in the pace of change. It also encourages us not to forget the law of unintended consequences. The Magna Carta was the result of internal strife amongst “rulers” with rebellious barons set upon limiting arbitrary decisions by King John. In spite of the Magna Carta, baronial prerogative vanished. Monarchical privilege, though existent, stands con-siderably diminished. The ultimate ben-efi ciaries—who continue to benefi t even as the original parties became reduced to irrelevance—were the “ruled.” They, it may be noted, were absent from the proceedings.
Obituaries
The EPW has started a monthly section, “Obituaries”, which will note the passing of teachers and researchers in the social sciences and humanities, as also in other areas of work.
The announcements will be in the nature of short notices of approximately a hundred words about the work and careers of those who have passed away.
Readers could send brief obituaries to [email protected].
Economic & Political Weekly EPW february 13, 2016 vol lI no 7 27
book reviewS
The Spectral Wound: Sexual Violence, Public Memories and the Bangladesh War of 1971 by Nayanika Mookherjee, Durham: Duke, 2015; pp 325, $26.95, paperback.
Time of the Writing, the Hour of Reading
Naeem Mohaiemen
Nayanika Mookherjee acknowl-edges that The Spectral Wound has taken “a long time” (xxi) to
write. She tells us about the early morn-ing “thought struggle,” as well as the ethical challenges involved in crafting this work.
At the time she started her research, there were no major English language works on the birangonas, the offi cially sanctioned term for victims of rape dur-ing the 1971 Bangladesh independence war. In the intervening years, several researchers have begun looking into similar terrain, possibly intellectually and emotionally inspired by elements Mookherjee also cites in her journey. These elements include the Ain o Salish Kendra oral history project, the Nilima Ibrahim book and related works Ami Birangona Bolchi (I am Birangona Spea-king), the codifi cation of the birangona in plays and fi lms, and the evolution of a visual literacy (we may say scepticism) that has led anthropologists to go back and look at some of the iconic “horror” images produced in the aftermath of the 1971 war. This visual anthropology has included works that problematise the male gaze on the birangona, as in Sayema Khatun’s Muktijuddher His-Story: Ijjat o Lojja (His-Story of Liberation War: Honor and Shame) in the Rahnuma Ahmed (ed), Public Anthropology series. Ahmed herself has parsed Naibuddin Ahmed’s iconic image of a rape victim (“Distances,” New Age, 26 March 2008), and that read-ing can be productively placed alongside Mookherjee’s rereading of Naib Uddin’s photographs.
Books on Women in 1971
In the last fi ve years, three English lan-guage books have appeared that also touch or focus on the role of women in the 1971 war, including the category of
the birangona. I centre these works here because they have come from academics primarily based in the West, and published from American and European presses. This is the same context in which Mookherjee’s book will probably most widely circulate, therefore her audience will read these other works alongside hers; they may also overlook works like that of Khatun, unless it is translated.
Among the English language publica-tions, the most analogous is Yasmin Saikia’s Women, War, and the Making of Bangladesh (Duke 2011), which received a very different, noticeably cooler, recep-tion in Bangladesh. The second book is Bina D’Costa’s Nationbuilding, Gender and War Crimes in South Asia (Routledge 2011), which included the Bangladesh war crimes case within a multi-country study. Finally, there is the widely debated revisionist his-tory of 1971, Dead Reckoning by Sarmila Bose. In claiming that the Pakistani army behaved as per the rules of war, Bose dismisses the charges of targeted killings of Hindus, as well as war rapes.
Mookherjee was one of the fi rst criti-cal respondents to the book, in The Guardian and then in EPW (when I wrote my own response to Bose, “Flying Blind: Waiting for a Real Reckoning on 1971,” EPW, 3 September 2011, I focused on other aspects of the book as the issue of war-time rape had been addressed by Mookherjee). Through these responses, as well as a series of linked academic essays, Mookherjee has actively engaged with the ecology of research around war crimes in 1971.
One benefi t of this book’s long gestation is the ability to go back and revisit the ethnography in Enayetpur, as well as a large visual record (photography, cinema, publications, and theatre). Moo kherjee has repeatedly used the term achrano (combing), gleaned from one of her interviewees. She has deplo yed this met-aphor of combing over as something that both reveals and obscures. Her ethno-graphy has also been enh anced by a combing process, showing us nuances, slights, and hidden objects that reveal over the long duration. The res earch obstacles that she describes frankly were also possible because of the longer engagement with this project. The book contains ethno graphy that looks not only at what is spoken, but the ecosystem within which such speech is made possi-ble. She tells us early on that a researcher warns her she will have to hear altufaltu (nonsense) (p 49), but in fact what this patient researcher fi nds are “talkable” ithash (history) (p 57). She notes astutely the role of the gatekeepers of the narra-tive (p 61) in guiding stories down certain channels, so much so that Mookherjee stopped asking directed questions about ghotona (the event) and instead allowed the women to fi nd their way through their stories.
Management of Birangona Story
The second layer of ethnography is of the story circulation environment. One of the book’s important interventions is an unfl inching cataloguing of the man-agement of the birangona story, and some of this will be uncomfortable read-ing for those who have witnessed this performative element, but chose to be silent for fear of treading on sacred grounds. We read that some of the initial birangonas were given ashah (assur-ance) (p 60) by civil society movements about material gains (for example, houses, land, jobs) for consenting to be photo-graphed and having their stories told. One can of course argue that compensa-tion was an ethical necessity given the time away from livelihood, as well as to offset the social and economic stigma that could result in villages after going
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly28
public. Such stigma includes the chain of khota (taunt) (p 67) that the book docu-ments in the “Bringing Out the Snake” chapter. We also note the birangonas’ own discomfort with the process, as when they refer to being offered murgi (chicken) pulao when they would prefer shaak (greens) (p 61), and the nod to the instrumentalisation of rape victims, in the quotes “Are they doing business by using us?” and “Our prices have been raised in the market” (p 62). We note the errors of overreach that occur in the rush to com-modify this experience of sexual violence, as when Moyna is asked to name an ac-cused national war criminal directly, and says “she kida?” (who is he) (p 59).
This uncomfortable area is one where a long gestation has assisted the book. If in the 1990s, at the very beginning of the birangona documentation trend, Moo k herjee had published a detailed account of these moments of instrumen-talisation, I suspect a large portion of the coalition that is broadly referred to in her book as “left-liberal,” and elsewhere as “shushilshomaj” (civil society) or the con-tested category of “secular,” many would have taken umbrage. But the experience of various levels of instrumentalisation in recent years, as well as critiques of the Bangladeshi non-governmental organisa-tion (NGO)–industrial complex by anthro-pologists Rahnuma Ahmed, Lamia Karim, Dina Siddiqi, Nazneen Shifa and others has meant that the critical parts of the book will often be met with nods of recognition. Mookherjee writes towards the end of the book about a moment of disagreement with left-liberal activist networks, and how she transforms in that moment from “amader (our) Nayanika” to “the foreign, other Nayanika” (p 257). Other recent researchers have similar, private stories of the convenient deployment of kache tana (pulling close) to appro priate, and durethela (push away) to delegitimise.
Political Context
The passage of time has added sedimented new meanings to this book, and that can best be seen in the political context with-in which public memory of birangonas operates. Mookherjee has documented some of this shifting political environ-ment, both in this book, and in two
e ssays: “The Dead and Their Double Du-ties” in Space and Culture journal (May 2007) and “Denunciatory Practices and the Constitutive Role of Collaboration” in Traitors: Suspicion, Intimacy, and the Eth-ics of State-Building (University of Penn-sylvania 2009; edited by Sharika Thi-ranagama and Tobias Kelly). A reading of this changing environment can be mapped onto the dates of her initial interest in this topic (1992), the period of fi eldwork (1997–2001), the subsequent journal articles (2006–13), and the publi-cation of this book (2015). The terrain of remembrance in Bangladesh has gone through a radical, transformative, and disruptive change over this time span. This was clearest in the aftermath of the Shahbag movement (demanding death penalties for all accused war criminals), which has placed the former unity of the urban left-liberal a lliance in crisis.
In the early 1990s, during the initial phase of this research, the horrors of Bos-nia and Rwanda, the demand for restitu-tion of Japanese comfort women, and the 1995 United Nations (UN) classifi cation of rape as a war crime, had brought the issue of 1971 birangonas to centre stage. By the time Mookherjee began her fi eld-work, Bangladesh had an Awami League government for the fi rst time since 1975, and we began to see a large opening in the area of birangona testimony, with support by civil society NGOs. By the time she was, I presume, writing up her disser-tation, Bangladesh was again under a Bangladesh Nationalist Party govern-ment, and the opening for 1971 narratives began to be stifl ed again. In the period when her journal articles started being published, the country transitio ned from a caretaker (military) government to the third Awami League government and the beginning of war crimes trials. At the time of the book’s fi nal publication, the country’s progre ssive forces were deeply divided and struggling to make sense of the implosion of liberal coalitions in the aftermath of Shahbag.
Appropriation of Concerns
I want to propose that when Mookherjee began her research, the project of biran-gona testimonies, indeed the entire ini-tiative of oral history of 1971, was a site
of feminist resistance—to a hostile state, to the rise of religious fatwas, and to forms of imposed piety. However, by the time we reach 2015, the transformed situation suggests that not always is the remembrance of gender violence auto-matically tied to a progressive project. Feminist projects can also have their own forms of silencing, and we see this in the fate of Yasmin Saikia’s book in Bangladesh, especially in the palpable discomfort over a survivor’s testimony that also indicts sexual violence in Bang-ladeshi society before and after 1971. Even more disturbing than these quiet blind spots are the way feminist strug-gles are being appropriated by the “war on terror” project. In the 1990s, it may have been logical, and tactically effec-tive, to link 1971 rape with the 1990s spate of anti-women fatwas in villages. Today, confl ating forms of piety, as well as Islamism (what Mookherjee calls “jujuburi (ghost) of Islamic Fundamen-talism” (p 254)), with 1971 narratives, can be counterproductive.
The risk of appropriation of feminist concerns by a glocal project of perpetual war on terror have been signposted by, among others, Rahnuma Ahmed in New Age, Seuty Sabur in Alal o Dulal, Nasrin Siraj Annie, and Saydia Gulrukh in Thot-kata. Meanwhile, opposition to the war memory project comes from two different sources—the fi rst is internal to Bangla-desh’s polarised political landscape which prevents two political parties from fi nd-ing common cause even over a war in which both participated; the second is external and specifi c to the project of re-visionism inside Pakistan which also seeks to suppress left-liberal forces in-side that country. Academic audiences can read Mookherjee’s analysis of some of the problems in the war photographs of Kishore Parekh (“recaptioning” (p 163)), Naibuddin Ahmed (“rumours of stag-ing” (p 193)) and Rashid Talukdar (the “politics of pose” (p 205), after Allen Feldman), and parse these as examples of “open semiotics” (p 173) and an alter-native to Benjamin’s fear of the deaden-ing effect of “mechanical reproduction” (p 188). However, similar examples of misrecognition or recaptioning have been deployed by authors such as Bose
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 29
to a rgue that the problems in these arte-facts are evidence that the entire project of public memory around 1971 is a mas-sive hallucination or subterfuge. I would argue that these faulty public memory objects could be productively reread within the fl exible discursive space cre-ated by a brutal war and its uncertain, contested aftermath. But that argument requires patient readers who are willing to let go of absolutes, and in the present moment binaries of true/false have more adherents within discursive con-texts in Pakistan and Bangladesh. This is
the volatile and contested terrain into which this book, with its complex argu-ments, now enters.
Changed Environment
In my reading, Mookherjee began her project at a time when political and social forces in Bangladesh were arran-ged around fewer polarities of power and memory. The 1971 memory project was, at that time, in oppositional and resistant mode. Today, it has unusual and unexpected alliances with forms of local and global power, just as the
r evisionist account that wishes to deny the genocide also has new alliances and sophisticated forms of discursive power. This ethnography on public memory and public secrets needs to be reread within that changed environment, where forms of uncertainty may be the only things we are certain about any more.
This essay is expanded from a discussion organised by Dina Siddiqi and Seuty Sabur of BRAC University, Dhaka.
Naeem Mohaiemen ([email protected]) is a fi lm-maker and PhD candidate in Anthropology at Columbia University.
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 29
Creating a New Medina: State Power, Islam, and the Quest for Pakistan in Late Colonial North India by Venkat Dhulipala, Cambridge University Press, New Delhi: 2015; pp xxii+530, Rs 995.
On the Quest for Pakistan
Pallavi Raghavan
Debates about Pakistan’s creation have the distinct air of conducting an autopsy—the causes for its
decline are also implicitly sought while locating the reasons behind its creation. In a sense, this is what Venkat Dhulipala recognises in Creating a New Medina: State Power, Islam, and the Quest for Pakistan in Late Colonial North India. Much of the literature on the partition is premised on the argument that subse-quent weaknesses in Pakistan’s polity could somehow be predicted because of the diverging ideological arguments in s u p p ort of the Pakistan movement.
Arguing the reverse, Dhulipala suggests that the faults in Pakistan’s political struc-tures are not that it was “insuffi ciently imagined,” or inadequately prepared for, but rather, the consequence of a vision which had, in fact, been imagined in great detail at the time of its creation. Dhulipala argues that the ambiguities confronting the nature of the Pakistan state or the clashes between its institu-tions were not shaped by the unantici-pated consequences of the derailment of the Pakistan dream at all: this was pre-cisely what the Muslim League was strug-gling for, since at least the 1920s.
New Orthodoxy
Dhulipala argues that partition histori-ography needs to move beyond Ayesha
Jalal’s “high politics” thesis, which makes Pakistan look as if it was suddenly cob-bled together because Jinnah’s secretive “bargaining chip” gambit fell apart. This theory, he says, suggests that politicians seemed to have “slept-walked into the Partition,” and that there is an urgent need to revisit the argument that Pakistan was made in a “fi t of South Asian absent-mindedness.” Such thinking, Dhulipala charges, constitutes the “new orthodoxy” in South Asia’s partition studies, swal-lowed in its entirety by generations of scholars.
This is partially true; the broad out-lines of the debates about the run-up to the partition need no repeating to the average South Asian reader. The assump-tion that the partition could somehow have been avoided if one or more of these steps had played out differently, or if the magnitude of the Pakistan demand had been adequately comprehended b eforehand, was certainly a common theme engaged within several eminent works in partition studies (see also, for instance, Hasan 1993 and Page 1982).
Instead, Dhulipala argues that the analysis of the Pakistan movement needs
to be both elongated and deepened. Not only were there serious discussions about the implications of the movement for much longer than many scholars have ac-knowledged, it was also engaged with at far more localised, popular, and effec-tively politicised levels than is generally understood, for a far longer period than is often acknowledged. There was wide-spread support for a partition amongst powerful sections of the Ulama in the United Provinces (UP), who understood full well, advocated, and embraced the prospect of the separation of the Bengal and Punjab provinces, and the creation of an Islamic state.
He examines the careers of a variety of fi gures associated with the Pakistan movement. These include Shabbir Ahmad Usmani, a founder of the Jamait ul- Ulama-i-Islam (JUI) and a member of the Constituent Assembly of Pakistan, Ashraf Ali Thanwi, a prominent cleric of the Deobandi school, who supported the Mus-lim League’s demands, and I H Qureshi, Minister of Education in Pakistan in 1949. These were fi gures who had been promi-nent as intellectuals, re li g i ous leaders and opinion makers in the decades be-fore, and who subsequently participated in the shaping of a theocratic state.
Clarity on Demands
Dhulipala demonstrates how there was an extraordinary—and so far, under- appreciated—richness to the debates about Pakistan. They were by no means a product of a sudden decision, the precise contours of which became mercilessly clear only in the terrible summer of 1947.
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Arguments, Dhulipala demonstrates, in favour of Pakistan were not “fuzzy” at all, and in the United Provinces by the 1930s there was a fairly clear, and strong sense of the necessity of agitating for a separated state, whose outlines were already understood.
To establish this, Dhulipala draws on a rich, dense and complicated body of sources, around the debates about Pakistan in UP after the passing of the La-hore Resolution in 1940. In doing so, he provides what are often fascinating in-sights into the characters of the Pakistan movement, the nature of UP politics, as well as the minutiae of the shaping of a political consciousness using religiously informed arguments. Furthermore, Dhuli-pala argues that portraying Jinnah as b eing merely contemptuously tolerant of the sideshow of the debates in the Deobandi Ulama in the United Provinces, while he got on with the real business of fi nding a voice for the Muslim League at the centre, is not accurate.
Dhulipala’s attempt is to co-opt Jinnah into the centre of the process of grubby politicking for separatist votes that led the Muslim League to be able to convinc-ingly claim a mandate for partition. Jinnah, in this view, actively encouraged, organised and appropriated their methods in his quest to fi nd a voice for the Muslim League, as well as for the creation of Pakistan. Jinnah was not using the Ulama for political expediency—they were using him, and he was an acquiescent, and active benefi ciary to this process.
All this, then leads us to the question of what props up the intellectual fi rma-ments of a nation; what gives the call for a separated nationhood its tintinnabula-tion, its resonance. After all, nations, Dhulipala argues convincingly enough, do not just happen, they have to be fought for, often using brutal tactics. Dhulipala points out, for instance, that given that the Congress won such a large mandate from UP in the 1937 elections, the ques-tion of how the Muslim League managed to overcome these odds and win a bigger mandate from its base after these elec-tions merits further consideration.
This did not happen because Jinnah managed to single-handedly turn around the fortunes of this party in this
complicated province in a secretive bid to win parity at the centre. Instead, the localised machinery of the UP Muslim League organised a concerted—and ulti-mately persuasive—strategy to win over their electorate by unveiling a clear pic-ture of what the state of Pakistan would look like. One signifi cant consequence of its redoubled efforts at mobilisation was the support of a faction of the Deobandi Ulama, led by Maulana Ashraf Ali T hanwi, who became a close adviser of the Muslim League.
Religion and Power
The question of how a decidedly unwieldy instrument—religion—could be, and was used to fashion a neatly encompassable state-based ideology has been the subject of a great deal of scholarship, even pre-dating the “bargaining counter” theory, and Dhulipala is by no means the fi rst to engage with these questions. In the same decade that Jalal’s Sole Spokesman was published, Francis Robinson, for instance, had also explored “the deep cultural transformation brought about by the shift in Muslim piety fi rmly t owards this-worldly religion [from other-worldly religion]” over the 19th, and early 20th centuries (Robinson 1997). That the concept of Pakistan represented a debate about nationhood and belonging, and embodied an almost missionary belief in the pursuit of a homeland that provided security for South Asia’s Muslims, which far predat-ed the Lahore resolution is now general-ly accepted in partition historiography.
These questions touch at the heart of the matter for many debates about Pakistan: was its creation accompanied by a sense of confusion about exactly what it was for? Farzana Sheikh (2009) points out that the doctrinal diversity about the role of Islam in the making of the state was, inimitably, part of the Pa-kistani struggle. The ensuing sense of contradiction built into the Pakistani state-building enterprise was also, she argues
prompted by their own [often ill-advised] secular leanings, they chose to reconcile their quest for a modern constitutional framework based on religion by claiming that Islam was not a mere religion but the blue print for a comprehensive social and
p olitical order capable of adapting to the modernity of nationalism.
More recently, Faisal Devji, has also shown that the Pakistan demand was far more pervasive than a bargaining chip and is best understood as a language that voiced concerns about self-empower-ment. The movement, he shows, was shaped by “Shia Muslim early nationalists [who] were responsible for turning Islam into an ecumenical category, one that could become politically effective, by uniting a number of disparate groups of believers under it…” (Devji 2013: 215). This language, Devji thus shows, was far more complicated, more elaborate than simply a clumsy attempt at clutching at any unifying religious identity in order to fashion a state,
despite having tried to surmount it for dec-ades, the language of minority politics and protection continues to inform Pakistani debates, with fundamentalists in particular setting themselves against a heedless Mus-lim majority that has taken the place of its erstwhile Hindu foe... (Devji 2013: 239).
This theme is also echoed, interestingly enough, in Aatish Taseer’s travelogue, Stranger to History, when a character asserts that a proper evaluation of the nature of the Pakistani state can only come with an adequate understanding of the allegiances a “cultural Muslim” requires, and can be enacted into a set of allegiances to a state.
Stretching the Argument
What several of these works have also shown is that there is no easy line to be drawn between the consciousness of a separate political identity, and how this could be transcribed onto the creation of the state structure of Pakistan. By 1940 or so, the outlines of a proposed map of Pakistan were not diffi cult to fi nd: it pulsed, in incomplete concentric circles in the outlines of the subcontinent. In Bareilly, a scholar named Anis-al-Din Ahmad Rizvi called for a Pakistan con-sisting of the provinces where Muslims were in a majority: namely, Punjab, Sind, Baluchistan, North West Frontier Pro-vince, Kashmir, East Bengal, Assam, as well as Hyderabad (Dhulipala: 202). Rizvi argued that Muslims had always been a separate nation in the subcontinent, and that it was high time for Muslims to
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e stablish their own nation in the subcon-tinent, “When the lamp is burning brightly why would you need to go to the hut of the indigent faqir and look for his fl ickering lamp?” (p 198).
But there are dangers in taking this argument too far. For one thing, all the detailed territorial plans in the world are insuffi cient in actually making for a state. In fact, it is also important to gauge how much these attempts were, to use a popular phrase in today’s political lexicon, so much kite-fl ying. In the case of Bengal, for instance, Joya Chatterji has also shown that when it came down to it, the Radcliffe Commission essentially presided over two sides whose legal gambits boiled down to coaxing as many more inches from the map-makers’ pen as possible (Chatterji 1999).
While Dhulipala is correct in arguing that there was a great deal of debate about nation, religion, and their corre-sponding recognition in territoriality during the 1940s, this is not the same as arguing that this necessarily represent-ed the causal factor—that these were considered to be the strongest hinges of the arguments in favour of a separated Pakistan. To draw an overstretched analogy, if tomorrow, India were to be suddenly joined with the Hindu and Buddhist populations in South East Asia, it may not be directly attributable to pamphlets published by the Vishva Hindu Parishad that might call for such an amalgamation. As any number of po-litical decisions in the South Asian sub-continent can testify to, enthusiasm and support do not necessarily constitute the basis of the decision to act.
Other Actors
But a more important problem with this book is that it gives too much impor-tance to the actions of one set of actors in the shaping of the Pakistan move-ment, at the expense of others. One ex-ample of this could be Choudhary Rah-mat Ali, another determined proponent of the Pakistan Movement, and who had voiced his espousal of a separated na-tionhood several years prior to Jinnah: “The Indo-Pakistanian problem is not an inter-communal issue and will never be solved on inter-communal lines…”
(K K Aziz 1987: 136). Ali was largely side-lined by the government of Pakistan, and died, as is widely known, in Cam-bridge within three years of its creation. But his own arguments had also included the creation of an overarching Muslim federation that included Hyderabad and Kashmir.
Both these states had had fairly deter-mined initiatives to accede to Pakistan, and were recipients of support from the Government of Pakistan. In 1948, the Nizam of Hyderabad had in fact present-ed his case to the United Nations, with the aid of Shah Nawaz Bhutto, heir, sub-sequently to the major political dynasty in Pakistan. While Dhulipala is correct in ascribing to the UP Muslim League enormous signifi cance in the shaping of the state of Pakistan, the book does prop up their visions of what the state ought to become, at the expense of other, equally valid arguments which may have been considered equally viable at the time. The Pakistan dream, its aspira-tions for territory, as well as its world views and ideology, therefore, may be broader, more capacious, than the sub-jects of Dhulipala’s study allow for.
In fact, what is less satisfactorily explained in Dhulipala’s book is the precise implications of his interpreta-tion of the Pakistani movement on the making of the nation. Suppose we accept—and, on the basis of this book, we can—that there was an articulate demand for a future Pakistan emanat-ing from the United Provinces in the 1930s. Is Dhulipala suggesting that this was the only determinant of the making of the nature of the Pakistani state? Contrary to what Dhulipala’s argument about a “too imaginatively constructed” nation might suggest, it is worth noting that the promulgators of a determined fi ght of a Muslim homeland, for all their hectic pamphleteering in UP in the 1930s, did not always have a smooth rise within Pakistan’s politics. Indeed, the making of Pakistan’s fi rst constitu-tion took a full 10 years to complete, precisely because of a determined re-sistance against the implications of be-ing declared a homogenised—which in this case meant a Punjabi dominated, Urdu-speaking, Sunni—state.
Furthermore, relations between the founder of the Jamaat e Islami, Abul Al’a Maududi, another prominent leader in the agitation for the creation of an Islamic state, and the Government of Pakistan, were by no means smooth. Maududi, for instance, was thrown into jail by an irritated Government of Punjab in 1948 for disrupting the peace because of his insistence on potentially polaris-ing expressions of religiosity from the state (Vali Nasr 1994: 122–9). The point worth underlying here is that, for all the infl uence that Thanwi’s and Usmani’s ideas had in the early days of Pakistan, there was also opposition, which voiced itself, again and again, to the implica-tions of this vision—and with not negli-gible rates of success.
The line between Dhulipala’s repre-sentations of the intentions of the UP Muslim League with the broader char-acteristics of the state of Pakistan, therefore, might be questioned further. Other—less insistently divisive—ver-sions of the legitimacy of an Islamic state, its responsibilities and behaviour, might be equally strong candidates for locating the in t e l lectual origins of the Pakistan movement.
The 1940s were clearly a decade in fl ux. This was a time of world war, which saw enormous transfers of population across the world, and the most intensive questions ever, perhaps, of just what the responsibilities of the state towards its citizens ought to constitute. It is worth pointing out, as Dhulipala rightly does, that debates on the Pakistan movement were also informed by the fact that this was a time when the drawing of bound-ary lines on the basis of ethnic, linguistic, or religious differences were relatively frequent. The decade—and the one that succeeded—had witnessed a relatively large number of territorial partitions around the globe on the basis of ethnic, linguistic and religious divisions in, for instance, Greece, Ireland, Korea, as well as Palestine.
Many participants of the debate, such as the Raja of Mahmudabad, Thanwi, as well as Jinnah, looked across the world to bolster their claims of how and why Pakistan ought to be created. Ambedkar, in his own book about the Pakistan
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly32
demand, had also focused on the parallel of population exchanges in Bulgaria, Turkey and Greece during the interwar period (Dhulipala: 143).
In Conclusion
What Dhulipala succeeds in showing is that, at that time the creation of a sepa-rate state refl ecting a territorialised par-tition was considered quite feasible: indeed, rather than be seen as the work of a few cranky, feudal landlords, it was successfully packaged as an entirely rea-sonable demand.
Dhulipala’s book warrants a respected space in the long bookshelf of South Asia’s partition, if for no other reason
than it does simply make for very c ompelling, and archivally rich, r eading. It also serves to reveal again the always useful precept of historians about terri-toriality and the nation state: so many national boundaries are the product of contingency, of political accident, a matter of chance, that to completely buy into the subsequently crafted phi-losophy of the everlasting nature of the borders and their absolute sanctity is, to say the least, short-sighted. This is not a novel conclusion, but Dhulipala’s work does serve to illustrate this argu-ment better, more solidly, and with more archival ammunition. But to ask the question “who created Pakistan,
and what did they want,” might also open a different can of worms.
Pallavi Raghavan ([email protected]) is a fellow at the Centre for Policy Research, New Delhi.
References
Aziz, K K (1987): Rahmat Ali: A Biography, Vanguard Books, Lahore.
Chatterji, Joya (1999): “The Fashioning of a Fron-tier: The Radcliffe Line and Bengal’s Border Landscape 1947-1952,” Modern Asian Studies, Vol 33, Issue 1, January, pp 185–242.
Devji, Faizal (2013): Muslim Zion: Pakistan as a Political Idea, Hurst.
Robinson, Francis (1997): “Religious Change and the Self in Muslim South Asia since 1800,” South Asia: Journal of South Asian Studies, Vol 20, No 1.
Sheikh, Farzana (2009): Making Sense of Pakistan, Hurst.
Vali Nasr, S (1994): The Vangaurd of the Islamic Revo-lution: The Jama‘at-i Islami of Pakistan, California.
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly32
Select Issues in Macroeconomics: A Quantitative Approach edited by Bandi Kamaiah, S V Seshaiah, G R K Murty, Hyderabad: IUP Publications, 2014; pp 644, Rs 990.
Thinking through Macroeconomics
Dinesh S Hegde
This is a festschrift in honour of Dilip Nachane, an eminent scholar with knowledge and interests in
economic theory, policy, econometrics, money, banking and fi nance, history of economic thought, and philosophy of science. The volume comprises 31 papers organised into fi ve sections, namely, (i) Monetary Economics, (ii) Banking and Insurance, (iii) Financial Economics, (iv) Development Economics, and (v) Eco-nomic Theory and Econometrics.
Monetary Economics
In the section on monetary economics, the paper by Sharma and Bitchalal delves into conceptions of infl ation, especially core and headline infl ation. According to them, in India, weighted-exponential-smoothing based measures of core infl ation perform better than the conventional ex-food and ex-energy measures, which is revealed by empirical testing on grounds of lower volatility, tracking trend infl ation, and predictabil-ity of future headline infl ation over one- to two-year horizons.
Samantaraya’s paper examines the infl uence of monetary policy on infl ation and industrial output in post-reform India. The paper fi nds that the transmission
mechanism lags by about 18 and 12 months to effect infl ation and real activity respectively. While bank credit turned out to be more important by way of transmission of policy shocks for infl ation, interest rates proved to be signi-fi cant for real activity.
In Khan’s paper, the differential sec toral impact of monetary policy on industrial output is analysed with the help of the standard vector autoregression (VAR) tech-nique based on monthly data on monetary aggregate, credit aggregate, interest rate, index of industrial output, exchange rate, index of production of different sectors of the manufacturing industry and wholesale price index (WPI) during 1996–2008. It reveals the under lying transmission mech-anism of monetary policy in relation to dif-ferent sectors/ industries varying signifi -cantly with the speed of adjustment.
The paper by Parchure raises some methodological doubts about the infl uen-tial Fisher equation in macroeconomics. He brings out the fallacies underlying notions of real and expected rates of interest.
The author is sceptical about the working of the Fisher equation, which is endorsed by powerful central banks. Admittedly, there is a need to investigate the issue fur-ther, giving due consideration to the many developments (be it markets, technology, plastic money and the like) since the equa-tion was formulated fi ve decades ago.
Kumar, Srinivasan and Ramachandran strive to explain the mild infl ation since the mid-1990s compared to the high infl ation of the earlier period. Four reasons are identifi ed—better monetary policy, structural change, luck, and foreign ex-change. The study, based on a reduced form econometric model, reveals that better luck and the exchange rate regime played a dominant role in low infl ation since the mid-1990s compared to mone-tary policy and structural change.
Transmission Mechanism
A few comments are in order. First, the transmission mechanism is more complex than it appears. One would have liked to see a more elaborate discussion, especial-ly on some closely-related issues, such as high real interest rate, banks’ continued practice of lending at average rather than marginal cost, regulated return on sav-ings, etc, on the transmission mechanism. The signifi cance of such issues can hardly be emphasised enough in the recent times when one often comes across the Reserve Bank of India bemoaning that rate cuts are not being fully transmitted through banking channels.
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 33
The section on banking and insurance contains four papers, the fi rst two on the banking sector and the next two on the insurance sector. The paper on banking by Bhattacharya and Roy attempts to devise an early warning system (EWS) for policymakers on incipient fi nancial crises. After bringing out the limitations of the previous “event-based” and “index” methods, the authors propose a “signals” approach to identify leading indicators—increasing spread between bank rate and 91-day treasury bill rate, expansion in the growth of base money supply, slow-down in gross domestic propduct growth, increase in short-term external debt over international reserves, real effective ex-change rate overvaluation above trend, and rise in London Interbank Offered Rate (Libor).
On insurance, the paper by Sastry aims to estimate concentration ratios for the period 2003–08. It shows a slow decline in the concentration ratios with slowly emerging monopolistic competi-tion in the Indian insurance sector with a yet-to-be seen differentiation in prod-ucts and business models. The paper by Rao is an attempt to develop modifi ed principal-agent models to examine effi -cient risk sharing (individual and sys-temic risks) in accident/health insur-ance contracts. Given the tendency of private health providers to induce high value insurance to recover their heavy investments in capital-intensive machinery and equipment through their full utili-sation, the author makes a case for social health insurance or public hospital ser-vices irrespective of the ability to pay.
Under the banking head, much as one fi nds the studies interesting, it would have been more relevant and useful had the problem of non-performing assets, capital adequacy, and quality of assets been given their due attention. In the insurance category, important issues are taken up by the authors. One may add here that the signifi cance of the ability and willingness to pay hardly needs to be overemphasised and regulators need to bear this in mind.
Financial Economics
There are fi ve papers under the head of fi nancial economics, of which the three
by Joshi and Pandya, Rajesh and Padhi, and Lagesh deal with stock market volatility and the two by Sadath and Kamaiah, and Narasimhan and Pradhan are on expiration effects of stock futures and market integration respectively.
A clear distinction between fl uctua-tions and volatility must be borne in mind. Again, it is short-term investors and traders who keep the markets liq-uid and active in the absence of which there would not be daily quotes for the scrips. The rest, namely, long-term in-vestors, would normally continue to sit on their investments and make only pa-per profi ts/losses and may encash their holdings at some distant point in time when they require a lumpsum for block eventualities. So also one has to reckon with the corrections taking place in markets from time to time by way of reactions to global cues, domestic news, impending tax obligations, market senti-ments, etc. Volatility, however, is a matter of concern as its presence tends to make existing investors jittery and liable to move out of the market and prospective ones may be deterred from entering the market in the fi rst place. As a result, the market is left with only those with deep pockets and/or speculators. Added to this is the frequent occurrence of scams, making the problem even worse. Thus the process of widening/deepening of capital markets gets prolonged and considerably delayed. Hence, the concern with volati lity in most developing econo-mies where savings mobilisation for investment/capital accumulation con-tinues to be a big challenge.
Development Economics
There are 12 papers in the section on development economics, addressing a wide range of development-related issues —external shocks, infrastructure, credit and marketing in agriculture, trade, en-vironment, employment, inequality, savings, to technology and the like. It is diffi cult to see a common thread among them except that one comes across a comparison be-tween the pre- and post-reform periods in some papers.
The section begins with a paper by Bhanumurthy and Kumawat on external shocks to the Indian economy due to the
steep rise in global food and fuel prices in 2008 using a quarterly macro-econo-metric model. The aggressive fi scal and monetary policies responses prompted by the shocks were shown to cause huge fi scal defi cits; the mitigating factors being the market stabilisation fund with ade-quate foreign exchange reserves.
D’souza, in another paper, delves into the swift integration of the Indian econ-omy with the global economy and its impact on employment and wages; fi nding rise in contract employment and wage inequality accompanying capital infl ows and skill-intensive technology. He suggests increasing investment in human capital/skill development and greater penetration of external markets so that real wages improve and inequal-ity is mitigated.
Chatterjee’s paper brings in environ-ment as a third factor of production into the Heckscher–Ohlin model and investi-gates its implications for factor price equalisation and the Rybczynski theo-rem. Also, it is shown that when the difference in capital intensities between two countries is less than the difference in pollution intensities, abundant factors of the trading countries tend to suffer net loss in the post-trade situation.
Chaubey examines various proposals made about the well-being transform of the income component of the Human Development Index (HDI) between 1991 and 1998, and the poly-term diminish-ing power transform used in human development reports (HDRs) since 1999. It is shown that the latter, though most fl awed transform on all counts, contributes signifi cantly to the HDI, despite being against the United Nations Development Programme (Majumdar and Kusago 2012).
The paper by Dholakia et al trace the trends in technical progress during 1968–2004, its pattern during inward- and outward-looking periods as also at sectoral levels, using input–output tables for the Indian economy. Their study re-veals a continuous technical progress, though not substantial, during the entire period, but falling signifi cantly during decontrol and liberalisation (from 1983–84 to 1998–99), gathering pace thereafter due to the policy reforms.
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly34
Motiram and Vakulabharanam make a comparative analysis of alternative credit and marketing arrangements which can support smallholder agriculture. Their analysis fi nds that cooperatives work better for farmers as they tend to benefi t from joint liability and reduced risk, compared to informal trader–credi-tors and contract farming.
Admittedly, a few of the arguments like focusing on the greater penetration of e xternal markets may have limita-tions given that the underlying assump-tion of sustained expansion of the global market has been questioned in recent years. Again, the result of the extended Heckscher–Ohlin model may prompt us to wonder if it is indeed so, or are there paradoxes of the Leontief type? In either case, it remains an empirical question. As for the HDI, readers might fi nd some recent studies also of interest, like the one with alternatives maintaining the spirit of Atkinson’s formula and benefi t-ing from the logarithmic scheme (Majumdar and Kusago 2012). Also, the superiority of cooperatives as a fi nding is interesting. Surely, developing coun-tries should explore more such options
wherever appropriate, be it in agri-busi-ness, microfi nance or others to fi nd a golden mean and usher in our version of social democracy.
Economic Theory and Econometrics
The section on economic theory and econometrics comprises three papers Correa deals with time consistency bringing out the distinction between the classical perception of a system and the modern systems orientation; the former relying on its internal con-sistency and rules as against the latter based on the perspective of outsiders and regarded as a fragment of reality in space/time. He goes on to show how policymakers are better off reneging on social equilibrium and preferring discretion over rules. The next paper by McGregor traces the demographic transition over the last two centuries and demonstrates how the Malthusian vision could no longer hold by the lat-ter half of the 20th century, especially in the developed countries character-ised by rising incomes and declining fertility. The role of child support both
from the state and within the house-hold is also highlighted.
In Conclusion
It must be noted that most studies a ppear dated and much has happened over the last seven to eight years. That apart, one is still left to wonder if the widespread discomfort and even cynicism in some quarters prevalent in the recent times (which concern is also shared by the edi-tors themselves with quotations from Sen, Galbraith, Kornai and Krugman in the introduction to the volume) with re-spect to macroeconomics has been addressed. If anything, the concern is all the more relevant today, with the slowdown in Europe and China. Also it is relevant to ask, is the dog wagging the tail or the tail wagging the dog, given the undue importance that the money/fi -nance sector has come to command in the global economy? Going by the Bloomberg ranking of the most infl uen-tial persons in the world, the chief execu-tive offi cers (CEOs) of some fi nance com-panies overtake even heads of state like Barack Obama and Angela Merkel. Are their roles overstated? Again, one is
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reminded of Julius Nyerere’s concern with worsening terms of trade/balance of payments/indebtedness/reverse tran-sfer of resources in least developed coun-tries (LDCs ) prompting him to ask why his country had to export more and more tonnes of coffee or sisal to import the same one tractor and his criticism of the International Monetary Fund (IMF)/World Bank playing the doctor prescrib-ing the same medicine irrespective of the nature of sickness.
Thus, we are back to the limitations of ignoring power relations and politi-cal interests put forth by Sen, Gal-braith, Kornai, Krugman and others. Likewise, the British monarch express-ing concern at the London School of
Economics as to why none of us saw the crisis coming, assumes signifi cance and is something to ponder about. Is fi -nance capital vitiating the real picture so much as to hide more than it should reveal about the real economy? Is the unaccounted parallel economy really parallel and all too powerful so as to nullify policy effi cacy? So, whither macroeconomics? Are discretion, em-pathy/compassion to fi nd their place in the conduct of human affairs and policy as ably put forth by classical political economists alongside measures to pre-empt adverse selection and moral hazard towards attaining higher levels of social capital and effi ciency with reduction in poverty and inequality
(World Bank 2013)? Needless to say, the editors deserve our thanks for the volume under review, which is a fi tting tribute to an eminent scholar as well as a valuable addition to the literature on the macroeconomics of India, useful for students and teachers alike.
Dinesh S Hegde ([email protected])retired from the National Institute of Industrial Engineering, Mumbai.
References
Majumdar, A and T Kusago (2012): “A Note on Methodology of Treating Income in Human Development Index,” The Indian Economic Journal, Vol 60, No 2, pp 57–72.
World Bank (2013): “Growth in India,” Macroeco-nomics & Economic Growth in South Asia, http://go.worldbank.org/GRYIEFPVY0.
Books ReceivedAlam, Jayanti (2016); Parliamentary Democracy in
North-East India: A Study of Two Communities Each from the States of Assam, Meghalaya and Sikkim, Delhi: Kalpaz Publications; pp 281, Rs 990.
Alexander, Clarie, Joya Chatterji and Annu Jalais (2016); The Bengal Diaspora: Rethinking Muslim Migration, Oxon and New York: Routledge; pp xvii + 286, price not indicated.
Baig, Zubeda (2016); Women’s Superiority: Through Quran, New Delhi: Gyan Publishing House; pp 179, Rs 590.
Bala, Poonam (ed) (2016); Contesting Colonial Authority: Medicine and Indigenous Responses in Nineteenth—and Twentieth—Century India Delhi: Primus Books; pp xvii + 158, Rs 1,695.
Basu, Swaraj (ed) (2016); Reading on Dalit Identity: History, Literature and Religion, New Delhi: Orient Blackswan; pp x + 403, price not indicated.
Bhatia, Shyam (2016); Bullets and Bylines: From the Frontlines of Kabul, Delhi, Damascus and Beyond, New Delhi: Speaking Tiger; pp xiii + 243, Rs 599.
Bhonsle, Anubha (2016); Mother, Where’s My Country? Looking for Light in the Darkness of Manipur, New Delhi: Speaking Tiger; pp xi + 250, Rs 499.
Bose, Madhuri (2016); The Bose Brothers and Indian Independence: An Insider’s Account, New Delhi: Sage Publications; pp xxx + 264, Rs 750.
Breman, Jan (2016); On Pauperism in Present and Past, New Delhi: Oxford University Press; pp viii + 286, Rs 850.
Chakravarty, Deepita and Ishita Chakravarty (2016); Women, Labour and the Economy in Inida: From Migrant Men Servants to Uprooted Girl Children Maids, London and New York: Routledge; pp xviii + 141, price not indicated.
Gupta, Charu (2016); The Gender of Caste: Represent-ing Dalits in Print, Ranikhet: Permanent Black; pp xvii + 336, Rs 895.
Jha, Hetukar; Sanitation in India: A Historico- Sociological Survey, Delhi: Gyan Books; pp 102, Rs 290.
Jha, Sadan (2016); Reverence, Resistance and Poli-tics of Seeing the Indian National Flag, Delhi: Cambridge University Press; pp xxvii + 268, price not indicated.
Joseph, Sebastian (2016); Cochin Forests and the British Techno-ecological Imperialism in India, Delhi: Primus Books; pp xix + 165, Rs 1,395.
Khair, Tabish (2016); The New Xenophobia, New Delhi: Oxford University Press; pp ix + 220, Rs 495.
Krishna, Kamini (2016); India Mutiny to Mahatma and Swaraj (A History of Hundred Years), New Delhi: Gyan Publishing House; pp 297, Rs 950.
Latika, Gupta (2016); Education, Poverty and Gender: Schooling Muslim Girls in India, Oxon and New York: Routledge; pp xix + 185, Rs 895.
Mahanta, Devajit (2016); Indian Commodity Deri-vative Market: Operation and Performance, Delhi: Primus Books; pp xix + 158, Rs 1295.
Malhotra, Anshu and Siobhan Lambert-Hurley (ed) (2015); Speaking of the Self: Gender, Perfor-mance, and Autobiography in South Asia, Durham and London: Duke University Press;pp x + 312, US$ 26.95 (paper)/US$ 94.95 (cloth).
Malik, Preet (2016); My Myanmar Years: A Diplo-mat’s Account of India’s Relations with the Re-gion, New Delhi: Sage Publications; pp xviii + 237, Rs 495.
McGarr, Paul M (2013); The Cold War in South Asia: Britain, the United States and the Indian Sub-continent, 1945–1965, Delhi: Cambridge Uni-versity Press; pp xi + 391, price not indicated.
Mishra, Lokanath (2015); Gandhian Views on Edu-cation for Peace, Delhi: Kalpaz Publications; pp 264, Rs 900.
Mishra, Lokanath (2016); Peace Education: A Gender Perspective, Delhi: Kalpaz Publications; pp 313, Rs 990.
More, J B P (2016); Tamil Heroes of French India, 1870–1954: Their Role in Business, Social Reforms and in Netaji’s Freedom Struggle from Vietnam, Puducherry: Ilakkiya Book Publica-tions; pp 208, Rs 350.
More, J B P (ed) (2015); Offerings to the Muslim Warriors of Malabar: Foundation Document of Colonialism and Clash of Civilisations, Chen-nai: Saindhavi Publications; pp 164, Rs 350.
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Nahar, Emanual (ed) (2016); Inter-State Confl icts and Contentious Issues in South Asia: Challenges and Prospects for SAARC, Delhi: Kalpaz Publi-cations; pp 327, Rs 825.
Pillai, Manu S (2015); The Ivory Throne: Chronicles of the House of Travancore, Noida: Harper Collins; pp 694, Rs 699.
Purushotham, K (2015); Interrogating the Canon: Literature and Pedagogy of Dalits, Delhi: Kalpaz Publications; pp 248, Rs 825.
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Rayudhu, C S (Yogasree) (2016); Drink Urine and Live Healthy, New Delhi: GenNext Publication; pp 357, Rs 350.
Ruparelia, Sanjay (2015); Divided We Govern: Coali-tion Politics in Modern India, New Delhi: Oxford University Press; pp xxiv + 480, Rs 995.
Sahu, Bhairabi Prasad (2015); A People’s History of India 7: Society and Culture in Post—Mauryan India C 200 BC–AD 300, New Delhi: Tulika Books; pp xii + 81, Rs 200.
Sama, Sadhu S (2015); Dialectics of Evolutions Sys-tems Approach and New Frontiers of Philosophy: Part I (Partridge India); pp xxi + 567, price not indicated.
Sarkar, P C (2015); Lucknow: Buildings, Begums and The British, Delhi: Kalpaz Publications; pp 220, Rs 900.
Satia, Jay, Kavita Chauhan, Aruna Bhattacharya and Nirmala Mishra (eds) (2016); Innovations in Family Planning: Case Studies from India, New Delhi: Sage Publications; pp 292, Rs 850.
Sobhan, Rehman (2016); Untranquil Recollections: The Years of Fulfi lment, New Delhi: Sage Publi-cations; pp xx + 444, Rs 450.
The Great Climate Robbery: How the Food System Drives Climate Change and What We Can Do About It (2016); GRAIN, Daraja Press, Tulika Books and Spinifex Press; pp viii + 229, Rs 600.
Wani, Aarti (2016); Fantasy of Modernity: Roma ntic Love in Bombay Cinema of the 1950s, Delhi: Cambridge University Press; pp viii + 219, price not indicated.
Verghese, B G (2016); A State in Denial: Pakistan’s Misguided and Dangerous Crusade, New Delhi: Rupa Publications; pp x + 230, Rs 500.
Vickers, Edward and Krishna Kumar (eds) (2015); Constructing Modern Asian Citizenship, Oxon and New York: Routledge; pp xiii + 365, price not indicated.
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly36
Reality of US Farm Subsidies An Analysis of Agricultural Act of 2014
Biswajit Dhar, Roshan Kishore
Biswajit Dhar ([email protected]) teaches at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. Roshan Kishore ([email protected]) is currently a data journalist with Mint.
With the formation of the World Trade Organization in 1995, the United States farm subsidies had moved towards income support, reducing spending on price support measures. The explicit reason was that the WTO had held that the latter forms were more market distorting and had thus put limits on their spending. The new Farm Act 2014 has changed the orientation of farm spending in the opposite direction. Price-based measures are back in focus, and the US seems less concerned about breaching its WTO limits.
A fter a delay of nearly two years, lawmakers in the United States (US) passed the new Farm Act in
February 2014, thus maintaining the continuity of periodically enacting farm legislations since 1933. The process of framing the Agricultural Act of 2014 (henceforth, Farm Act 2014), which will remain effective until 2018, saw deep a divide in the US Congress regarding the level of support that the farm sector should enjoy, with a dominant segment seeking spending cuts.
The arguments against maintaining the levels of farm spending provided by the previous Farm Act (the Food, Con-servation, and Energy Act of 2008) were twofold. First, the previous Farm Act had authorised substantial increase in spending, especially for the two largest components, namely, commodity support and nutrition. The rise in commodity spending triggered a steep increase in net farm incomes by more than 80%, from $70 billion in 2007 to nearly $129 billion in 2013 (AgriBank 2015, Table 4) and therefore maintaining the past spending levels was questioned. Second, the increase in budgetary support for the farm sector in an era of tight budg-ets, found few supporters.
Farm Act, 2014 has authorised cuts in farm subsidies through changes in the structural underpinnings of farm pro-grammes. It has eliminated “direct pay-ments” programmes, which are sup-posed to be “decoupled”1 from current production and prices, while reintroduc-ing supply management programmes (better known as “defi ciency payments”), according to which payments are to be based on the difference between a statu-torily given target price and the market price. These changes have, in fact, made the commodity programmes in Farm Act, 2014 quite similar to those fi guring
in the farm legislations prior to the enactment of the Federal Agriculture Improvement and Reform (FAIR) Act in 1996.
The FAIR Act took the fi rst steps towards “decoupling” of farm payments by introducing direct payments, which were extended by subsequent farm acts. The FAIR Act also discontinued the supply management programmes for all major commodities.2 Importantly, these changes in the farm support policies were effected following the enforcement of the Agreement on Agriculture (AoA) under the World Trade Organization (WTO) in 1995. The AoA classifi es direct payments as non-distorting/minimally distorting,3 while price support and input subsidies are regarded as market distort-ing.4 This suggests that the US lawmakers had an eye on the subsidies discipline introduced by the AoA.
This article critically analyses the farm support provided by Farm Act 2014 on two counts. First, the level of support that this legislation is expected to pro-vide would be assessed. Second, it would use yardsticks provided by the WTO to comment on the impact these forms of support sanctioned by the Farm Act 2014 would have on agricultural markets. This exercise will be undertaken by focusing on three of the 12 broad areas (called “Titles”) covered by the Farm Act.5 These are commodity programmes (Title I), nutrition (Title IV) and crop insurance (Title XI), which make up for 93% of the total proposed spending in the Farm Act 2014.
Section 1 focuses on the programmes for supporting individual commodities, both direct and indirect, the latter being largely insurance programmes. Section 2 discusses the nutrition programmes, which make up for the largest component of the spending on Farm Act, 2014. In its notifi cations submitted to the Committee on Agriculture of the WTO giving account of its farm spending, the US has included spending on nutrition programmes in the “Green Box.” The US has therefore suggested that besides meeting the conditions that Annex 2 of the AoA sets for providing domestic food aid by WTO
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member countries this component of its farm legislation does not incentivise production. We would critically exam-ine whether the nutrition programmes satisfy the above-mentioned conditions. Section 3 would attempt an overall assessment of the US farm support pro-grammes from the point of view of its conformity with the WTO disciplines on farm subsidies.
1 Commodity Subsidies
Subsidies for commodities included in the Farm Act, 2014 are provided through specifi c commodity programmes as well as crop insurance schemes. The details of these programmes are elaborated here:
Commodity Subsidy Programmes in Farm Act, 2014: Three main types of support are included in the new act. These are: fi rst, Price Loss Coverage (PLC), second, Agriculture Risk Cover-age (ARC), and, third, Marketing Loan Assistance (MLA). The fi rst two of these are supply management programmes, the likes of which the US has offered to its farm sector for several decades in the past. While PLC provides price assurance to producers, the ARC protects farm rev-enues. MLA establishes minimum prices for most of the major commodities.
The PLC is a counter-cyclical payments programme6 and covers all the com-modities. The programme protects the producers of the covered crops from a fall in prices below the “reference prices” set in the legislation. One of the major crops benefi ting from the “Commodity Programs” in the past, namely, upland cotton, has been excluded from the purview of these programmes in the new farm legislation. The crop has been brought under an insurance programme, the Stacked Income Protection Plan (STAX), which is a result of the restructur-ing of the subsidies regime that the US had to agree to, following Brazil’s suc-cessful defence of its complaint before a dispute settlement panel of the WTO against the US farm subsidies’ regime.7
PLC payments are triggered when the national average farm price for a cov-ered commodity is below its statutorily-fi xed “reference price.” The payment to a farm is based on 85% of its cropped
area during a historical period (called the “base acres”)8 (Establishment of Base Acres and Payment Acres for a Farm 2012; Shields 2014) and the crop yield during this period, combined with the difference between the reference price and the average farm gate price.
The factor determining the payments that the farm owners would enjoy under the PLC is the reference price and the farm gate price. The enhancement of support that Farm Act, 2014 offers to farm producers can be seen by compar-ing the “reference prices” with the “target price” of Farm Act, 2008 for the covered commodities. Table 1 provides the details.
Table 1 indicates the extent to which farm producers stand to benefi t from the current farm act. With the exception of oats, peas and peanut, the “reference prices” are more than 50% higher than the “target prices.” Such increases in “reference prices” would provide consid-erable benefi ts to the US commodity producers during the current phase of weakening prices. In most of the major commodities, global prices in December 2015 are their lowest levels in the past six years: in case of wheat global prices have not seen the current levels since 2005 (IMF 2015).
Farm producers can choose to get their crop revenue protected against de-clines using the county ARC programme. Under this programme, payments are made on 85% of base acres when the annual crop revenue is less than 86% of
its historical level. Payments under ARC are made when the actual county crop revenue drops below the county revenue guarantee. Producers have the option of choosing that the farm-level protection is provided if they include all covered crops on their farms in the ARC individual coverage option. This option uses indi-vidual farm yields for each covered crop and then includes total crop revenue into a single, whole-farm guarantee.
Congressional Budget Offi ce (CBO), the federal agency that provides infor-mation relating to the budget to the US Congress, has been estimating the cost of implementing Farm Act 2014 ever since the legislation was on the drawing board.
In its January 2016 update, the CBO has estimated that between 2016 and 2018, the ARC and PLC taken together would cost the US taxpayers $19.7 billion, almost 70% higher than what it had estimated when the act was adopted (Weir 2016).
The third support pro-gramme, the Marketing Loan Assistance allows producers of eligible commodities to obtain a nine-month non-recourse loan in the imme-diate post-harvest period at rates specifi ed every year and to store their produce,
thus preventing distress selling. This window of support requires producers to pledge their produce as collateral. At the end of the loan period, producers are re-quired to repay the loan along with the accrued interest. However, if the mar-ket price is below the loan rate, the pro-ducers are allowed to forfeit the crop pledged as collateral to the US Depart-ment of Agriculture (USDA). The “loan rate,” in effect, establishes a price guar-antee and thus qualifi es as an “Amber Box” payment. An additional option is currently available for producers of rice or upland cotton. These producers may opt for benefi ts that are available if the posted county price, or a USDA-announced average world price falls below the re-spective USDA loan rates.
“Loan rates” for all eligible commodities, barring cotton, have been left unchanged
Table 1: Comparing Reference Prices and Target PricesCommodities Target Price Reference Price Difference (Farm Act, 2008) (Farm Act, 2014) between Target and Reference Prices
Wheat, $/bu 3.65 5.5 51%
Corn, $/bu 2.35 3.7 57%
Sorghum, $/bu 2.28 3.95 73%
Barley, $/bu 2.39 4.95 107%
Oats, $/bu 1.766 2.4 36%
Rice, $/cwt 8.15 14.00; 16.10 +72%; +98% for temperate for temperate japonica japonica
Soybeans, $/bu 5.56 8.4 51%
Minor oilseeds, $/lb 0.1188 0.2015 70%
Peanuts, $/ton 459 535 17%
Peas, dry, $/cwt 8.32 11 32%
Lentils, $/cwt 12.81 19.97 56%
Small chickpeas, $/cwt 10.36 19.04 84%
Long chickpeas, $/cwt 12.81 21.54 68%Source: Shields (2014).
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as compared to those stipulated in the Farm Act, 2008. For cotton, the new marketing loan rate is calculated as the simple average of the adjusted world price for the two preceding marketing years, within a range of 45 cents/lb to 52 cents/lb, as against a fi xed 52 cents/lb in the 2008 farm bill.
Crop Insurance: Farm legislations in-clude a crop insurance programme that supports producers when they suffer losses due to natural disasters. Although crop insurance has long been provided to the producers, this component of the Farm Act, 2014 has acquired added signifi cance owing to the inclusion of a specifi c insurance policy for cotton, the STAX. The introduction of STAX was a part of the agreement between the US and Brazil, for settling the long-standing dispute between the two countries on US subsidies on upland cotton. The dispute arose following Brazil’s complaint to the WTO in 2002, in which it was pointed out that a number of subsidies enjoyed by the producers of upland cotton, in-cluding marketing loans, direct payments, counter-cyclical payments, and export credit guarantees, provided “direct or indirect support to the US upland cotton industry” (WTO 2002: 2),9 using which the US was able to become the world’s largest exporter of upland cotton, with a share of 38% (WTO 2002: 5). This, according to Brazil had adversely affected its produc-tion and exports. The dispute settlement process ruled in favour of the complain-ant, forcing the US to agree to modify the support it was extending to upland cotton.
In the new upland cotton support regime, counter-cyclical payments were eliminated, while marketing loan rates for the commodity were reduced. STAX was introduced, which had the follow-ing features:(i) STAX covers countywide revenue losses of greater than 10% but not more than 30% of expected county revenue, in other words, a loss of at least 10% must occur at the county level before any indemnity is made under STAX.(ii) Total indemnity payments, including both STAX and other crop insurance, cannot exceed the total insured value of the crop.
(iii) For producers to be covered under the STAX, payment of 20% of the STAX policy premium is mandatory. Federal government pays the remaining 80% share, which is more generous than for other insurance products.
Brazil’s persistence with the dispute on upland cotton means that major step has been taken towards resolving the long-pending cotton subsidies issue, which has been consistently been raised by the so-called C-4 countries, Benin, Burkina Faso, Chad and Mali that have lost export revenues due to their inability to compete with subsidised US cotton. Over the decades, the interests of these cotton exporters have been seriously undermined by major economies that have supported large players in the global markets for agricultural commodities. The eventual resolution of the cotton subsidies issue should be a major step towards providing better opportunities to the C-4 countries in global markets.
Elimination of Direct Payments: Possi-bly the most signifi cant of the changes brought about by the Farm Act 2014 is the elimination of direct payments. We have mentioned earlier that the FAIR Act has introduced this form of subsidies in 1996 through the Production Flexibility Contract (PFC), which were in the nature of income transfers as a part of the rethinking on farm subsidies. This form of subsidies was projected as the resolve of the country’s farm administration to move towards the use of support meas-ures that did not incentivise the farming communities through price support or input subsidies. Payments under direct payments were based on historical pro-duction and a payment rate.
Direct payments became the lynchpin of the US farm support programmes under the AoA. The farm administration argued that direct payments were “decoupled” from current prices and production and hence did not distort the markets. This form of payments was therefore identifi ed as a Green Box measure. While this claim that direct payments introduced less distortion was highly questionable (Young and West-cott 2000: 763 ff),10 discontinuation of this form of payments signals a major
change in the thinking of the US regard-ing its farm subsidies regime.
For any given farm, the direct pay-ment was derived using three factors: (i) average number of acres planted on the farm during a historical period specifi ed by the Farm Act, (ii) the yield of the crop produced during a historical period, and (iii) a payment rate fi xed by the Farm Act. A fi xed percentage of this product, again specifi ed by the legislation, was doled out as direct payment. In order to receive the direct payments, farm owners were only required to meet the criteria of having produced a particular crop during a historical period. During the years they received the payments, farm owners had complete fl exibility to decide which crops they wanted to plant or even produce nothing at all. A mere state-ment regarding their status as farmers would entitle them to the payments.
Earlier US farm administrations had supported the continuation of direct payments, doling out more than $46 billion in direct payments to farmers and other producers between 2003 and 2011 (United States Government Account-ability Offi ce 2012: 8). However, this form of payments did not stand scrutiny on a number of counts when such an ex-ercise was done prior to the enactment of the Farm Act 2014. The Government Accountability Offi ce (GAO) that made an economic assessment of the direct pay-ments found that these payments could not be justifi ed on three counts (United States Government Accountability Offi ce 2012: 16). One, farm owners received direct payments even in years of record farm income. Two, the payments were made despite the fact that average in-comes of farm households were higher than those of the average for all house-holds taken together.11 And, three, the largest farm received an overwhelming share of direct payments since the pay-ments were based on farm size.12
Another important argument that was used against the continuation of direct payments was its impact on the budget. When the FAIR Act introduced the PFC, the US budget defi cit was 1.3% of its gross domestic product (GDP), which ballooned to 7% in 2012, the last year of the Farm Act 2008. The US Farm Administration
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was therefore under immense pressure to reduce support for the farm sector. Elimination of direct payments became one of the fi rst moves towards respond-ing to this pressure.13
Since direct payments were compen-sating the landowners (as opposed to the tenants, the producers on the land), their impacts on the prices of land and rental rates became an important issue. USDA studies concluded that direct pay-ments resulted in higher prices for buy-ing or renting land since in some cases the payments go directly to the land-owners. This raised land values prompt-ing landlords to increase cash rental rates (USDA 2009: 18). However, Kirwan fi nds that direct payments have an op-posite impact, with the tenants capturing 75% of the subsidy. This, he predicts, is due to the less than perfect rental market arising from farm consolidation which results in fewer tenants enjoying increas-ing “market power in the farmland rental market” (Kirwan 2009: 141). Reliance on subsidies that are linked to prices and outputs, together with the elimination of direct payments, shows a clear change in the orientation of the US farm subsidies. Attempts at decoupling of payments from prices made over the past two decades, an apparent move to reduce the distor-tions in the agricultural markets, have now been given up. What these changes imply for subsidy commitments that the US has made to the WTO AoA will be dis-cussed below in a later section.
2 Nutrition Programmes
Around 80% of the spending in the Farm Act, 2014 has been earmarked for food aid programmes. This sole fact under-lines the importance of analysing food aid programmes in the US to develop an understanding of its domestic farm sup-port policies. The Supplemental Nutri-tion Assistance Program (SNAP), known as the Food Stamp program earlier, is the biggest food aid programme in the US. The discussion here is an attempt to understand motivations for the Food Stamp program and the manner in which it has been implemented, espe-cially in recent years when the SNAP benefi ciaries have been linked directly to the “farmers’ markets” which have
also grown rapidly as a result. This indi-cates that SNAP is an important policy instrument to stimulate the US agrarian economy and that it is more than a benign pursuit of food security.
The advent of food aid policy in the US has been an integral part of farm sup-port policies and goes back to the early 1930s. Institutionalisation of an expen-sive farm support programme in the 1930s ran the risk of leading to resentment in the urban areas. Farm support to farmers was also leading to over-production as they were assured of higher prices irre-spective of market conditions. It was against this background that the idea of food aid was proposed to achieve the twin objectives of disposing of surplus agricultural production and providing relief to the poor in urban areas, which was carried out through the establish-ment of the Federal Surplus Relief Cor-poration in 1933.14
To put it simply, food aid policies came up in the US to act as a balancing factor in a surplus-ridden food economy. Various farm acts and food stamp legislations have articulated this connection in a matter of fact way. Title II of the 1956 Agricultural Act (Agricultural Act of 1956)15 put the responsibility on the US secretary of agriculture to a “program of orderly liquidation” of surpluses. Among the clear objectives of the 1964 Food Stamp Act were the following: (i) to strengthen the agricultural economy; (ii) to help to achieve a fuller and more effective use of food abundances; and (iii) to provide for improved levels of nutrition among low-income house-holds through a cooperative Federal-State programme of food assistance to be operated through normal channels of trade. Commentators have also pointed out that entitlement to food aid pro-grammes has been linked to agricul-tural surpluses rather than nutritional objectives (Andrews and Clancy 1993: 63). Much of these connections remain unchanged till date.
The crucial factor which has allowed the realisation of these objectives for US policymakers is the eligibility criteria. The 1964 Food Stamp Act allowed those households to participate whose income was “determined to be a substantial
limiting factor in the attainment of a nu-tritionally adequate diet” (The Food Stamp Act of 1964). The eligibility crite-rion was not based on the offi cial poverty line until 1979, when an amendment to the Food Stamp Act made in 1977 became effective (Congressional Budget Offi ce 2013). According to this amendment, any household with an income of 130% of the offi cial poverty line was eligible for receiving the benefi ts. However, income from 18 potential sources, through which households could receive funds from the government were not to be counted. This approach remains more or less un-altered till date.
Another important factor to be noted is the change in the basket of food items provided in terms of food aid. The 1964 Food Stamp Act provided for giving a “low-cost nutritionally adequate diet.” Over time, this principle has been diluted and a wide basket of food items includ-ing cereals, meat, fruits and vegetables, dairy products, soft drinks and energy drinks, and even holiday gift baskets can be bought using food aid entitlements (USDA 2015d).
Over the years, two features of the food aid programmes have been parti cularly noticeable, which are shown in Figure 1 (p 40). The fi rst is the rapid increase in the number of benefi ciaries, especially the middle of the previous decade. The second fea-ture is a steep increase in the difference between the costs and the benefi ts of the programmes, which suggests in-creasing ineffi ciency in maintaining the programmes.
As has been pointed out, the food aid programme in the US has had a direct and stated objective of disposing of sur-plus agricultural production. This clearly shows that food aid programmes have been an important stimulus for agricul-tural production in the US economy. The link of the food aid programme to the overall economy is also not very diffi -cult to see. Figure 2 (p 40) shows that there is a clear congruence in the par-ticipation in the food stamp programme and unemployment levels in the US economy. During times of higher unem-ployment, food stamp entitlements help boost overall consumption expenditure
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and hence aggregate demand in the domestic economy.
The connection referred to above is not denied by policymakers in the US. On the contrary, the role of food aid spend-ing as an important stimuli and counter-cyclical measure is well-recognised in US’s macroeconomic policymaking. SNAP
was allocated close to $20 billion of the stimulus package that was put in place by the American Recovery and Reinvest-ment Act (ARRA) of 2009 (Monke et al 2009) The signifi cance of SNAP can be gauged by the fact that three-fourths of the allocations made for agriculture, nutrition, and the rural programmes in the ARRA are accounted for by this pro-gramme. The Food and Nutrition Service (FNS) of the USDA has justifi ed the spend-ing on SNAP as provided for in the ARRA
on the ground that this programme would bring at least four sets of public benefi ts. These are: (i) to improve the food secu-rity of low-income households; (ii) to create and save jobs; (iii) to stimulate the
economy; and (iv) to stabilise the state agencies responsible for SNAP adminis-tration. Analysts have pointed out that viewed in terms of stimulating the US
economy, the food stamp program/SNAP
is among the most effective proposals in-cluded in the ARRA. It has been shown that increasing food stamp payments by $1 increases GDP by $1.73 (Table 2) and is much more effective in stimulating the economy as compared to measures like tax cuts.
The US has consistently maintained that there is no di-rect relation between its food aid policies and the agricultural markets and has accordingly included spending on domestic food aid as a Green Box meas-ure. However, there is one im-portant fact in this regard which needs to be underlined regarding food aid in the US. This pertains to the rapid increase in the numbers of farmers’ markets (USDA 2015a) and direct marketing farmers (USDA
2015b) that have become increasingly important for the implementation of the food aid programmes. The Farmers’ Market Nutrition Program was estab-lished by the Congress in 1992 to provide fresh farm produce for nutrition pro-grammes for women and children. Later it was expanded by allowing SNAP bene-fi ciaries to claim their entitlements by buying items from these markets.
When the Farm Act 2008 was author-ised, there were 753 farmers’ markets, which accounted for $2.6 million in SNAP entitlement redemptions. By Sep-tember 2014, the number of farmers’ markets had increased to 5,175 and SNAP redemptions were up to nearly $19
million. Figure 3 shows the trend in number of farmers’ markets in the US. In June 2015, the USDA announced a fur-ther increase in farmers’ markets to 6,400, which meant that since 2008, farmers’ markets had registered over eightfold increase (USDA 2015c). The in-creasing importance of farmers’ markets is a direct indication of strengthening of state-sponsored linkage between food aid programme and local agricultural production.
The stated objective of the US domestic food aid programmes since their incep-tion has been to dispose of the country’s surplus food stocks. This intent has become stronger over the years, espe-cially through the authorisation of the farmers’ markets to establish an explicit link with the SNAP. This means that the SNAP is creating the demand for provid-ing an opportunity to the farmers to liquidate their stocks of food, and this should be considered as a commercial operation. However, the US has labelled its domestic food aid as a non-market distorting form of subsidy and has included this component as a Green Box measure. The following discussion critically looks at this issue.
Figure 2: Unemployment Rate and SNAP Participation in the US
Un
emp
loym
ent (
%)
US unemployment rate (annual average)
SNAP average participation
Part
icip
atio
n ('
'00
0)
12
10
8
6
4
2
0
60,000
50,000
40,000
30,000
20,000
10,000
0
1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: Authors’ calculations using data from United States Department of Agriculture and Bureau of Labour Statistics.
Figure 1: Supplemental Nutrition Assistance Program (Participation and Costs)(I
n th
ousa
nd
s)
($ m
illio
ns)
60,000
50,000
40,000
30,000
20,000
10,000
0
5,000
4,000
3,000
2,000
1,000
0
Average participation
Difference of costs and benefits
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2014
Source: Data from United States Department of Agriculture.
Table 2: Implications of the Bush Stimulus Package (One year $ change in real GDP for a given $ reduction in federal tax revenue or increase in spending)
Tax cuts Non-refundable lump-sum tax rebate 1.02
Refundable lump-sum tax rebate 1.26
Temporary tax cuts Payroll tax holiday 1.29
Across the board tax cut 1.03
Accelerated depreciation 0.27
Permanent tax cuts Extended alternative minimum tax patch 0.48
Make bush income tax cuts permanent 0.29
Make dividend and capital gains tax cut permanent 0.37
Cut in corporate tax rate 0.3
Spending Increases Extending unemployment benefits 1.64
Temporary increases in food stamps 1.73
General aid to state governments 1.36
Increased infrastructure spending 1.59Source: Authors’ calculations using data from Zandi (2008).
Figure 3: Number of Farmers’ Markets in the US 7,000
6,000
5,000
4,000
3,000
3,000
2,000
1,000
0 2008 2010 2011 2012 2013 2014 Aug 2015
753
1,611
2,445
3,214
4,071
5,175
6,400
Source: United States Department of Agriculture.
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3 Compatibility with WTO
While adopting the AoA, WTO members had committed to put a check on the market distorting subsidies; that is, those that infl uence production and prices, thus giving unfair advantages to the recipients of the subsidies in the markets. The largest volumes of these subsidies were given by the OECD countries and therefore the expectation was that the AoA would rein in subsidies, especially those granted by the largest subsidisers, the US and the EU. These expectations have been belied. Table 3 shows the subsidies that the US has granted over the past two decades to support its producers, which have been reported in its domestic support notifi cations.
Since the WTO was established in 1995 and until the latest year for which data are available, the US has more than dou-bled its production-related subsidies or domestic support. As mentioned earlier, this increase has taken place largely because of domestic food aid, which accounted for more than three-fourths of the total spending. But, the US has claimed that domestic food aid is a Green Box measure, and it is therefore under no obligation to limit spending on its food aid programmes. This has enabled the US to declare to the WTO that its level of spending on farm subsidies in well within its current limit of $19.1 billion.
Contrary to what the US has declared, we argue that the US domestic food aid programmes should not be treated as a Green Box measure since we had shown in the previous section that it has an explicit link to the market. According to the AoA, farm subsidies can be included in the Green Box if they meet the follow-ing parameters. First, they must “meet the fundamental requirement that they
have no, or at most minimal, trade-distorting effects or effects on produc-tion.” Second, these measures should “not have the effect of providing price support to producers.”
In Section 2, we had alluded to the counter-cyclical nature of SNAP and its importance in stimulating agricultural production in the US. The growing im-portance of farmers’ markets, which have created a direct link between local agricultural production and government benefi ts under SNAP, is making this connection more and more obvious. In addition to these factors, the SNAP is also in violation of basic tenets laid down in Annex 2 of AoA rules for food-aid programmes to qualify as Green Box expenditure. These rules require that benefi ciaries must be selected on the basis of “clearly-defi ned criteria related to nutritional objectives” (GATT 1994). As has been pointed out already, eligibility for SNAP is based on an income criterion. In addition to a violation of eligibility criterion, routing of SNAP benefi ts through farmers’ markets also amounts to creat-ing a direct link between agricultural production and food aid. Not only has the US successfully averted any indict-ment on these issues in the WTO, it has also been successful in preventing demands for genuine reforms to allow pursuit of food security in Third World
countries (Dhar and Kishore 2014).
Farm Act, 2014 could hasten the move towards the US breaching its domestic support limit set by the AoA ($19.1 billion), as the fall in market prices in all major com-modities would necessi-tate larger outlays in all programmes to support
farm incomes (Schnepf 2015: 29). This re-orientation of the US domestic support away from income support towards price support measures will no doubt result in signifi cant stepping up of distortions in global agricultural markets, especially because the US is among the major ex-porters of all prominent commodities.16
It is the wider ramifi cations of the US’s stance towards its commitments (or more
precisely, the lack of it) that countries like India must be mindful of. By ignor-ing WTO’s domestic support disciplines, the US is seems to be signalling the with-drawal of its support for the framework of rules provided by the AoA. Its focus is clearly on the preferential trading arrangements, in particular the mega-regional trade agreements like the Trans-Pacifi c Partnership (concluded in 2015 with 11 other countries) or its engage-ment with the EU for concluding the Trans Atlantic Trade and Investment Partnership, which exclude the issue of agricultural subsidies and thus legiti-mise a highly distorted trade in agricul-tural products.
Notes
1 “Decoupled payments are fi xed income trans-fers that do not depend on the farmer’s produc-tion choices, output levels, or market conditions. Decoupled programme benefi ts do not subsi-dise production activities, inputs, or practices. These income transfers do not change per-unit net returns, so they have no direct effect on production decisions for specifi c commodities” (Burfi sher and Hopkins 2004: 7).
2 The products included were wheat, corn, grain sorghum, barley, oats, rice, and upland cotton.
3 Included in either Article 6.5 of the AoA (“Blue Box” payments), or Annex 2 of AoA (“Green Box” payments). The “Green Box” payments are those that do not incentivise the producers of agricultural commodities.
4 Payments made in accordance with Article 6.4 of the AoA, commonly known as the “Amber Box” payments. WTO members must limit their spending on the latter set of subsidies. While for developing countries like India, spending on the “Amber Box” must be limited to 10% of the value of agricultural production, for the developed countries, the limit is 5%.
5 US farm acts are complex pieces of legislations which cover a large number of areas that are directly or indirectly linked to agriculture. Farm Act, 2014 includes 12 “Titles” that are in-cluded in Annex 1.
6 Farm Act, 2008, included a programme called the “counter cyclical payments” or CCP, which has been renamed as the Price Loss Coverage or PLC in the new farm act.
7 Brazil made a complaint to the dispute settle-ment body of the WTO in 2002. This issue would be elaborated in a later section.
8 Farm Act, 2014 allows the farm owners to adopt a convenient period for calculating the “base acres,” the area they used for “harvest, grazing, haying, silage, or other similar pur-poses.” It may choose the period 1998 to 2001 crop years, as was provided in the Farm Act, 2008. They can also update individual crop base acres by using actual crop mix (plantings) during 2009–12.
9 Brazil also targeted US’s export credit guarantee programmes, namely, GSM-102, GSM-103, and the Supplier Credit Guarantee Programme (SCGP).
10 Several studies have pointed out that the so-called “decoupling” of direct payments was at best partial since the increased incomes from direct payments allowed the producers to in-vest more on their farms. In addition, assured
Table 3: US Domestic Support as Notified to the WTO ($ billion)Categories 1995 2000 2005 2008 2009 2010 2011 2012
Green Box 46 50 72 86 101 119 125 127
of which: Domestic food aid 37 32 51 61 79 95 103 107
Direct income support 5 6 6 6 6 6 5 5
Blue box 7 0 0 0 0 0 0 0
Amber box 8 24 19 16 12 11 14 12
Total subsidies 61 74 91 102 112 130 139 140
Permitted level of subsidies 23.1 19.1 19.1 19.1 19.1 19.1 19.1 19.1Source: US notifications to the WTO capturing its domestic support commitments (various years).
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income transfers from the government enabled the producers to undertake additional risks with a view to garnering higher returns.
11 In 2010, average farm household income was 25% higher than the average all households.
12 In 2011, top 10% of the recipients received 51% of direct payments.
13 In November 2013, the Congressional Budget Offi ce estimated that removing direct pay-ments from the statute books could result in a saving of about $25 billion in eight years be-tween 2015 and 2023 (Congressional Budget Offi ce 2013: 18).
14 Secretary of Agriculture Henry A Wallace later said of the creation of the FSRC: “Not many people realised how radical it was—this idea of having the government buy from those who had too much, in order to give to those who had too little. So direct a method of resolving the paradox of want in the midst of plenty could never have got beyond the discussion stage before the crisis years of 1933” (Roth 2000).
15 Agricultural Act of 1956, Public Law 84-540, 70 Stat 188, Sec 201.
16 In 2013, the US was the largest exporter of wheat, maize and cotton, the second largest exporter of soybeans and the third largest ex-porter of rice.
References
AgriBank (2015): “Addressing the Agriculture Effi -ciency Cycle: It’s Time to Drive Down Produc-tion Cost Per Unit,” accessed from http://info.agribank.com/agrithought/Documents/Agri-Thought_AgEffi ciencyFinal.pdf.
Agricultural Act of 1956 (1956): Pub L No 84-540, 70 Stat 188, accessed from: http://national-aglawcenter.org/wp-content/uploads/assets/farmbills/1956.pdf.
Agricultural Act of 2014 (2014): (H.R. 2642; Pub.L. No 113–79, accessed from: www.gpo.gov/fdsys/pkg/BILLS-113hr2642enr/pdf/BILLS-113hr2642enr.pdf.
Andrews, Margaret S and Katherine L Clancy (1993): “The Political Economy of Food Stamp Program in the United States”, Political Economy of Food and Nutrition Policies, Per Pinstrup Anderson (ed), Washington DC: International Food Policy Research Institute.
Burfi sher, Mary E and Jeffrey Hopkins (2004): “Decoupled Payments in a Changing Policy Setting,” Agricultural Economic Report No 838, accessed from: http://www.ers.usda.gov/me-dia/874729/aer838_002.pdf.
Congressional Budget Offi ce (2013): “Options for Reducing the Defi cit: 2014 to 2023,” Congress of the United States, November, accessed from: https://www.cbo.gov/sites/default/fi les/cbofi les/attachments/44715-OptionsForReducingDefi -cit-3.pdf.
Dhar, Biswajit and Roshan Kishore (2014): Domestic Food Security and Multilateral Trade Rules: A Critical Evaluation of the Available Options, Asia-Pacifi c Trade Economists’ Conference: “Trade in the Asian Century—Delivering on the Promise of Economic Prosperity,” 22 Sep-tember, accessed from: http://www.unescap.org/resources/domestic-food-security-and-multilateral-trade-rules-critical-evaluation-available-options
Establishment of Base Acres and Payment Acres for a Farm (2012): 7 US Code § 7911, accessed from: https://www.law.cornell.edu/uscode/pdf/uscode07/lii_usc_TI_07_CH_106_SC_I_SE_7911.pdf.
The Food Stamp Act of 1964 (1964): “Public Law 88-525, 88th Congress,” HR 10222, 31 August, accessed from: http://www.fns.usda.gov/sites/default/fi les/PL_88-525.pdf.
GATT (1994): “Agreement on Agriculture,” Para-graph 4, Annex 2, Geneva, accessed from: https://www.wto.org/english/docs_e/legal_e/14-ag.pdf.
IMF (2015): IMF Primary Commodity Prices, Monthly Data, available at: http://www.imf.org/external/np/res/commod/index.aspx.
Kirwan, Barrett E (2009): “The Incidence of US Agricultural Subsidies on Farmland Rental Rates,” Journal of Political Economy, Vol 117, No 1.
Monke, Jim et al (2009): “Agriculture, Nutrition, and Rural Provisions in the American Recovery and Reinvestment Act of 2009,” Congressional Research Service, R40160, accessed from: http://nationalaglawcenter.org/wp-content/uploads/assets/crs/R40160.pdf.
Ross, C (1988): The Food Stamp Program: Eligibility and Participation, Washington DC: US Congress, Congressional Budget Offi ce, accessed from: https://www.cbo.gov/sites/default/fi les/100th-congress-1987-1988/reports/88-cbo-001_0.pdf.
Roth, Dennis (2000): Food Stamps: 1932–1977: From Provisional and Pilot Programs to Permanent Policy, Economic Research Service, US Depart-ment of Agriculture, accessed from: www.nal.usda.gov/ric/ricpubs/foodstamps.htm.
Schnepf, Randy (2014): “US Farm Income, Con-gressional Research Service,” R40152, Wash-ington, accessed from: http://fpc.state.gov/doc-uments/organization/223456.pdf.
— (2015): “2014 Farm Bill Provisions and WTO Compliance, Congressional Research Service,” R4381, accessed from: https://www.fas.org/sgp/crs/misc/R43817.pdf.
Shields, Dennis A (2014): “Farm Commodity Provi-sions in the 2014 Farm Bill (PL 113-79),” Con-gressional Research Service, R43448, accessed from: http://nationalaglawcenter.org/wp-con-tent/uploads/assets/crs/R43448.pdf.
United States Government Accountability Offi ce (2012): “Farm Programs: Direct Payments Should Be Reconsidered,” accessed from: http://www.gao.gov/assets/600/592105.pdf.
USDA (2009): “Economic Research Service, Farm and Commodity Policy: Program Provisions: Direct Payments,” Washington DC, quoted by United States Government Accountability Of-fi ce (2012), Farm Programs: Direct Payments Should Be Reconsidered, p. 18, accessed from: http://www.gao.gov/assets/600/592105.pdf.
— (2015a): “EBT: What Is a Farmers’ Market? Food and Nutrition Service,” accessed from: http://www.fns.usda.gov/ebt/what-farmers-market.
— (2015b): “Supplemental Nutrition Assistance Program (SNAP)—Farmers’ Market Equipment Funds: A Funding Opportunity for Certain Farmers’ Markets and Direct Marketing Farm-ers,” accessed from: http://www.fns.usda.gov/sites/default/fi les/FM-update.pdf.
— (2015c): “SNAP Benefi t Redemptions through Farmers and Farmers’ Markets Show Sharp Increase,” Release No FNS 0007-15, 25 June, accessed from: http://www.fns.usda.gov/pressrelease/2015/fns-0007-15.
— (2015d): “Supplemental Nutrition Assistance Program (SNAP): Eligible Food Items, Food and Nutrition Service,” accessed from: http://www.fns.usda.gov/snap/eligible-food-items.
Weir, Anne (2016): “The Empty Promise of Farm Subsidy ‘Reform’ Savings,” Environmental Working Group’s AgMag, 29 January, accessed from: http://www.ewg.org/agmag/2016/01/empty-promise-farm-subsidy-reform-savings.
WTO (2002): “United States—Subsidies on Upland Cotton: Request for Consultations by Brazil,” WT/DS267/1, G/L/571, G/SCM/D49/1, G/AG/GEN/54, 3 October, Geneva.
Young, C Edwin and Paul C Westcott (2000): “How Decoupled Is US Agricultural Support for Major Crops?,” American Journal of Agricultur-al Economics, 82, No 3.
Zandi, Mark M (2008): “Assessing the Macroeco-nomic Impact of Fiscal Stimulus 2008,” Moody’s Economy.com available at https://www.economy.com/mark-zandi/documents/Stimulus-Impact-2008.pdf.
Annex I: ‘Titles’ of Farm Act, 2014
Title I: Commodity Programs
Title II: Conservation
Title III: Trade
Title IV: Nutrition
Title V: Credit
Title VI: Rural Development
Title VII: Research
Title VIII: Forestry
Title IX: Energy
Title X: Horticulture and organic agriculture
Title XI: Crop insurance
Title XII: Miscellaneous
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 43
Some Puzzles about FirmsAnalyses of India’s Informal Manufacturing Sector
Rajesh Raj S N, Kunal Sen
This paper forms part of a larger study funded through the Leverhulme Small Research Grant Scheme instituted by the British Academy (Grant No SG121855). We thank the British Academy for fi nancial support. This paper uses unit-level data on informal fi rms from the National Sample Survey Offi ce, and access to the same is gratefully acknowledged. We are also grateful to an anonymous referee for comments on the paper. The usual disclaimers apply.
Rajesh Raj S N ([email protected]) teaches at the Sikkim University, Sikkim. Kunal Sen ([email protected]) teaches at the University of Manchester, United Kingdom.
Despite the presence of a large number of
manufacturing firms in the informal sector in India, we
know very little about their characteristics and evolution
over time. We present some puzzles about firms in the
Indian informal manufacturing sector, using unit-level
data from the National Sample Survey Office surveys of
unorganised enterprises from 2000–01 to 2010–11.
There is clear evidence of a positive relationship between
worker wages and firm productivity, indicating the
importance of improving firm productivity in the Indian
informal sector as a means to improve the living
standards of workers. Our analysis also shows that there
are social and economic barriers to informal enterprises
increasing their productivity, which is a matter of major
policy concern. There are also gender-related differences
in the productivity of firms. Targeted government
programmes are needed to address the issues that
socially disadvantaged groups and female entrepreneurs
face in the informal manufacturing sector.
The informal manufacturing sector has remained a persis-tent phenomenon in India, in spite of rapid economic growth in recent decades. In India, there has been well-
developed literature on the characteristics and behaviour of fi rms in the formal manufacturing sector (Mookherjee 1995; Gokarn et al 2004). However, we know very little about the nature of fi rms in India’s informal manufacturing sector. This is surprising, given that the majority of manufacturing fi rms in India are located in this sector. The presence of manufacturing dualism in India—a large low-productivity low-wage informal sector, with a large number of fi rms, alongside a relatively small high-productivity high-wage formal sector, with fewer fi rms—has been a matter of policy concern. Several decades of manufacturing growth has done little to reduce the disparity in productivity and wages between the formal and informal sectors (Little et al 1987; Mazumdar and Sarkar 2008; World Bank 2005; NCEUS 2009; Kathuria et al 2013).
What constrains fi rm growth, productivity, and wages in the informal manufacturing sector in India? How different are household and non-household fi rms, which make up the Indian informal manufacturing sector? How have fi rm size and productivity changed in the 2000s, a period of rapid economic growth in India? In this paper, we attempt to address this gap in the literature by investigating informal sector manufacturing fi rms in India, using rich unit-level data on these fi rms from the National Sample Survey Offi ce (NSSO) for the years 2000–01, 2005–06 and 2010–11. We set out a few empirical puzzles about fi rms in the informal manufacturing sector that need further analysis. We then conduct a simple multivariate analysis of the correlates of wages and productivity in the sector to better un-derstand which of the characteristics of fi rms matter in explain-ing variations in wages paid to workers and fi rm productivity.1
Puzzle 1: Rural DMEs Larger Than Urban DMEs
Firms in urban areas are expected to be larger than those in rural areas. Population density is higher in urban areas, which implies that the markets for products made by informal fi rms would be larger as well. On the contrary, we fi nd that rural directory manufacturing establishments (DMEs) are larger in size than urban DMEs.2 Moreover, rural DMEs are increasing in size as compared to urban DMEs.3 This is clear from Figure 1 (p 44).4 We see that the size of workforce employed by an average DME in the rural sector increased from 12 workers in 2000–01 to 14 workers in 2010–11, while the size of an urban DME witnessed only a marginal increase during this period. Our
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly44
rural–urban comparison of fi rm size across enterprise types also shows that there has not been any signifi cant change in the size of an average fi rm in the own-account manufacturing enterprises (OAMEs) and non-directory manufacturing estab-lishments (ND ME) categories in both rural and urban areas during this period.
As a consequence of the stagnation in the size of urban DMEs, there is little change in the size of the average DME in the combined rural and urban sample over the period 2000–01 to 2010–11 (Figure 2).5 We also noticed a marginal decline in the average size of a fi rm in the OAME and NDME types. In absolute terms, the number of workers employed by an aver-age DME has increased from 10 workers in 2000–01 to over 11 workers in 2010–11.
Puzzle 2: Inverted-U of Size and Productivity
There has been a consistent increase in the number of fi rms in the smallest size category (1–2 workers, which are mostly OAMEs) and the largest size categories (16–19 workers, and 20 and above) over the period 2000–01 to 2010–11 (Figure 3). In contrast, the intermediate size classes (3–5 size category, which are mostly NDMEs, 6–9 size category and 10–15 size category) witnessed a
substantial decline in the number of fi rms. Perhaps more strik-ing is the inverted-U shaped relationship between fi rm size and labour productivity in the Indian informal manufacturing sec-tor.6 Figure 4 clearly shows that fi rm productivity increased steadily up to the 10–15 size category and then declined.
This perhaps points to two possible developments happening simultaneously in the informal sector: (a) lack of graduation of fi rms from the status of being a family fi rm to a non-family fi rm employing at least one hired worker, as evident from the shrinking size of the average fi rm in the informal sector (from 2.15 in 2000–01 to 2.02 in 2010–11); and (b) a lack of transition of fi rms from the informal sector to the formal sector, as evident from the accumulation of fi rms in the border categories
(at the unorganised/organised fi rm threshold, which is 10 workers for fi rms with power, 20 workers without power). Thus, there is transition within the non-household segment of the informal sector till they reach the unorganised/organised fi rm-size threshold as defi ned by the Factories Act, at which point few fi rms may be making the transition to the formal/organised sector.
Figure 1: Firm Size by Enterprise Type and Sector, 2000–01 to 2010–11
Aver
age
Firm
Siz
e
Ave
rag
e Fi
rm S
ize
14
12
10
8
6
4
2
0 OAME NDME DME OAME NDME DME Rural Urban
OAME, NDME and DME stand for own-account manufacturing enterprise, non-directory manufacturing establishment and directory manufacturing establishment respectively.Source: Authors’ computations based on NSSO data.
2005–06
2000–01
2010–11
Ave
rag
e Fi
rm S
ize
12
10
8
6
4
2
0 2000–01 2005–06 2010–11
Same as Figure 1.Source: Authors’ computations based on NSSO data.
Figure 2: Firm Size by Enterprise Type, 2000–01 to 2010–11
NDME
DME
QAME
0
00
0
0
0
Nu
mb
er o
f Fir
ms
1,40,00,000
1,20,00,000
1,00,00,000
80,00,000
60,00,000
40,00,000
20,00,000
0
2010–11
Category 1–2 stands for firms employing one or two workers, category 3–5 stands for firms employing three, four or five workers and other categories have to be understood similarly. Source: Authors’ computations based on NSSO data.
Figure 3: Histogram of Frequency of Firms for Different Size Classes
20+
1–2
3–5
16–19
2000–012005–06
6–9
10–1510–15
1–2
Figure 4: Histogram of Firm Labour Productivity (in ‘00s) for Different Size Classes, 2000–01 and 2010–11
Ave
rag
e La
bou
r Pro
du
ctiv
ity
350
300
250
200
150
100
50
0
Same as Figure 3.Source: Authors’ computations based on NSSO data.
2000–01 2010–11
3–5
6–910–15
20+
16–19
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 45
Puzzle 3: Female-owned DMEs Doing BetterNSSO data allows us to classify fi rms into proprietary fi rms and partnership fi rms. Proprietary fi rms are those fi rms where an individual is the sole owner of the enterprise and they mostly operate from the household. We divide these fi rms further into two, based on the gender of the owner: proprietary (male) is a proprietary fi rm owned by a male and proprietary (female) is a proprietary fi rm owned by a female. The NSSO defi nes partner-ship as the “relation between persons who have agreed to share the profi ts of a business carried on by all or any one of them acting for all” (NSSO 2002). These partners may be from the same household or from different households. We pool them together into one category called “Partnership.”7 Examining fi rm size and productivity differences by ownership and gen-der of owner, we fi nd that while the size of proprietary fi rms with male owners is larger than the proprietary (female) fi rms among OAMEs and NDMEs, the converse is true among the DMEs. In other words, the average size of workforce employed by the female-owned proprietary DMEs is relatively higher than the size of the workforce employed by the male-owned proprietary DMEs. A similar difference can be observed while examining productivity across these ownership categories too. A comparison across categories reveals that OAMEs and NDMEs are more productive in the proprietary (male) category, while proprietary (female) category DMEs are more productive.
Puzzle 4: Fixed Premises Do Not Lead to Productivity
It is generally understood that informal fi rms with fi xed premises and permanent structures are more productive than fi rms with temporary structures or mobile street vendors (Moreno-Monroy et al 2014). Investment in permanent structures should remove the uncertainty for fi rms associated with temporary structures that may be demolished by state agencies or where fi rms need to move from place to place as mobile street vendors. However, this is not what we observe in the Indian informal manufacturing sector.
To look at the relationship between fi rm size, productivity and location of the fi rm, we classify fi rms into four categories based on the location of the fi rm: (a) fi rms operating from household premises (Within HH); (b) fi rms located outside the household premises and have fi xed premises and permanent
structures (OH-PERM); (c) fi rms located outside the household premises but have only temporary structures (OH-TEMP),8 and (d) fi rms that shift from market to market and street vendors (mobile street vendors). Our fi ndings categorically point to signifi cant differences in fi rm size between fi rms operating from household premises and fi rms located outside the house-hold premises. The average fi rm size is substantially higher for fi rms located outside the household premises and carry out their operation (OH-PERM and OH-TEMP) as compared to fi rms that operate from household premises (within HH) (Table 1). This is evident across all enterprise types and more so for DMEs. For instance, a DME belonging to the OH-PERM category is 1¼ times larger in size than a DME in the Within HH category. However, compared to mobile street vendors, an average fi rm belonging to the Within HH category is bigger in size in all three enterprise types (Table 1).
The evidence on the relationship between location of fi rm and productivity is mixed (Table 1). On the one hand, the results clearly show that fi rms that are larger in size have achieved signifi cant gains in productivity across all enterprise types. OH-PERM fi rms are more productive among all the four categories of fi rms that were identifi ed based on location.9 These are set of fi rms that are operating from outside the house-hold premises and are with fi xed premises and permanent struc-tures. On the contrary, the category of fi rms operating from fi xed premises but with temporary structures (OH-TEMP) is found to be the least productive among the four categories. Does this imply that operating from fi xed premises with a permanent structure is essential for improving growth and productivity? This is not clearly evident from our analysis as mobile-street vendors, the category in which most fi rms are without fi xed premises, which is the second-most productive category of fi rms across all the three enterprise types.
Puzzle 5: Age Not Linked to Size and Productivity
Do informal fi rms in India increase in size and become more productive as they grow older? The available evidence for other countries points to a negative relationship between age and growth (Sleuwaegen and Goedhuys 2002). In the case of India too, a negative association between age and fi rm growth is reported by Deshpande and Sharma (2013). Using the latest round of NSSO data for the period 2010–11, we test for the presence of this relationship among informal fi rms. Using the year of initial operation of fi rms reported in the data set, we arrive at the age of fi rms as the number of years since commencement of its operation. Our fi ndings fail to suggest the existence of any precise relationship between age of the enterprise and fi rm size in the informal sector. Ideally, if age had an infl uence on size, we would observe average age increasing with fi rm size. However, as evident from Figure 5 (p 46), average age of the enterprise does not show any signifi -cant difference across enterprise types. We explore further for any relationship between age and labour productivity, and notice the absence of any such association between age and labour productivity as well (Figure 6, p 46). Hsieh and Klenow (2014) suggest that this may be due to barriers to productivity
Table 1: Firm Size and Labour Productivity, 2010–11Categories By Ownership By Location Proprietary Proprietary Partnership Within HH OH-PERM OH-TEMP Mobile (Male) (Female) Street Vendors
Firm Size Enterprise Type OAME 1.61 1.22 2.52 1.44 1.51 1.60 1.19
NDME 3.04 2.94 3.93 2.96 3.11 3.44 2.47
DME 10.49 10.66 15.35 8.64 11.56 11.29 7.14
Sector Rural 2.11 1.25 4.86 1.54 2.95 4.51 1.26
Urban 2.82 1.35 5.08 1.67 3.49 2.18 1.47
Labour Productivity (in ‘00s) Enterprise Type OAME 369.16 172.60 283.08 225.77 519.69 338.48 402.81
NDME 667.71 440.94 656.64 512.03 721.69 467.81 500.31
DME 641.19 799.43 776.56 500.47 759.29 234.45 670.10Source: Authors’ computations based on NSSO data.
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly46
growth faced by large fi rms (which are the older fi rms) in India—such as “contractual frictions in hiring non-family labour, higher tax enforcement on larger fi rms, fi nancial frictions, diffi culty in buying land or obtaining skilled managers, and costs of shipping to distant markets” (Hsieh and Klenow 2014: 20). Clearly, there is more research needed to under-stand the puzzling lack of relationship between fi rm age and productivity. Perhaps the distortions in the product and factor markets that large informal fi rms face, could explain this lack of relationship.
Puzzle 6: Education of Owners Affects Productivity
Previous studies on informal fi rms in other developing countries fi nd that fi rms with better-educated owners tend to improve in size and productivity as compared to fi rms with less-educated owners (Sonobe et al 2011). Is this also the case in India? We examine this relationship using the 67th round of NSSO data on the unorganised manufacturing sector for 2010–11, which provides information on the education qualifi cation of the owners of the surveyed fi rms. Based on the educational qualifi -cation of the owners, we divide the fi rms into four: (a) fi rms
with owners who are not educated; (b) fi rms whose owners are educated up to primary level; (c) fi rms with owners who are educated up to higher secondary level; and (d) fi rm owners with post-graduation and above.
We fi nd that the average size of the fi rm increases with the education qualifi cation of the owner. Figure 7 shows that fi rms that are owned by those with postgraduate degrees and above are larger in size as compared to other categories. Interestingly, we fi nd that the next category in terms of size is fi rms owned by illiterates. We clearly see evidence in favour of returns to education across OAMEs, NDMEs and DMEs, when we relate educational qualifi cation of the owner with labour productivity (Figure 8). Labour productivity is considerably higher for fi rms run by owners having a post-graduate degree and above. This fi nding is consistent across all enterprise types in the informal sector. This suggests that human capital of the owner matters for fi rm productivity even in the informal sector, where the returns to education are likely to be low. Perhaps more surprisingly, returns to education also matter signifi cantly for household enterprises, which are the least productive of informal fi rms and employ most of the working poor in urban areas. This suggests that schooling plays an important role to alleviate constraints of growth and productivity of all informal fi rms.
Mea
n A
ge
12
10
8
6
4
2
0 OAME NDME DME
Source: Authors’ computations based on NSSO data.
Figure 5: Age by Enterprise Type, 2010–11
Ave
rag
e Fi
rm S
ize
12
10
8
6
4
2
0 Illiterate Primary Higher Secondary Post-Graduation
Source: Authors’ computations based on NSSO data.
Figure 7: Firm Size by Education and Enterprise Type, 2005–06
NDME
QAME
DME
Mea
n of
Lo
g of
Lab
our P
rod
uct
ivit
y
4
3.5
3
2.5
2
1.5
1
0.5
0 Illiterate Primary Higher Secondary Post-Graduation
Source: Authors’ computations based on NSSO data.
Figure 8: Labour Productivity by Education and Enterprise Type, 2005–06
NDME
QAME
DME
We use logarithm of labour productivity levels. Source: Authors’ computations based on NSSO data.
Figure 6: Scatter Plot Labour Productivity by Age, 2010–11
Lab
our P
rod
uct
ivit
y
16
14
12
10
8
6
4
2
00 20 40 60 80 100 120 140
Age of the Enterprise
95% CI Fitted values● lnLP
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 47
Puzzle 7: Social Group of Owner Does Matter
There has been a signifi cant amount of literature in recent times that has tried to relate the social group of the fi rm owner with fi rm growth and productivity. Earlier literature has pointed out that enterprises owned by Scheduled Castes (SCs) and Scheduled Tribes (STs) are under-represented in the population of small and medium enterprises, and that they tend to be smaller in size as compared to enterprises owned by other social groups (Deshpande and Sharma 2013; Iyer et al 2013). SCs and STs are over-represented in occupations which have the highest rates of poverty (such as agricultural labour in rural areas, and casual workers in urban areas), and there is mixed evidence on the degree of occupational mobility that these social groups have witnessed in recent years, especially in the post-reform period. For example, Hnatkovska et al (2012) fi nd signifi cant convergence of occupation and wages of SC and ST groups towards non-SC/ST levels in the period 1983–2005, using quinquennial NSSO employment surveys. Similarly, Kapur et al (2010) fi nd clear mobility of SCs, who moved from being agricultural labourers to being owners of OAMEs, using primary data from Uttar Pradesh. Gang et al (2012) fi nd evidence of occupational convergence of SCs towards non-SC/STs, but not STs in rural areas. On the other hand, Newman and Thorat (2012) fi nd social and economic discrimination signifi cantly restricts the mobility of SCs, and their entry into “non-traditional” occupations.
To investigate fi rm size and productivity amongst fi rms owned by SCs, STs and other social groups in the informal sector, we use the NSSO data of 2010–11, which collected information on the social group of the owner of the enterprise. Using this we classify the fi rms into four categories: (a) owned by those belonging to the general category; (b) owned by Other Back-ward Classes (OBC); (c) owned by SCs; and (d) owned by STs.
Our results with regard to the relationship between social group of the owner and fi rm size are in line with our expecta-tions. The average size of the fi rm is larger for fi rms that are owned by those who belong to the general and ST categories followed by fi rms owned by OBCs and SCs in the DME category, with very little difference in OAME and NDME sizes across social groups (Figure 9). With respect to labour productivity, fi rms owned by the general and OBC social groups are more productive than fi rms owned by SC and ST across all three enterprise types. The fact that ST-owned fi rms are not as productive as those owned by the general social group, even though both sets of fi rms are on average the same size suggests that there are other constraints to productivity for ST-owned fi rms, which are not linked to size (Figure 10). Overall, the evidence we present here shows very clear differences in fi rm size and productivity, with the SCs (and STs, in the case of productivity) being the most disadvantaged, followed by the OBCs. While fi rms owned by the general group (forward castes, along with non-Hindus) are the largest in size and the most productive. This suggests that there are clear social barriers to fi rm growth in informal manufacturing in India, which restricts the participation of socially disadvantaged groups in the growth process of the economy.
Stylised Facts: Wages, Size and Productivity
In this section we put together some stylised facts about wages in the informal manufacturing sector, and examine whether wages paid to workers differ by type of fi rm, fi rm ownership, and social group of the owner. Our measure of wages here includes wages and sa l aries payable in cash or in kind, and e xcludes the value of social contributions paid by the employer.10 We use real wages, which are obtained by defl ating nominal wages with consumer price index (CPI) for industrial wo rkers at 1993–94 prices. We fi nd clear evidence that DMEs pay higher wages, followed by NDMEs, then OA M Es. In fact, DMEs pay more than 14 times the wages paid in OAMEs and about two times more than the wages paid in NDMEs. This in-dicates how important it is for fi rms to move from OAMEs to DMEs to increase the living con-ditions of the workers employed in these en-terprises (Table 2). We
Ave
rag
e Fi
rm S
ize
14
12
10
8
6
4
2
0 ST SC OBC General
Source: Authors’ computations based on NSSO data.
Figure 9: Firm Size by Enterprise Type and Caste, 2010–11
NDME
QAME
DME
Mea
n of
Lab
our P
rod
uct
ivit
y
800
700
600
500
400
300
200
100
0 ST SC OBC General
Source: Authors’ computations based on NSSO data.
Figure 10: Labour Productivity by Enterprise Type and Caste, 2010–11
QAME
DME
NDME
Table 2: Wages by Ownership and Caste, 2010–11Wages OAME NDME DME
Caste
ST 22.46 113.89 340.27
SC 26.87 180.06 261.43
OBC 17.01 227.71 341.83
General 35.58 220.41 327.63
All 22.72 218.92 335.58
Proprietary Proprietary Partnership (Male) (Female)
Ownership
Wages 230.21 81.65 251.65
Wages are by worker. The caveat is that OAMEs mostly use family labour, so their estimates of wages include only wages and benefits for working owners. Source: Authors’ computations based on NSSO data.
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly48
also fi nd that wages paid by partnership fi rms are much higher than those paid by fi rms owned solely by female and male pro-prietors (Table 2).
In line with our expectations, male proprietorship fi rms pay higher wages than female proprietorship fi rms. Looking at wages paid by fi rm type and social group of owner, we fi nd that among DMEs, fi rms owned by the OBCs pay the highest wages, followed by fi rms owned by STs, fi rms owned by general social group, and fi rms owned by SCs (in that order). This is a somewhat surprising fi nding, as we have already observed that DMEs owned by the general group are the most productive. The correlation between wages paid and social position of the owner is stronger for NDMEs, with fi rms owned by OBCs and the general social group paying higher wages than those owned by STs and SCs (Table 2). However, in the case of OAMEs, where much of the wages are own payments to fi rm owners, there is weak correlation between wages and the relative position of the social group of the fi rm owner in the caste hierarchy.
Finally, we fi nd evidence of clear positive relationships between wages paid to workers and fi rm productivity, and wages paid to workers and fi rm size (Figures 11 and 12). In
fact, the relationship between wages and fi rm productivity is particularly strong, indicating the importance of improving fi rm productivity in the Indian informal sector as a means to improve the living standards of the workers employed.
Analysing Correlates of Wages and Firm Productivity
In this section, we extend our analysis of Indian informal fi rms by conducting a multivariate analysis of the correlates of wages and productivity in these fi rms.11 First, we look at the correlates of wages. Our dependent variable is fi rm-level wages per worker, and we include fi rm size, the social group of the owner, the gender of the owner, and the location of the fi rm as the explanatory variables. We anticipate a positive relationship between the size of the fi rm and wages paid to the worker. We include two proxies to represent fi rm size. In the fi rst model (Model 1), we include two enterprise type dummy variables, NDME and DME, with the residual category being OAME. In this case, we expect that the coeffi cient values of DME and NDME to be positive and signifi cant and that of DME to be higher than NDME. In Model 2, we replace the enterprise type dummies with the log of number of workers. In this case too, we anticipate the coeffi cient value of fi rm size to be positive and signifi cant. We introduce three dummy variables to capture the effect of the social group of the owner on wages per worker. SC, ST and OBC are the three dummy variables representing the social group of the owner with the general social group being the residual category. As observed in our earlier descriptive analysis, we expect that the workers in fi rms with owners belonging to the general category will have higher wages than in fi rms with owners from OBC, SC and ST categories, and therefore the coeffi cients of OBC, SC and ST are expected to be negative and signifi cant. We also introduce FEMALE to understand the effect of fi rm owner’s gender on wages per worker. Based on our earlier discussion, we anticipate the coeffi cient of FEMALE to be negative and signifi cant. To examine the role of location of the fi rm on wages per worker, we include three dummy variables, namely, OH-PERM, OH-TEMP and STREETVEND with Within HH being the residual category. Our conjecture is that workers in fi rms with fi xed premises and permanent structure will have higher wages as compared to workers in other categories.
We also include some fi rm-specifi c control variables that are likely to infl uence the effect of our main variables on wages per worker. These control variables are SECTOR, LINKAGE, FEMALE, REGIS, ASSISTANCE, AGE, MIDGRADEDU and URBAN. The NSSO data reports whether the fi rms are located in rural or urban areas. SECTOR takes the value 1 if the fi rm is located in urban areas and 0 if they are located in rural areas. The inclu-sion of SECTOR is expected to capture differences among fi rms in terms of access to better infrastructure, larger markets for skilled labour, raw materials, and output, and the effect of these on wages per worker.
The NSSO in its surveys asks the fi rms whether they work solely for a contractor (that is, it sells all its output to the contractor, who usually in this tied arrangement, supplies it with inputs). We name this variable LINKAGE and code it 1 if they
Log
of W
ages
per
Wor
ker
14
12
10
8
6
4
2
0
Source: Authors’ computations based on NSSO data.
Figure 12: Scatter Plot: Wages per Worker and Firm Size, 2010–11
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5Log of Employment
Log
of W
ages
per
Wor
ker
14
12
10
8
6
4
2
0
Source: Authors’ computations based on NSSO data.
Figure 11: Relationship between Wages per Worker and Labour Productivity, 2010–11
0 2 4 6 8 10 12 14 16Log of Labour Productivity
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Economic & Political Weekly EPW february 13, 2016 vol lI no 7 49
work for a contractor and 0 if they do not. Our conjecture is that the fi rms that work for contractors are more likely to pay higher wages as they may be needing workers with specialised skills. We maintain that being registered under an act/authority could help the fi rm owner–manager to access and secure a range of fi nancial resources, which could refl ect in higher wages.
The variable REGIS controls for this possibility and takes the value 1 if they report that they have registered under any act, and 0 if they did not register under any act. We hypothesise a positive relationship between REGIS and wages per worker. The variable ASSISTANCE takes the value 1 if the fi rm received any assistance from the government towards training and marketing and 0 if they state that they did not receive any such assistance. It is expected that any such type of assistance will be positively associated with wages per worker.
We also include some district-level controls such as the level of urbanisation in the district as measured by the share of urban population in total population (URBAN) and the propor-tion of individuals educated at secondary level and above (MIDGRADEDU). We expect that higher level of urbanisation in a district, and higher level of human capital as measured by high MIDGRADEDU, would have a positive effect on wages per worker. We use industry-specifi c effects to capture the possi-bilities that wages per worker in larger size enterprises would likely be higher in industries with economies of scale such as metals, chemicals and automobiles.
The results are reported in Table 3. Strikingly, we fi nd that across the two models wages per worker increases with fi rm size. We fi nd this to be valid irrespective of whether we use
enterprise dummies (NDME and DME) or log of number of workers as proxies for fi rm size. As already observed, our results clearly show that the social group of the fi rm owner is an important determinant of wages per worker for fi rms in the informal sector. The coeffi cients of SC and ST variables are negative and signifi cant suggesting that workers in fi rms with owners from SC and ST social groups are paid wages lower than in fi rms with owners from OBC and general social groups. Our computations suggest that workers in fi rms headed by those from SC and ST social groups are paid 16% and 29% lower, respectively, than the workers in fi rms with owners from general category (based on Model 1), while the coeffi cient of OBC-owned fi rms is positive and signifi cant suggesting that wages per worker are higher in fi rms with owners from OBCs as compared to fi rms headed by owners from the general social group.
There is also evidence that location of the fi rm is a signifi -cant factor infl uencing wages paid to workers in informal fi rms. In line with our expectations, workers in fi rms that are operating from fi xed premises with a permanent structure will have higher wages as compared to fi rms that are operating from within the household with a temporary structure. We fi nd that wage rate of workers in OH-PERM fi rms are 21% higher than that in Within HH fi rms. The negative and signifi cant coeffi cient of OH-TEMP indicates that workers in OH-TEMP fi rms were paid wages lower than workers in fi rms operating from within the household. We have also examined whether the gender of the owner plays a crucial role in infl uencing wages per worker in the sector. Our estimations clearly suggest that there is a difference in wage rates between workers in fi rms with male owners and in fi rms with female owners. The variable FEMALE that stands for the gender of the owner has a negative and signifi cant coeffi cient indicating that wage rates are lower for workers in female-headed fi rms as compared to workers in male-headed fi rms. A worker in a female-headed fi rm is paid wages 23% less than those in a male-headed fi rm. Our control variables have the expected signs. We fi nd that wages are higher in urban fi rms, in fi rms that are registered, and in fi rms that are located in districts that are urbanised, and have a higher level of human capital.
We also perform a similar regression analysis of the correlates of fi rm productivity to see whether the correlates of wages differ signifi cantly from the correlates of fi rm productivity. The results are presented in Table 4 (p 50). Our results unam-biguously confi rm that the sign, signifi cance and direction of correlates of fi rm productivity are the same as observed for wages. We fi nd that large fi rms (NDMEs and DMEs) are more productive than smaller fi rms (OAMEs); labour productivity is relatively higher for fi rms headed by those belonging to the general social group (but wages in OBC-headed fi rms are actu-ally higher than wages in fi rms headed by members of the gen-eral social group); workers in fi rms that are operating from fi xed premises and having a permanent structure are more productive than workers in fi rms that are operating from within the household and with a temporary structure (the former is 21% more productive than the latter); and female-headed fi rms are 24% less productive than male-headed fi rms.12 Interestingly,
Table 3: Correlates of Wages, 2010–11Dependant Variable: Wages per WorkerVariables Model 1 Model 2
NDME 0.3832***(0.1485)
DME 0.7114*** (0.1490)
SIZE 0.3351*** (0.0176)
SC -0.1603*** (0.0518) -0.1424*** (0.0577)
ST -0.2947*** (0.0992) -0.2778*** (0.0921)
OBC 0.0628*** (0 .0193) 0.0773*** (0.0184)
OH-PERM 0.2063*** (0.0248) 0.1962*** (0.0243)
OH-TEMP -0.6873*** (0.0708) -0.7106*** (0.0704)
STREETVEND 0.0915 (0.0776) 0.1358* (0.0739)
FEMALE -0.2281*** (0.0483) -0.2284*** (0.0466)
Firm-specific control variables SECTOR 0.2554*** (0.0198) 0.2591*** (0.0209)
LINKAGE -0.0815*** (0.0288) -0.1041*** (0.0293)
REGIS 0.2922*** (0.0213) 0.2719*** (0.0205)
ASSISTANCE -0.0009 (0.0375) -0.0131 (0.0376)
AGE -0.0091 (0.0098) -0.0076 (0.0097)
District-specific control variables MIDGRADEDU 1.1007*** (0.0818) 1.0863*** (0.0800)
URBAN 0.1168*** (0.0203) 0.1005*** (0.0197)
Constant 8.0490*** (0.3375) 8.1050*** (0.2799)
Industry Dummy Y Y
N 29661 29661
F 64.24 68.65
R-squared 0.3347 0.3513Figures in parentheses are robust standard errors, ***, ** and * indicate significance at minimum 1% level, 5% level and 10% level respectively, All estimations have been carried out by using sampling weights supplied by the NSSO. Source: Authors’ computations based on NSSO data.
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february 13, 2016 vol lI no 7 EPW Economic & Political Weekly50
we fi nd that fi rms which have entered into subcon-tracting agreements (LINK-
AGE=1) are less productive than fi rms which have not.
We also fi nd that pro-ductivity is higher for urban fi rms, fi rms that are regis-tered, and fi rms that are located in districts that are urbanised and with higher levels of human capital. Our analysis suggests that the most effective way to increase the wages of in-formal workers is to in-crease the productivity of the enterprises they work in, and that the larger these enterprises are, the more productive they are. Government schemes that provide assistance to in-formal enterprises to invest in permanent structures are also important in in-creasing their productivity, and hence, the wages of the workers they employ. However, our analysis also shows that there are social and economic barriers to informal enterprises in increasing th e i r productivity. Control-ling for other factors, we fi nd enterprises owned by members of disadvantaged social groups such as the SC and ST, and female-owned enterprises are less productive than those headed by the OBC and general social groups, and by males. Given that the highest incidence of poverty is among the SC and the ST, the existence of barriers to the growth of fi rms that are owned by these social groups is a matter of major policy concern. Further-more, gender-related differences in the productivity of fi rms suggest that female entrepreneurs may be disadvantaged in their access to output and input markets relative to male entre-preneurs. This again suggests that public policy interventions may be needed to address the disadvantages that female entre-preneurs face in the informal manufacturing sector in India.
Conclusions
In this paper, an attempt is made to locate the factors that constrain fi rm growth, productivity and wages in the informal manufacturing sector in India. The detailed investigation of
informal manufacturing fi rms is conducted using rich unit record data on these fi rms from the NSSO for 2000–01, 2005–06 and 2010–11. In the course of the analysis, we came across a few empirical puzzles about fi rms in the informal manufacturing sector that needs further analysis. In the end, we also carried out a simple multivariate analysis of the correlates of wages and productivity to understand better which of the character-istics of fi rms matter in explaining variations in wages paid to workers and fi rm productivity in the Indian informal manu-facturing sector.
Digging deeper into the Indian informal manufacturing sector through the analysis of detailed fi rm-level data, we fi nd that there has been a downward shift in the size of the average informal fi rm in the Indian manufacturing sector over time. We fi nd average fi rm size declining in both OAMEs and NDMEs
while remained stagnant among the DMEs. Moreover, we fi nd that rural DMEs are larger in size and have experienced a faster increase in size compared to urban DMEs over the study period. In terms of labour productivity, we notice an inverted-U
relationship between fi rm size and fi rm performance: produc-tivity increases up to a certain large size before stagnating or declining. Productivity is highest among fi rms that operate from fi xed premises, and have permanent structures, but the evidence is not decisive on the role of fi xed premises and permanent structures on driving up productivity. Surprisingly, our analysis also suggests that female-owned proprietary DMEs are larger in size and more productive than their male-owned counterparts.
Our attempt at understanding the correlates of wages and labour productivity reveals that fi rm size, gender and social group of the fi rm owner and location of the fi rm are important determinants of wages and labour productivity in the informal manufacturing sector. Our analysis clearly suggests that the most effective way to increase the wages of informal workers is to increase the productivity of the enterprises they work in, and that the larger these enterprises are, the more productive they are. However, our analysis also shows that there are social and economic barriers to informal enterprises in increasing their productivity. Controlling for other factors, we fi nd enterprises owned by members of disadvantaged social groups such as the SC and ST, and female-owned enter-prises are less productive than those headed by the OBC and general social groups, and by males. This suggests that targeted government programmes towards these groups may help reduce the disparities in wages of workers employed in enterprises headed by these groups and the wages of workers in enterprises owned by males from the OBC and general social groups.
Table 4: Correlates of Labour Productivity, 2010–11Dependent variable: Log of Labour ProductivityVariables Model 1
NDME 0.5373*** (0.1191)
DME 0.4290*** (0.1206)
SC -0.0748** (0.0331)
ST -0.1782** (0.0857)
OBC 0.0651*** (0.0187)
OH-PERM 0.2098*** (0.0225)
OH-TEMP -0.6159*** (0.0665)
STREETVEND -0.0361 (0.0578)
FEMALE -0.2362*** (0.0486)
Firm-specific control variables SECTOR 0.2551*** (0.0186)
LINKAGE -0.2395*** (0.0299)
REGIS 0.3002*** (0.0188)
ASSISTANCE -0.0121 (0.0420)
AGE -0.0110 (0.0091)
District-specific control variables MIDGRADEDU 0.6322*** (0.0776)
URBAN 0.1299*** (0.0168)
Constant 9.2467*** (0.3776)
Industry Dummy Y
N 29661
F 59.49
R-squared 0.3214Figures in parentheses are robust standard errors; ***, ** and * indicate significance at minimum 1% level, 5% level and 10% level respectively. All estimations have been carried out by using sampling weights supplied by the NSSO. Source: Authors’ computations based on NSSO data.
notes
1 We provide a comprehensive analysis of informal manufacturing fi rms in India in our forthcoming book (Raj and Sen 2016).
2 Firms in the Indian informal sector are broadly classifi ed into three categories based on the size of the enterprise and the type of labour used in the production process. They are (a) own- account manufacturing enterprises (OAMEs)
employing only family labour; (b) non-directory manufacturing establishments (NDMEs) that employ at least one hired labour on a regular basis, but the total number of workers (including family labour) do not exceed fi ve; and (c) direc-tory manufacturing establishments (D M Es) employing six–nine workers of which at least one would be a hired worker.
3 Firm size is represented by the number of workers.
4 Throughout this paper, we apply frequency weights provided by the NSSO to compute descriptive statistics, which is often advocated when estimating population averages from the sample data (Solon et al 2013).
5 One serious limitation of the measure of labour input used in the study is that it is based on headcount, and thus no distinction is made between a full-time worker and a part-time
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worker (or between a hired worker and a helper). As it is diffi cult to derive an estimate of labour input which takes care of this difference in quality, we rely on the measure based on head-count as the measure of labour input in this study.
6 As is the general practice in the literature, labour productivity is measured as the ratio of real gross value added to number of workers. We defl ated nominal gross value added by wholesale price index (WPI) for manufactured products to arrive at the real gross value added. Real gross value added fi gures are computed at 1993–94 prices.
7 It needs to be stated that units of proprietary and partnership nature covered under ASI will not be part of these categories.
8 The NSSO defi nes permanent structure as any structure made out of bricks, mud, bamboos etc, and it cannot be removed as a whole without dismantling. Temporary structures, on the other hand, can be removed from its present location with some effort. Some examples are stalls, kiosks, etc (NSSO 2002).
9 Our computations suggest that average produc-tivity of OH-PERM category in the OAME, NDME and DME enterprise types is respectively 2.3 times, 1.5 times and 3.3 times higher than the least productive categories.
10 The caveat here is that OAMEs mostly use family labour, so these include only wages and benefi ts for working owners.
11 We use multipliers to re-weight fi rm-level observations in all of our regression estimations. These estimations are performed using the unit level d ata for 2010–11.
12 It needs to be stated that the fi nding that fi rms with female owners are less productive than male-headed fi rms is clearly evident for all fi rms and for all enterprise type categories except for proprietary DMEs, as observed earlier in the paper. In the case of proprietary DMEs, we fi nd that female-headed fi rms are more productive than male-owned fi rms.
References
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Gang, Ira, Sen, Kunal and Yun Myeong-su (2012): “Is Caste Destiny? Occupational Diversifi cation among Dalits in Rural India,” BWPI Working Paper 162, Manchester: Brooks World Poverty Institute.
Gokarn, Subir, Anindya Sen and Rajendra Vaidya (2004): The Structure of Indian Industry, Delhi: Oxford University Press.
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The Problem of CasteEdited by
SATISH DESHPANDE
Caste is one of the oldest concerns of the social sciences in India that continues to be relevant even today.
The general perception about caste is that it was an outdated concept until it was revived by colonial policies and promoted by vested interests and electoral politics after independence. This hegemonic perception changed irrevocably in the 1990s after the controversial reservations for the Other Backward Classes recommended by the Mandal Commission, revealing it to be a belief of only a privileged upper caste minority – for the vast majority of Indians caste continued to be a crucial determinant of life opportunities.
This volume collects significant writings spanning seven decades, three generations and several disciplines, and discusses established perspectives in relation to emergent concerns, disciplinary responses ranging from sociology to law, the relationship between caste and class, the interplay between caste and politics, old and new challenges in law and policy, emergent research areas and post-Mandal innovations in caste studies.
Authors: Satish Deshpande • Irawati Karve • M N Srinivas • Dipankar Gupta • André Béteille • Rajni Kothari • Kumkum Roy • Sukhadeo Thorat • Katherine S Newman • Marc Galanter • Sundar Sarukkai • Gopal Guru • D L Sheth • Anand Chakravarti • Carol Upadhya • Ashwini Deshpande • Meena Gopal • Baldev Raj Nayar • Gail Omvedt • Mohan Ram • I P Desai • K Balagopal • Sudha Pai • Anand Teltumbde • Surinder S Jodhka • Ghanshyam Shah • Susie Tharu • M Madhava Prasad • Rekha Pappu • K Satyanarayana • Padmanabh Samarendra • Mary E John • Uma Chakravarti • Prem Chowdhry • V Geetha • Sharmila Rege • S Anandhi • J Jeyaranjan • Rajan Krishnan • Rekha Raj • Kancha Ilaiah • Aditya Nigam • M S S Pandian
Orient Blackswan Pvt Ltdwww.orientblackswan.com
Mumbai • Chennai • New Delhi • Kolkata • Bangalore • Bhubaneshwar • Ernakulam • Guwahati • Jaipur • Lucknow • Patna • Chandigarh • Hyderabad Contact: [email protected]
Pp xi + 425 Rs 595ISBN 978-81-250-5501-32014
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly52
Of Rasoi ka Kaam/Bathroom ka KaamPerspectives of Women Domestic Workers
Sonal Sharma
This paper is a modifi ed version of a section of the thesis submitted to the School of Development Studies, Dr B R Ambedkar University, Delhi by the author, in partial fulfi lment of Master’s degree in Development Studies. A previous version of this paper was presented at the X International Conference on Labour History, 22–24 March 2014 at V V Giri National Labour Institute, Noida/New Delhi. This paper has benefi ted immensely from the comments of my dissertation supervisor, Sumangala Damodaran. I am thankful to Judith Heyer, Ben Mendlkern, Saumyajit Bhattacharya, Anusha Hariharan and Eesha Kunduri for their valuable feedback on various drafts of this paper.
Sonal Sharma ([email protected]) works with the Centre for Policy Research, New Delhi.
Practices of purity and pollution have been a critical area
of inquiry in paid domestic work relations in India. This
paper revisits the idea of purity and pollution in the
space of the home in paid domestic work, but with the
intent to turn the gaze around. It shifts the focus by
looking at workers as the subjects and examining their
responses. It argues that the existing frameworks for
looking at the space of home and the practices of purity
and pollution are limiting and have to be revisited to
develop a dynamic understanding of the everyday
reality of domestic work and caste hierarchies at work.
Existing scholarship on domestic work in India has done much to highlight practices of purity and pollution as an aspect governing relationship between employer and
worker. Scholars, however, have in general treated the employer as the origin and “doer” of the practice, and worker as passive objects, always at the receiving end of these practices. This linear, popular narrative does not do justice to the complexities of the practices of purity and pollution rooted in caste relations in India. It is a narrative that assumes congruence between caste and class, imagining a world in which the employer is always upper caste and the worker lower caste.
To fully understand how ideas of purity and pollution shape domestic work in India, we must examine workers’ perspectives on these practices. Such perspectives unveil an entirely different aspect of the “embeddedness” of these work relations in caste and class hierarchies and unsettle the dominant narrative of lower-class and lower-caste workers employed by middle-class and upper-caste employers. The contours of caste in domestic work relations are complex and intersect with other forms of social distinction, like religion. These multiple and intersecting identities create often confusing and stratifi ed differences even among workers. Looking at these intersecting social structures, we realise that subordinate class position is just one part of domestic workers’ social location in general, and in relationship to their middle class employers, in particular.
Caste, Gender and Middle Class Domesticity
Caste fi nds mention in two distinct ways in contemporary dis-course on paid domestic work in India: fi rst, domestic workers’ and employers’ caste, as an identity, becomes important to un-derstand the organisation of work. For example, studies high-light the assignment of tasks based on workers’ caste identities and discriminatory practices by employers based on caste iden-tities (Froystad 2003; Matilla 2011 among others). Studies also look at practices refl ecting the structure of caste in everyday relations (Ray and Qayum 2010). The latter engages with more subtle and confusing ways in which caste operates in structur-ing these relations, as very often there may not be any direct reference to caste at all. Sara Dickey (2000a) argues that it is not caste, but rather class that marks the distinctions employers fi nd relevant; she goes on to say that these markers are signifi ed in material endowment and the employers’ notions of “dirt.” According to her, employers do not refer to caste so much, and all they care about is the workers’ “hygiene,” which refl ects their class rather than caste biases. Ray and Qayum differ with
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 53
this kind of approach as they argue that practices of caste are simply camoufl aged by the lexicon of hygiene. Froystad (2003), critiquing Dickey, argues that the idea of “dirt” is itself constructed within a discourse of caste, which may go un-noticed in mundane practices if the discursive details are not examined in relation to these practices.
The relation of “dirt” with household space in general has been identifi ed as really dynamic in terms of how it shapes the identities of the social actors. The everyday practices of clean-ing the house, for instance, and removing dirt from it, is a way through which women (re)produce an ideal feminine identity (Chakrabarty 1992). Removal of household dirt, according to Chakrabarty, plays a critical role in the everyday demarcation of the symbolic boundaries of home. However, the idea of “dirt” itself cannot be taken for granted. According to Mary Douglas (1966), we cannot look at “dirt” or “pollution” in isola-tion as it is “order and schemes,” established and re-estab-lished through socialisation, that construct the “dirt”—the dirty is not absolute, it is relative. Douglas defi nes dirt as “a matter out of place” (p 37) and through a few examples illustrates how certain objects create situations of “un-cleanliness,” “dirt” or “pollution” when they are in places where they should not be. Her approach to “pollution” and “dirt” is very relational, that is, she talks of the relation between sexes, castes and material objects in a space and how a certain relationality produces the dynamics of “purity” and “pollution” between them. In short, she reveals that “dirt” is socially constructed.
The symbolic practices, of segregating “dirty” from the clean, on the basis of “hygiene” or “pollution,” are key to the social construction of space (Chakrabarty 1992). In the context of home and in general, the symbolic practices have been in-strumental in demonstrating that public/private or inside/out-side are not mutually exclusive but rather a continuum: cer-tain symbolic practices try to create boundaries that unsettle these binaries and expose the complex spatialities of everyday life (Warren 2010; Abraham 2010; Ranade 2007). Practices of segregation by middle class employers in their household space in the name of privacy, hygiene, pollution and intimacy, shed light on some of the ways in which boundaries of “home” and “outside” are (re)drawn. These are responses to the inti-mate interactions of otherwise two distant social classes who tend to inhabit different social and physical spaces. Pierre Bourdieu (1989) draws our attention to the social logic of spa-tial segregation and underscores the interactions of social and physical spaces as follows:
It is true that one can observe almost everywhere a tendency toward spatial segregation, people who are close together in social space tending to fi nd themselves, by choice or by necessity, close to one another in geographic space, nevertheless. People who are very distant from each other in social space can encounter one another and interact, if only briefl y and intermittently, in physical space (p 16).
The home has remained a physical space in which very often people from the same “social space” are welcomed. While domestic workers interact with employers in their intimate physical space, the interaction and the close presence is in con-fl ict with their respective positions in the social space. Domestic
workers’ presence in the space of middle-class households is not just about “removing” dirt: from employers’ perspective, domestic workers themselves can represent “dirt, disease and danger” (Dickey 2000a). It is in this context that the practices of untouchability—ranging from a separate tumbler/glass to complete denial of access to employers’ “private” toilets—have to be seen, as they bring out the ways in which the rhetoric of intimacy and privacy mark symbolic boundaries. According to Pei Chia-Lan (2003), it is through these mundane acts of domesticity that boundaries of distinction are drawn and hier-archies re-established in domestic work relations.
In the light of these claims, it becomes essential to ask what workers think about caste practices in employers’ homes. How do they perceive and respond to these practices? Existing ethno-graphic enquiries that examine how hierarchies of caste and class result in the exclusionary treatment of domestic workers1 tend to overemphasis employers’ voices in this regard, high-lighting the power employers have over workers in their house-hold space in particular. This is not to say that workers’ perspec-tives are missing from these accounts altogether, as Ray (2000) and Dickey (2000b) analyse domestic workers’ discourse in which workers resist and manoeuvre their subordinate position in relation to their employers, at least in the discursive domain.
This paper turns the gaze around and explores domestic workers’ notions of caste and untouchability in employers’ homes. By “caste” I mean not just the identity of varna or jati, but also the practices of purity/pollution which refl ect the structure of caste. The idea of ceremonial pollution is not the essence of the caste system, as ceremonial pollution is found in many other religions and contexts (Ambedkar and Rege 2013). A discussion on the practices and identity based on caste ena-bles us to break down the idea of “dirt” and the consequential material and symbolic boundaries that emerge from the do-mestic workers’ points of view. In this paper, workers’ narra-tives that refl ect caste-based practices of purity/pollution are thematically arranged in two categories: the fi rst section ex-plores the practices of caste and enquires about the increasing specialisation/segregation of tasks under the dominant ar-rangement of part-time work, and2 the second section exam-ines workers’ perceptions about their employers and the household space that they work in. The fi rst section demon-strates that domestic workers practise untouchability against each other, while the second section shows that it is not just employers who identify workers based on their caste and func-tion through popularly held notions of purity/pollution: often, workers themselves practise untouchability towards employers. In the last section, I have problematised these practices and unveil a metanarrative that can help us understand and con-textualise workers’ practices without downplaying the power that prevails in domestic work relations in India today.
Methodology
This paper is based on ethnographic fi eldwork in Delhi consist-ing of several semi-structured interviews with women domestic workers, as well as three focus group discussions. This study, by looking at part-time female domestic workers’ ways of negotiating
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their experience in their workspace, explores how the social hierarchies of caste, class and gender are perceived and ma-noeuvred by individual workers in the home space. This essentially involved understanding the feelings and perceptions that workers hold of the employers’ home.
Heterogeneity among the workers, which is central to the research topic, was a crucial aspect in the sampling as well. Identities like caste, religion, linguistic background and work-ers’ association with any group, placement agency or collective are some crucial factors that can shape domestic workers’ experience in their workspace (Vasanthi 2011). The sample is diverse in terms of age, caste, state of origin (in case of migrant workers), religion and marital status as well as the tasks that these workers perform. It has workers from Scheduled Caste (SC), Scheduled Tribe (ST) and Other Backward Classes (OBC) categories. The sample also has some Muslim, Christian and Buddhist workers, though Hindu workers were in majority, and a mix of married, widowed and unmarried workers. The majority of the respondents moved to Delhi after marriage and started working as domestic workers under various circum-stances like death of principal earning member of the family, fi nancial crisis in family, and desire to educate their kids and thus be a “helping hand” to their husband. The sample has workers with states of origin Uttar Pradesh, Bihar, Jharkhand, West Bengal, Assam, Maharashtra, Odisha and Tamil Nadu. The study focuses on the experiences of part-time and live-out workers. Workers’ monthly wages varied between Rs 1,500 and Rs 7,000. In addition to caste-based hierarchy of tasks, which refl ects in the most defi ling tasks also being the most ill-paid ones, wage differentials were also the consequence of the number of households an individual worker worked for—some work-ers were working for more households than others. The work-ers in the study performed the tasks of cooking, mopping and sweeping the fl oor, dusting, doing dishes and cleaning toilets.
Caste and Domestic Work Relations in Delhi
The domestic workers’ narratives reveal the structures in which workers themselves, as social subjects, are embedded (Dickey 2000b). So, the narratives do not just narrate social structures but also refl ect structures interwoven within them. In Delhi, when workers use the term ganda (dirty) in different contexts, the usage has references to an ideology of caste, directly or indirectly. The term is used to refer to objects, spaces, food, living practices, particular types of gendered behaviour by women, and so on. The usage is intended to indicate both “unhygienic” and ritually impure states of these objects and behaviours. More importantly, it is devised to hint at a state of disorder, while drawing on a scheme of “order.” For instance, very often the presence of “untouchable” caste groups performing tasks like cooking and entering the kitchen, which have been forbidden to them, creates a context in which the term ganda is used. The term is used to adjectivise employers from certain sociocultural groups and their household space is stereotyped to be a refl ection of that.
The varied expressions of the usage of the term ganda refl ect the workers’ embodiment of the caste ideologies. The
narratives show that the source of the embodiment of caste is also employers’ notions and practices of purity and pollution, which workers make sense of. While caste-based anxieties might originate from the employer’s notions of purity/pollution, and are enhanced by their privilege of class, the narratives show that domestic workers also willingly participate in maintain-ing and reinforcing these practices. The workers describe both other workers and certain employers as “gande” but with different lexicons and explanations for labelling them so. For instance, some domestic workers deemed to be sexually immoral were labelled as “gandi ladkiyan.”
One of the manifestations of the prejudice of caste in domestic work relations is discrimination at the time of recruitment. One set of workers suggest that caste does not matter anymore for them and even for the employers. According to some upper caste workers, these days, irrespective of caste identity, people work as domestic workers, as increasingly employers do not care about caste. To underscore the process of disappearing social distinctions, one worker says, “Caste is not important to employers anymore.” To exemplify the disappearing caste-based distinctions in hiring workers, the workers usually say that these days jamadars3 are also working inside intimate and sacred portions of home, like the kitchen, from which they had been traditionally excluded.
When workers talk about employers’ preference for workers based on their caste and religious identities, jamadar and Mus-lims are the two social groups they describe as the most unde-sirable by the employers. According to workers, these days, only elderly women in the house practise untouchability while “the new generation” does not pay much attention to workers’ caste. However, practices of untouchability, in the form of sep-arate utensils for domestic workers, come out in many narra-tives and workers share the sense of humiliation they feel in such an arrangement. Heena4 (21, SC), a Dalit worker, ex-presses her inability to grasp the logic of untouchability as, “It feels strange…What is it that we have within our bodies [which makes untouchable]?” (“Ajeeb sa lagta hai (Smiles in embarrassment)… aisa kya hai humare andar?”). Dalit and Muslim workers’ narratives of untouchability in employers’ homes are most stark, but all workers seem to have experienced untouchability to some extent. Some workers share that often employers justify untouchability/segregation by referring to workers’ caste and religion; however very often employers carry out practices of segregation, signifying untouchability, irrespective of workers’ caste and religious identity. Sometimes, the cases in which workers are not asked their caste at the time of recruitment, it is apparent that there are other ways through which caste identity is signalled to the employer. These cases include situations in which workers start working through a family member, and the caste of the referee is known to the employers and thus it does not get verifi ed again. As one upper caste worker shares that in her fi rst place of work she was not asked her caste since it was already known to the prospective employer due to their native village link—jinke yahan maine pehle kaam kiya wo mere Bihar ke hain na. Unhone mujhe pehchan liya, maine unhe pehchan liya. Isliye nahi poochhi
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jaati. (The fi rst household I had worked for were Biharis. They knew me, and so they did not ask my caste.)
Caste alone cannot explain the structures of power that shape everyday politics in domestic work. Workers’ practices reveal that while caste plays a crucial role in structuring the rela-tions, it is not the only identity at work. The narratives highlight the importance of religion and region in producing the in-equalities that characterise the interactions not only between employers and workers but also among workers. Some of these contours are explored in detail in the following sections.
Unsettling the Homogeneity
Various micro-level studies show that non-Dalit workers do not like to clean toilets and that the workers who clean toilets are always from the lowest castes (Ray and Qayum 2010; Froystad 2003). Historically, non-Dalit workers have resisted as-signment of tasks that are considered lower in the caste hierar-chy and hence polluting. According to Srinivas (1995), in the colonial era, due to such practices of resistance “the British were forced to learn from the confusing array of castes and religions whom they could hire for what job” (p 271).
In my interactions with workers, most non-Dalit workers share that they refuse to clean bathrooms saying that it should be done by jamadars only. However, some of them also share that they have no option but to perform the “polluting” task reluctantly. Rosie, a migrant from Jharkhand, shares that she feels she should not be made to clean the toilet and some employers in the locality, she works in, call the jamadar to do it. Seema shares her experience about when she was asked to clean the bathroom, she was reluctant and suggested her employer to hire a jamadar for the tasks. Employers segregate tasks for their notions of “purity” and “pollution,” which has often been seen as reproducing caste relations (Froystad 2003). Workers’ responses suggest how caste-based segrega-tion of tasks by employers can often become part of workers’ subjectivity and get institutionalised in work relations. Rameshwari (42, OBC) very categorically explains to me that people from her caste do only rasoi ka kaam (kitchen-related work) and do not do bathroom ka kaam (any task involving bathroom). These responses clearly indicate that sometimes workers do not only know what they should or should not do, but also, in their schema of task-segregation, who should do it. Ideas of pollution as “avoidance” (Froystad 2003) apply not only to employers, but workers also “avoid” certain activities as well as certain places within the household, like the bathroom. Based on identities, some workers have preferences to work in certain parts of a house, while some workers may get “trapped” in certain places or have limited access within employers’ home. The identity-based access (or lack of it) within the home has consequences for workers’ everyday experience of workplace, as the following two cases will show.
The hierarchies of caste and religion are negotiated not just between workers and employers but, as the following narrative shows, are subject to negotiation among workers themselves. Jummi (58), Muslim by faith, works for several Hindu employers. Most employers refused to hire her for washing utensils,
among other tasks, as they do not want Muslims entering the kitchen. In these homes, Jummi does other tasks like cleaning the house and washing clothes but does not perform any tasks that require her to enter the kitchen. If she needs water to drink, she has to ask the employer as the water is always in the kitchen. Similarly, Heena (21) is not allowed to enter the kitchen because she is Valmiki by caste. She has been told that if she wants water she needs to ask other workers, who are “higher” in caste and can enter the kitchen, for water: “They tell us, ‘do not take water on your own. Do not touch it.’” It is established that domestic workers have unequal claims to the use of space in relation to employers. I argue that workers have unequal claims to space also in relation to each other. Muslim and Dalit workers’ experience of accessing various spaces in an employer’s home is very different from workers from other social groups. This in turn shows their inability to access better-paid tasks like cooking. As Parwati Raghuram’s (2001) work shows, wom-en domestic workers’ caste identity determines the tasks they are assigned, while the nature of tasks determines their rela-tionship with the employers and the household space, which in turn decides their entitlement to various benefi ts like gifts, better wages, and bargaining power. Vimla (60), Valmiki by caste, works for extremely wealthy employers, each of whom employs 8–9 workers at a time. Surprisingly, Vimla does not get to meet her employers, as usually it is their live-in workers who supervise her. Vimla shares in a low voice that if she goes to work hungry and asks any of the full-time or live-in workers to give her something to eat, or if she is having a headache and asks for tea, the other workers refuse. When asked about her relationship with these co-workers, Vimla says:
We [she and her daughter, Heena] do our work and come back. There’s no warmth in the relationships with other workers. The feeling that we [Vimla and other workers] work for the same employer is just not there.5 They do not feel like giving me anything to eat in spite of the fact that I also work like them in the same house. They eat and share amongst each other. Nobody offers anything to us.
The other workers being referred to perform tasks like cook-ing, babysitting, driving the private car of the employer. Vimla works in fi ve such households where she cleans bathrooms, which is often seen as a “peripheral” task. Her work does not require her to spend much time within the space of home unlike the other workers she mentions. For Vimla, to access amenities like food and tea, she has to negotiate with other workers who have more, and better claim over the household resources and places like the kitchen. Vimla cannot directly access some of these basic amenities also because the tasks which she performs are closely linked to her caste due to which she cannot move around freely, as she will “pollute” the house. This particular experience dovetails with Gul Ozyegin’s (2001) formulation of power in domestic work relations, wherein she suggests that power is something which is not given, but rather “constructed, maintained, and negotiated” (p 150) between employer and workers. This particular experience highlights how workers can be in subordinate positions in the space of the home not only in relation to employers but also in relation to other workers. Domestic workers in relation to employers
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may have less power; however that is not the only form in which power shapes work relations in the household space. Workers’ claims on household resources, which are also basic amenities in this case, can be linked to the tasks they perform, and very often, the tasks performed are linked to their caste and religious identities.
Non-Dalit workers express a sense of ambivalence about the “disappearing” caste-based segregation (referred to in this paper earlier): while some of them look at it as a loss, others view it as a welcome change. Workers who are subject to dis-crimination do not agree with the discriminatory practices of employers, but only some of them have the courage to question them. However, the way of questioning can often hide contradic-tions. Non-Dalit workers can counter the practices of untouch-ability and the humiliation it entails by confronting employers, but the difference in social positions can often generate very different forms of resistance. For instance, the very lexicon of resistance can often legitimise the untouchability against Dalits, at least in the discursive domain. Non-Dalit workers while confronting employers’ untouchability say “main koi bhangi nahi hoon” (I am not Bhangi—an “untouchable” caste) is an example of the rhetoric of protest in everyday politics of domestic work. Adib and Guerrier (2003), drawing upon the critical literature on resistance, in the context of women in hotel work have argued: “the multiplicity of the types of resist-ance and the contradictory nature of resistance itself suggests that workers’ resistance can both reproduce as well as trans-form” the structures of power (p 418). The responses also indi-cate the importance of seeing female domestic workers as both subjects and objects in middle-class homes. While they are shaped by various practices they also make sense of these practices and position themselves accordingly. This element of strategic positioning in the light of employers’ practices shines through in what Geeta and Raj say about employers.
Geeta (60) and Raj (55) answer their employers’ questions about caste by identifying themselves as Buddhist, which is not really a caste. Both the workers, who are from Maharashtra and are neighbours, shared that they trust sardar (Sikh) employers and prefer working for them and, in return, how the sardars also trust and prefer them. Such views echo what Barbara Harris-White and Valentina Prosperi (2014) call “micro-political economy of gains.” According to Harris-White and Prosperi, workers in the informal economy deploy strategies, including those of excluding other social groups, and thus secur-ing small gains like better wages at the cost of these other groups. The two contrasted themselves from Bhangi based on employers’ practices, as the following conversation reveals:
Me: So, what kind of questions do sardar [employers] ask you while hiring for work?Raj: They ask us about our place of origin. That’s all. We tell them that we are from Maharashtra.Me: Do they ever ask your caste?Raj: Yes, we tell them that we are Buddhist. Me: So, do they express any objection on that?Raj: No. They eat food cooked by us. We cook for them. They ask caste because they do not want Mochi (leather-processing caste) to work at their home, and they doubt Bhangis for the “purity”-related reasons
(in a lower voice). So, they [Mochi and Bhangi]6 lie about their caste, but employers ultimately recognise them and do not hire them.Me: But how do they [employers] recognise them?(Geeta pitches in)Geeta: By their way of talking and living. They are always tip-top dressed up. They say: ‘kya ri,’ ‘kahan ja rahi ri’ (where are you go-ing?), ‘aa rahi ri’ (are you coming?) (In a tone of mimicry).
Even though Geeta and Raj do not reveal their caste origin, they are almost certainly Dalit converts themselves, and con-verting to Buddhism allows them to hide their caste identity. It is more than a mere speculation for two reasons: fi rst, they hail from the state of Maharasthra that has witnessed mass conversion of Dalits (predominantly from Mahar caste) to Buddhism following Ambedkar, as a collective resistance to caste system, and second, the duo are not the only Buddhists in their locality, there are a few more migrants from Maharashtra who are Buddhists, as I was told. One of the ben-efi ts (for the lack of a better word) of converting to Buddhism and removing the markers of caste in terms of surname and others has been the reduced susceptibility to caste-based discrimination.7 However, being a Buddhist in this context also enables them to claim similar status as upper castes in relation to the untouchable workers by being able to get hired for tasks like cooking and by embodying the ideal femininities, which comes out in their mocking of “tip-top” dressing.
According to M N Srinivas (1956), eating, way of speaking, and dressing habits are critical spheres wherein the caste hier-archies are marked and these are the symbols through which a group can claim higher caste status and deny what is deemed lower. He termed the process of appropriating the symbols in-dicating higher caste status by lower caste individuals, “San-skritization.” Both the workers make fun of the way in which Valmiki women converse in Hindi (in which they add ‘ri’ while addressing others, usually fellow workers) and that becomes a marker of distinction between them, non-Dalit, and Dalit workers. In a way, it is a mockery of a group’s lack of knowl-edge of rules of a language, which also becomes part of identi-ty of that group. The duo mocks Dalit women’s way of dressing up and talking in a tone that conveys the condemnation of cer-tain types of feminine behaviour. The mockery echoes the up-per-caste discourse, according to which, Dalit women’s femi-ninity is constructed as “fallen” and in opposition to those of upper caste women (Chakravarti 1993). The same discourse also constructs Dalit women as sexually immoral and thus dan-gerous. Geeta’s and Raj’s understanding of “tip-top” dressing as an obvious marker of lower caste women and something which is impossible to hide even after efforts emanates from the same discourse, and somewhere naturalises the caste distinc-tion, which are beyond manoeuvring. In other words, these are expressions of body-politics of caste, in which one’s attire becomes a trigger for tensions and also the site of those tensions (Gidwani and Sivaramkrishnan 2003). It has been observed that Muslim women, like Dalit women, hide their identity and present themselves as Hindu by assuming Hindu-sounding names and by wearing bindi, sindoor and other markers of upper-caste Hindu women’s femininity (Rahman 2013). Often,
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workers interpret the importance of caste as an identity, of their own and others, through employers’ notions about certain “other” castes and social groups, particularly the stigmatised ones. As a response, workers also learn about the ideal feminine dressing behaviour and come to embody the same, as it is appreciated and rewarded by employers.
The question arises: what do employers’ practices of asking for caste and their attendant hiring decisions have to say about home as a space? Employers want to ascertain their prospective domestic workers’ caste to make sure that the sociocultural others do not enter the space of home, which also includes its material boundaries (see, for example, Froystad 2003). By keeping people from certain groups out of the home, home is produced symbolically in a desired manner. Female domestic workers, as social subjects with different social positions, when making sense of these practices, resist, collaborate and often do both in such a production of home. When employers prefer workers only from certain groups, they try to create boundaries.
However, this narrative of socio-spatial boundaries demar-cated and defended by employers against the possible trans-gression of workers is limiting. The popular narrative of trans-gression of household boundaries presents an employer’s home as the “inside,” which is vulnerable to transgression from the “outside.” However, the following section will show that the workers’ perspective subverts the meaning of the inside/outside in this context.
Workers’ Notions of Employers’ Identity
The meaning associated with a place changes when multiple standpoints are included in constructing the narrative about that place—this is the spirit of Doreen Massey’s (1994) famous essay “A Place Called Home?” Certain places can be sites of “nostalgia, safety, belonging and identity,” but that is not the only form in which they exist: in Massey’s opinion, “of course places can be home, but they do not have to be thought of [only] in that way” (p 172). In the public policy context, for a very long time domestic work and working conditions therein have not been regulated in the name of privacy of the employer, which highlights how there is one dominant image of home, which overrules all other aspects, including that of it being workplace for domestic workers.8 In the existing scholarship, while examining the spatiality of middle class homes, only employers have been seen as the subjects, workers have been at the margin or absent in these narratives. The narratives pose questions to Dickey’s analysis, according to which:
The asymmetrical movements in domestic service account in part for why domestic workers do not join their employers in raising fears about the mixing of inside and outside. It is not that the distinction between inside and outside is insignifi cant to domestic workers or to the poor in general. Rather, while domestic workers regularly en-ter others’ domestic spaces, they rarely face employers’ entrances into their own. Concerns with purity are also greater among higher castes, which have a proportionately higher representation among the middle and upper classes. All told, crossing the threshold of em-ployers’ households does not create parallel anxieties for domestic workers (p 480).
Dickey’s analysis is based on “class” as the core organising principle and employers are certainly superior in terms of class position. However, religion and caste turn the social hierarchies around to a great extent. More importantly, the boundaries of social differences are not just marked out in the material space—“out there”—but also embodied by the subjects and often enacted through practices of bodies, symbols and speech. While Dickey’s reading of differences marked out in the household space is rich and insightful, it remains greatly misplaced simply because of the assumption that just because employers are not entering worker’s homes, they are not threatening the “inside” workers embody.
Domestic workers’ notions in Delhi challenge the dominant narrative constructed on the basis of employers’ anxiety of pollution of their home by “outsider” workers (Froystad 2003; Dickey 2000a). I argue that the apparent “cleanliness” of middle class homes seem to be contested by the workers’ own socio-cultural understanding of “clean” and “dirty,” based on which they draw alternative boundaries within employers’ homes. However, these notions also suggest social stigma against certain groups which persist irrespective of which side of work relations they are on. For example, both Muslim workers and Muslim employers are stigmatised.
Workers’ agency in selecting employers has largely been overlooked in the Indian context. In Turkey, Ozyegin (2001) observes that workers often assess employers’ socio-economic status before they start working for them, as workers expect certain other gains, beyond remuneration, from the employers. In Hong Kong, Paul (2011) fi nds that workers often use racial stereotypes to select employers and do not get hired “passive-ly.” In the case of Delhi, the narratives demonstrate that work-ers assess employers based on their sociocultural status and this assessment directly refl ects in their notion of employer’s household space. Some Hindu workers have very strong stere-otypes and prejudices against Muslim employers and workers. Most Hindu workers do not want to work in Muslim house-holds because they perceive the living and eating practices of Muslims as “polluting” and unhygienic. Workers, based on these perceive living practices, form very strong notions about the Muslim household spaces. Similarly, there are social groups which have been stereotyped to have clean household space. According to Bhagwati and Raj, for instance, Punjabi and sardar are kind-hearted, considerate, and their homes are clean, and they like to work for them. On the other hand, Mala does not want to work for Bengalis and Muslims because she thinks their homes are fi lthy and they eat “dirty” food (referring to fi sh and beef respectively). Bhagwati explained her reluctance to work in Muslim households in the following words:
It is believed that they eat ‘dirty food.’ It is because of ‘dirty food’ that I do not work for them. They also keep spitting around the house. I don’t like that, and that’s why I do not like working for them. I like working for Sardar (Sikh) and Punjabis, as their homes are clean and children also live hygienically.
Bhagwati does not state this from her own experience, rather knows it through social-belief system, as she herself explained
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(“it is believed…”). Her perception is particularly telling as it reminds us how the “social” is linked in forming what is “spatial,” and the two co-construct each other: here, the stereo-types of behaviour constructs certain imagination of places, and it does not stop there, as those imaginations circulate through discourses in reconstructing these groups as different and the less desirable than others. Kalawati also does not want to work for Muslims because if she works and they insist on her having tea, it will be diffi cult for her to have tea from their cup, from a kitchen that she identifi es as “dirty.”
Workers generally do not want to work in households they identify as “dirty”—gande ghar. They would prefer a saaf- suthara ghar. Some workers share that when they go to a new house they also see how people live there and if the house is clean or not. In some cases, workers clearly stereotype certain sociocultural groups with ritually “impure” and unhygienic living practices, and thereby identify their homes as dirty. Some of these views are shared when I want to know workers’ notions of caste. For example, in response to the question, “Does your employer’s caste matter to you?” some workers respond by saying that caste does not matter to them, but the employer should not be Muslim. Usually, upper-caste workers are unwilling to work in lower-caste people’s homes. Lalti shares that she tries to fi nd out social background of her employers and usually asks them about their caste. She explains the rationale for doing so in following words:
Lalti: I have to ask [their caste]. I have had food and tea in your home. So, I will also inquire about your caste, what if you are lower in caste…Interviewer: so, if any of your prospective employer is lower in caste, will you still work there?Lalti: I have to work. Some people do not share their caste.Interviewer: Do you have tea-water at such employers’ place?Lalti: I do not have tea and water at everyone’s home. I have tea or water only at the Employers’ I have information about [their caste]. I do not even ask anyone to give me to eat or drink. I can have water or tea at employers who are higher in caste and to whom I have revealed my caste. Such homes are good.
Considering an employer’s home to be polluted based on his or her identity is one of the approaches workers deploy in forming a perception. Another approach to identifying pollution is to look for breach of social segregation; in such cases workers identify even upper-caste Hindu employers’ homes as ritually contaminated. Kalawati (60) expressing her dismay with the increased participation of jamadars and Muslims in the home shares how one of the housing societies she works in has many Bhangi (Valmiki) domestic workers who do all kinds of tasks, including those involving the kitchen. Workers from all social groups performing tasks indiscriminately make her anxious about her purity and this indiscriminate access for all social groups in her opinion makes even the upper-caste Hindu household impure. As a response, Kalawati carries her own water and does not eat at her employers’ place because she thinks these days employers have started hiring people irre-spective of their social background. Kalawati does not drink tea made by other workers and makes tea for herself, and she has a separate cup. She also adds that she has turned vegetarian “for religious reasons” recently and employers might have been
eating meat so she has to keep these things in mind. In domestic work relations, a “separate cup” has long been a signifi er of untouchability and denial of dignity to domestic workers by their employers. In my own interactions, most workers fi nd the practice humiliating and unacceptable. However, in Kalawati’s case, the absence of untouchability by employers towards the Dalit workers is one of the reasons why she practises segrega-tion at her own level, which is her way of drawing boundaries of social difference. By having a separate cup for herself, which is not accessible to anyone else, she produces privacy for herself in the employer’s home. Thus, intersections of class with caste, religion and gender produce a much complex and confl icting array of social hierarchies wherein workers practise untouchability, as practices of creating boundary, end up “repro-ducing and contesting social inequalities” (Lan 2003: 526) within employers’ homes.
All told, the narratives should not lead one to conclude that workers’ practices of untouchability can be equated with those of employers, as any attempt to do so will entail a complete overlooking of the power inequalities that shape not just the domestic work relations but social relations in general. For instance, a worker choosing not to work for a Dalit/Muslim employer is not parallel to a non-Dalit/non-Muslim employer refusing to hire a Muslim/Dalit worker, simply because such practices have far more serious economic consequences for the latter. In other words, even though workers have their caste and religious prejudices, they do not have the privileged posi-tion of class like their middle and upper class employers do.
Making Sense of Domestic Practices
Having found that workers also practise untouchability against other workers and even employers, how do we make sense of these practices? I argue that non-Dalit workers’ practices and discourses that support untouchability have to be seen in the context of the stigma9 that prevails in domestic work.
The servility inherent in the work due to its embeddedness in a history of colonialism and feudal relations makes it less than “work.” The reason why it is argued to exist as “servi-tude” (Ray and Qayum 2010) and not as “service” or work is precisely because of the pre-modern remnants: the widespread usage of the term “servant” is a testament to the legacy. The institution is still governed by the discourse of dependency and loyalty rather than the work contract. Many scholars have looked at the institution of domestic work through master/servant relations (for example, Froystad 2003; Srinivas 1995) and have underscored the servility inherent in the relation.
In addition, the embeddedness of the institution in caste relations has reinforced the stigma of caste-based labour. Many forms of caste-based labour have only contributed to cultivate a sense of “stigma” (Rao 2012). Historically, domestic work relations in India have been governed under the norms of the caste-based patron/client relationship, also known as Jajmani (Raghuram 2001). The upper caste groups’ ability to command lower caste and Dalit groups’ labour through con-sent and coercion for their household chores, particularly those tasks considered “menial” and “polluted,” has been a common
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feature of power relations of caste (Gopal 2013; Sinha 1986). The power to command labour of certain caste groups has also been a means of infl icting violence and humiliation on those groups.
Finally, the hegemonic discourse of femininity which is imposed by Brahminical patriarchal discourse (Chakravarti 1993) reinforces the stigma of domestic work. This logic asserts both that a woman’s labour is critical for reproduction and de-monises the sexualities of women outside the familial space and those performing paid labour (Gopal 2013). Performance of household chores in others’ homes thus become “shameful” as it represents a monetary transaction of a “sacred labour” only meant for a woman’s own home, similar to sexual labour which is legitimate only in one’s own home.
The stigma of domestic work is produced through a complex intermingling of these elements, and workers’ practices discussed here unveil a dimension of power emanating from these rudiments of stigma. The workers who supported untouchability were also the ones who shared detailed accounts of the “shame” they grapple with on a daily basis because they work in others’ homes. The shame is a refl ection of the sense of humiliation the women workers have. The embodied humiliation can be located in multiple and intersect-ing social hierarchies of caste, class and gender. It is different from the humiliation caused by the insult, degradation, discrimination and exploitation by employers.10 Among women domestic workers, the embodied humiliation operates in a manner that it becomes “a struggle against self and the other” (Guru 2009: 4). The way in which some domestic workers try to mark themselves as different from the workers of “other” caste and religious groups in the name of pollution or dirt shows their desperation to manoeuvre their lower class position while simultaneously reclaiming a relatively high ritual position in the social hierarchy.
Drawing on Paul’s (2011) work on domestic work, I argue that upper-caste Hindu workers’ avoidance of Muslim and Dalit employers refl ects the acts of “social distancing” while their preference for certain other social groups is a form of “so-cial alignment.” One may assume that with the increasing par-ticipation of women from diverse social groups,11 and not merely historically oppressed ones, the stigma of domestic work emanating from caste relations will gradually fade away. However, the situation of women participating from diverse social groups makes the need to demarcate the differences neatly, as the possibility of these differences getting blurred is seen as a threatening sign by the workers for their position in the social hierarchy. Thus, conventionally privileged groups distance themselves from socially unprivileged workers’ tasks and avoid employers’ from socially undesirable groups to negotiate dignity for themselves.
Through these strategies, workers try to convince not just other family members but also themselves about their social worth and thus such negotiations refl ect a hegemonic process at work. I argue these acts of untouchability in the material space of the employer’s home are indeed to mark out difference in the discursive social space. These are acts which try to
redefi ne the social difference and hierarchies by asserting spatial segregations. Kalawati shares that in her family nobody knows that she works as a maid, and that if her relatives fi nd out they will be disgusted at her for cleaning leftovers from others’ plates (‘ye doosron ke yahan joothan manjti hai!’) The metaphor of ‘joothan manjna (cleaning left over from others’ plate’)12 was used by many workers to signal the shame they experience in being domestic workers. She explains why she has to hide her work and the consequence of her relatives fi nd-ing out about her work in following words:
I will be marrying off my daughter one day…what if I do not fi nd a family [due to my work]? [They will say] that I clean left over from others’ plates…even today, people have a thinking like this in UP [Uttar Pradesh, her state of origin], back in the village. They socially and economically boycott [on fi nding out that somebody works as a maid outside caste norms].
Similarly, Lalti also does not tell anybody in her extended family about her work and has decided to keep it to herself. They would have taunted her for performing a polluting task like doing dishes, in Lalti’s words, “they think that she cleans left over from others’ plates in their home” (‘Sochte hain ye paraye ghar mein jhootan dhote hain. Tana marenge’). Paid domestic work is one of the occupations with a legacy of caste-based stigma, it is not just exploitation that characterises the work but also the stigmatisation that is the context in which it is different from any other work (John 2013; Rao 2012). Mary John very aptly in her examination of stigma and female labour discusses how women’s unpaid labour which is already devalued is devalued further when domestic workers are employed and this refl ects in the way workers are paid and treated. The shame Kalawati and Lalti express emanates not just from their upper-caste status but also from their embodi-ment of hegemonic femininities, according to which perform-ing household tasks for one’s own family is a matter of honour while working in another’s home degrades the same labour (Ray 2000). This is the context in which doing dishes at one’s own home is different from doing them at another’s home.
Conclusions
The voices of these women workers enrich the theoretical understanding of “home” and “outside” emanating from caste and religious othering. However to interpret the dimension of power in these dynamics as that of purity/pollution which are pervasive in the stratifi ed relations between middle class em-ployers and domestic workers, because it is not just employers but also workers who practise untouchability, is only a half truth of underlying power in such practices. In other words, such a reading is devoid of the larger forces in the Indian econ-omy and society, spread across time and space, which situate the micro-reality of the work. While employers may practise untouchability to maintain (or gain) social status, for non-Dalit workers the notions of untouchability are often the strategies of self-preservation and dignity.
This strategy of negotiation should be located in the context of domesticity, which defi nes domestic work relations. The meta-script of domestic labour relations is written with the
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essence of domesticity—gender, caste, purity and pollution—through which the specific forms of class relations are ex-pressed. The strategies of negotiation thus often get expressed in this set terrain of power through a continuum of the same language of hegemonic power in counter-construction of pervasive relational power-scripts. Upper or relatively privi-leged castes have always practised untouchability to maintain their status and power in relation to other relatively less powerful groups.
However, specific contexts like domestic work expose us to the specific recon figurations of the social status and power. Actually, the narratives give us insight into the contextual forms of power and vulnerabilities which exist as a continuum
rather than as two polar opposites. In these contextual power relations—which are deeply embedded in the extra-contextu-al relations—the employers and workers become actors who occupy different locations in the spectrum of power and vulner-abilities. Workers are very differently positioned (in relation to each other and employers) in these relations due to the differ-ences of caste and religion, and thus respond to the practices of purity and pollution in general in employers’ home space in varied ways, accounting their experiences which are very dif-ferent from each other. Finally, it is these different social loca-tions which are also directly linked to economic gains, status, and symbolic power which underscore the constantly evolving ruptures in the unionisation of domestic workers as workers.
notes
1 See, for instance, Ray and Qayum (2010), and Matilla (2011).
2 I call the arrangement “dominant” because part-time domestic work is dominant whereas full-time, live in and full-time, live-out ar-rangements are few. The dominance cannot be established based on the existing statistics giving a countrywide picture. However, vari-ous micro-level studies confirm the domi-nance of the arrangement (for example, Ray and Qayum 2010; Vasanthi 2011; Neetha 2004 among others).
3 Usually, people from Valmiki caste are referred to as jamadars. They have been considered an untouchable caste which was socially assigned the task of removing (human and household)
refuse. In addition to Jamadar, another common term often used to refer to the same caste group is Bhangi. In this paper, all the three terms have been used in different contexts depending upon the terms used by different workers during the interviews.
4 All names are pseudonyms. 5 Vimla uses gulami and malik to refer to “work”
and “employer” respectively. The terms, if translated literally, mean “slavery” and “mas-ter” respectively.
6 Both the castes have traditionally been assigned to do the “polluting” tasks and by virtue of that, have been considered untouchable.
7 For instance, Sumit Baudh’s autobiographical account on his family’s conversation to Bud-dhism and how that changed the experience of
being subject to untouchability is a testimony of this. For details, see Baudh (2015).
8 See, for instance, Sharma (2014). For a detailed exploration of the workers’ perspective on employers’ home and the practices therein, see Sharma, S (2013), Reversing the Gaze: Home as a ‘Spatial Category’ from Domestic Workers ‘Lens A Study of Part-Time Female Domestic Workers in Delhi (unpublished).
9 A detailed elaboration on the genealogy and the contemporary interconnections of the stigma in domestic work is beyond the scope of this paper and it is one of the least explored issues in the contemporary discourse. So, I cannot commit to do justice to the issue in this one sec-tion. However, shedding light on its structure is inevitable here.
Decentralisation and Local GovernmentsEdited by
T R Raghunandan
The idea of devolving power to local governments was part of the larger political debate during the Indian national movement. With strong advocates for it, like Gandhi, it resulted in constitutional changes and policy decisions in the decades following Independence, to make governance more accountable to and accessible for the common man.
The introduction discusses the milestones in the evolution of local governments post-Independence, while providing an overview of the panchayat system, its evolution and its powers under the British, and the stand of various leaders of the Indian national movement on decentralisation.
This volume discusses the constitutional amendments that gave autonomy to institutions of local governance, both rural and urban, along with the various facets of establishing and strengthening these local self-governments.
Authors:
V M Sirsikar • Nirmal Mukarji • C H Hanumantha Rao • B K Chandrashekar • Norma Alvares • Poornima Vyasulu, Vinod Vyasulu • Niraja Gopal Jayal • Mani Shankar Aiyar • Benjamin Powis • Amitabh Behar, Yamini Aiyar • Pranab Bardhan, Dilip Mookherjee • Amitabh Behar • Ahalya S Bhat, Suman Kolhar, Aarathi Chellappa, H Anand • Raghabendra Chattopadhyay, Esther Duflo • Nirmala Buch • Ramesh Ramanathan • M A Oommen • Indira Rajaraman, Darshy Sinha • Stéphanie Tawa Lama-Rewal • M Govinda Rao, U A Vasanth Rao • Mary E John • Pratap Ranjan Jena, Manish Gupta • Pranab Bardhan, Sandip Mitra, Dilip Mookherjee, Abhirup Sarkar • M A Oommen • J Devika, Binitha V Thampi
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Mumbai • Chennai • New Delhi • Kolkata • Bangalore • Bhubaneshwar • Ernakulam • Guwahati • Jaipur • Lucknow • Patna • Chandigarh • Hyderabad Contact: [email protected]
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10 In “Humiliation: Claims and Context,” Gopal Guru and other contributors (particularly Bhikhu Parekh) establish that how the term “humiliation” captures a particular form in which power functions, which is different from how the power manifests itself in “discrimina-tion,” “insult,” “injustice” and so on. According to Parekh, for instance, one can feel humiliat-ed, without anybody insulting him/her. For de-tails, see Guru (2009).
11 Recently, for example, one study conducted in Bengaluru found that it is not just the women from the oppressed classes who participate in paid domestic work. Increasingly women from other, traditionally privileged groups, are also participating. For details, see Staff Reporter (2015). Also, see Domestic Workers: Conditions, Rights and Responsibilities—a Study of Part-time Domestic Workers in Delhi (2010) by Jagori.
12 The idea of “Jootha”/”Joothan” is peculiar to Indian society. The term carries a spirit of ritual pollution. It is impossible to fi nd its synonym in English and it was a challenge to translate it into English. I borrow the translation from Om Prakash Valmiki’s autobiography Joothan.
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Tax Efforts of West Bengal and Andhra PradeshComparison Based on Consumption Expenditure
Jayanta Kumar Dwibedi, Sugata Marjit, Koushik Kumar Hati
This is related to a broader study conducted for the 14th Finance Commission, Government of India. Partial research support has been provided by the Centre for Training and Research in Public Finance and Policy at CSSS, Kolkata. The usual disclaimer applies.
Jayanta Kumar Dwibedi ( [email protected]) teaches at Brahmananda Keshab Chandra College, Kolkata. Sugata Marjit ([email protected]) and Koushik Kumar Hati ([email protected]) are with the Centre for Studies in Social Sciences, Calcutta.
West Bengal is facing dire fiscal and financial stringency.
Bengal is compared to Andhra Pradesh in order to
understand its revenue-generating capacity. A new
approach that uses National Sample Survey Office data
on consumption expenditure is used to decompose the
aggregate consumption data of each state to estimate
tax collection for each commodity group. It is found that
some part of West Bengal’s poor tax realisation may be
due to unusually low per capita consumption of some
commodities that are important for taxation. The
discrepancy might be related to a larger informal sector,
and thereby, under-reporting of actual consumption, or
genuine consumption behaviour reflecting a different
intra- and inter-temporal preference structure. This
opens up new avenues for future research.
1 Introduction
West Bengal (WB) is at present in a state of dire fi scal and fi nancial stringency manifested in high revenue and fi scal defi cit, and a huge debt burden. A number
of factors are said to be responsible for the present situation. One important factor is the effort to generate own tax revenue (OTR) to fi nance the state’s expenses. OTR acts as the prime source of revenue for any government. Despite having a size-able gross state domestic product (GSDP), WB has performed badly in terms of OTR collection. This paper attempts to fi nd the causes behind such poor revenue collection. However, evalua-tion of state fi nances has to be done in terms of a benchmark or a valid reference point. A natural choice seems to be to use the national average as a benchmark. But averaging across states with fairly large variations in economic and social attributes cannot do justice to the performance of a state. Therefore, along with the national average, we take Andhra Pradesh (AP) (including Telangana) as the reference point because of its similarity to WB in terms of size of the economy (GSDP), per capita income, and population.
The main contribution of this paper is to explore the extent of tax collection from different groups of consumables as cate-gorised in the National Sample Survey Offi ce (NSSO) consump-tion expenditure surveys. Comparable components of con-sumption are studied along with the applicable tax rates for both states. This exercise would help policymakers identify the micro sources of the problem. The study is based on a data set ranging from 2002–03 to 2011–12. Wherever data was available, we have extended our study up to 2012–13. Though we should keep in mind that the inherited fi scal burden is not likely to be streamlined anytime soon, a careful scrutiny of the fi scal scenario over the last decade or so will provide some clues for possible remedial policies.
2 State Profile: Andhra Pradesh and West Bengal
To start with, we compare some basic social, demographic and economic differences between the two states. WB and AP are said to be of similar “size” in terms of population and volume of economic activities. In spite of that AP tends to perform much better than WB in any of the areas of fi scal management. It is well known that the revenue defi cit of WB is the highest among the fi ve highly-indebted states of India today, and consequently the state has become the most indebted state among all “general category” states of the country. Our benchmark state of this discussion, namely, AP, has shown signifi cant improvement in
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state fi nances by reducing revenue defi cit to zero and running surpluses since 2006–07. If we look for the root causes of this increasing defi cit of WB, it can be seen that on the one side the actual tax collection is far below potential, causing shortfall of revenues, and on the other side, ineffi ciency is causing a rise in expenditure. In 2011–12, WB managed to collect only 4.6% of GSDP as OTR, whereas AP collected 8% of the same in the same fi nancial year. Table 1 corroborates that AP can indeed be con-sidered a benchmark state to evaluate WB’s situation.
3 Revenue Effort
We now focus on the central objective of the study and try to examine the revenue generating capacity of WB by estimating and analysing various fi scal parameters that are considered to be the indicators of the tax effort of a state.
3.1 Revenue Receipts
To start with, we look at various sources of revenue of the two states for the entire study period (Table 2). It is clear that WB’s dependence on cen tral transfers has incre ased signifi cantly over the last decade. The share of the state’s own revenue (tax plus non-tax) in total revenue receipts declined sharply from 56.4% to 44.7%, whereas in AP there has been a sizeable increase from 64.8% to 69.5%. Increased dependence on central transfers are primarily on account of the state’s ina-bility to collect OTR as well as its inability, or reluc-tance to levy appropriate user charges to collect non-tax revenue.
When we compare states in terms of size of the economy (GSDP in this case) we can see that WB performed badly in generating own tax as well as non-tax revenue. Table 3 presents different revenue components as percentages of GSDP for WB and AP for the study period. Revenue receipts as a percentage of GSDP increased marginally in WB, but remained signifi cantly lower than AP.
As can be seen from Table 3, OTR as well as own non-tax revenue (ONTR) as a percentage of GSDP in WB has been very low compared to AP. For most of the years from 2002–03 to 2012–13, the OTR–GSDP ratio for WB remained below 5% and ONTR–GSDP ratio remained below 0.5%. Only in 2012–13, did the OTR–GSDP ratio for WB cross the 5% mark owing to an impressive
performance of OTR growth of nearly 31% in 2012–13. AP, on the other hand, registered a signifi cantly higher OTR–GSDP ra-tio as well as ONTR–GSDP ratio for the entire period. AP experi-enced a sizeable increase in its OTR–GSDP ratio from 7.1% in 2002–03 to 8.3% in 2012–13. If we compare own revenue col-lection (OTR plus ONTR) as a percentage of GSDP, it is very sur-prising to note that AP’s own revenue as a parentage of GSDP is nearly double that of WB.
3.1.1 OTR: OTR is undoubtedly the most important source of revenue for any state government. The fi scal performance of a state is best judged by its performance in generating OTR. This is the source which gives a state maximum fl exibility in gener-ating revenue and allocating expenditure. WB’s OTR grew at a compound annual growth rate of 16.5% as compared to 17.4% in AP during the referred period. Figure 1 presents the relative performance of the two states in terms of OTR growth.
Revenue generating performance of a state can be judged by comparing its tax effort with the tax effort of similar level of governments. We defi ne tax effort as the ratio of actual tax revenue of a government to its taxable capacity. Taxable capa-city of a country is generally measured in terms of gross do-mestic product (GDP) with an implicit assumption that GDP is the closest possible proxy for the tax base of an economy. In case of states within a country, GSDP is taken as the proxy for the base, and therefore the tax effort of a state is generally measured in terms of own tax to GSDP ratio.1
Table 1: At a Glance: Andhra Pradesh and West Bengal, 2011–12Indicators Andhra Pradesh West Bengal
Population (in 2011) 8,46,65,533 9,13,47,736
GSDP (2004–05 prices) 4,050.46 billion 3,291.37 billion
Growth rate of GSDP 7.82 6.26
Per capita GSDP (2004–05 prices) 47,840 36,031
Revenue deficit Nil 145.7 billion
Debt burden 1,395.1 billion 2,077.02 billion
Annual interest payment 114.12 billion 160.97 billion
Source: Ministry of Statistics and Programme Implementation, Government of India and State Finance: A Study of Budgets, Reserve Bank of India.
Table 2: Sources of Revenue over the Years (%)Year West Bengal Andhra Pradesh Share of Share of Share of Share of OTR Central OTR Central Transfer Transfer
2003–04 56.4 43.6 64.8 35.2
2004–05 56.6 43.4 69.6 30.4
2005–06 48.1 51.9 68.6 31.4
2006–07 50.1 49.9 68.7 31.3
2007–08 48.4 51.6 66.2 33.8
2008–09 52.5 47.5 68.5 31.5
2009–10 52.4 47.6 66.5 33.5
2010–11 49.7 50.3 69.0 31.0
2011–12 44.7 55.3 69.5 30.5
Source: Calculation based on RBI data.
Table 3: Components of Revenue Receipt as Percentage of GSDPYear West Bengal Andhra Pradesh RR/ OTR/ ONTR/ Central RR/ OTR/ ONTR/ Central GSDP GSDP GSDP Transfer/ GSDP GSDP GSDP Transfer/ GSDP GSDP
2002–03 8.7 4.2 0.4 4.1 13.0 7.1 2.0 3.9
2003–04 8.8 4.7 0.3 3.8 13.3 6.8 1.8 4.7
2004–05 9.5 4.8 0.6 4.1 12.8 7.2 1.7 3.9
2005–06 10.3 4.5 0.4 5.4 13.6 7.5 1.8 4.3
2006–07 9.9 4.5 0.5 4.9 14.7 7.9 2.2 4.6
2007–08 10.1 4.4 0.5 5.2 14.8 7.9 1.9 5.0
2008–09 10.8 4.2 1.5 5.1 14.7 7.8 2.3 4.6
2009–10 9.3 4.2 0.6 4.4 13.6 7.4 1.6 4.6
2010–11 10.3 4.6 0.5 5.2 13.9 7.7 1.8 4.3
2011–12 10.9 4.6 0.2 6.0 14.1 8.0 1.8 4.3
2012–13(RE) 11.6 5.2 0.3 6.1 14.5 8.3 1.7 4.5
RR=revenue receipt; OTR=own tax revenue; ONTR=own non-tax revenue; RE=revised estimates; GSDP=gross state domestic product.Source: Calculation based on RBI and CSO data.
24.4
13.2
4.7
12.6 12.29.8
17.2
25.0
18.0
29.9
9.4
17.7 18.2
24.6
20.3
15.9
5.4
28.3
18.017.4
Figure 1: Own Tax Revenue Growth in West Bengal and Andhra Pradesh (% share)
WB – West Bengal, AP – Andhra Pradesh.Source: Calculation based on RBI and CSO data.
2003– 2004– 2005– 2006– 2007– 2008– 2009– 2010– 2011– 2012– 04 05 06 07 08 09 10 11 12 13 (RE)
WB
AP
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As mentioned earlier, for WB the OTR–GSDP ratio has been very low compared to similar states as well as the national average. For the period 2002–03 to 2012–13 the OTR–GSDP ratio for WB remained below 5% (except in 2012–13) compared to nearly 7% for an average general category state. The OTR–GSDP ratios for WB shows a declining trend with a sign of slight im-provement from 2010–11 onwards. For other similar states, however, this has increased signifi cantly. For example, AP experi-enced an increase in its OTR–GSDP ratio from 7.1% in 2002–03 to 8.3% in 2012–13. For an average general category state also this ratio has increased from 6.6% to 7.3% during the same period. Our estimates of OTR–GSDP ratios for all the general category states show that WB scores the lowest on OTR–GSDP ratio, and this is true for all the years except 2002–03, 2004–05 and 2012–13, where it was marginally higher than Bihar.
The very poor revenue generation of the state is surprising because in terms of per capita income WB is ranked somewhere in the middle (ranked 10th) if all general category states are ranked according to per capita income, but it ranked last if the states are ranked in terms of their revenue generating capa city. AP, on the other hand, ranked ninth among the general category states in terms of per capita income, but ranked very high in terms of the OTR–GSDP ratio (fourth for most of the period). Despite having a mid-level per capita income and a satisfactory growth of income, it is puzzling to see such poor tax collection in WB. This prompts us to go dig deeper to analyse why the OTR–GSDP ratio is so low in WB.
3.1.2 OTR and Its Components: The OTR of a state mainly comprises taxes on professions and trades, property and capital, commodities, and services (including value added tax (VAT), state excise, tax on motor vehicles, and passenger tax). Clearly, most are not directly related to the gross income of a state. We now look at the different components of the OTR of WB, and compare those with AP to see which are performing poorly. We consider the contribution of different components for 2011–12 to fi nd the laggards (Table 4). In terms of contribution, state sales tax (now VAT) contributed the most (58.3%) to the total tax collection of WB, and taxes on property and capital trans-action is the second-most important contributor (18.5%). State excise also contributed a sizeable 8.5% to the WB’s OTR in 2011–12. This is, however, much lower than that of AP (18%). Taxes on vehicles contributed 4% to the total OTR as compared to 5.6%
in AP. Thus, taxes on commodities and services, and property and capital transactions can explain nearly 99% of the total tax collection for both the states, since there is very little scope for the states to collect tax under the head “taxes on income.”
When we compare the performance of dif-ferent tax components with respect to the tax-able capacity (that is, GSDP), it is evident that WB performed dismally in collecting tax under all heads except taxes on property and capital transaction (Table 5).
In case of VAT, which is the largest contributor to state OTR, WB’s tax effort (measured in terms of VAT–GSDP ratio) is nearly half of AP’s. WB’s excise revenue (at 0.4% of GSDP) was substan-tially lower than that of AP (at 1.5%). In case of collection un-der tax on vehicles, WB performed miserably with collection of only 0.2% of GSDP as against 0.5% in case of AP. Even though these two states are similar in terms of tax potential/capacity, in terms of actual tax collection WB failed miserably.
3.2 Causes of West Bengal’s Dismal Tax Effort?
Under the existing federal fi scal structure, the states’ right to collect taxes are largely confi ned to indirect taxes, predomi-nantly commodity taxes like sales tax/VAT and other indirect levies like state excise and motor vehicle tax. Being indirect, they are expected to be more closely related to consumption than income. In the following sections, the study attempts to estimate potential tax revenue from each of the important tax-es, using appropriate tax bases (instead of GSDP) for the corre-sponding taxes. We then compare this with actual collection to estimate the tax effort under more appropriate tax bases.
3.2.1 Consumption and Tax Collection: We now explore the possible relationship between tax collections by states and consumption behaviour. As mentioned earlier, major compo-nents of OTR are indirect in nature and are directly related to consumption. So, we analyse consumption data of WB and AP to see whether they can throw some light on resolving the tax puzzle. We have obtained the monthly per capita consumption expenditure (MPCE) for the states from the report of NSSO 68th round survey on con-sumption expenditure (NSSO 2013). The report provides MPCE sepa-rately for rural and urban areas. We have calculated the combined MPCE for the states using rural and urban populations as weights. Table 6 presents esti-mated per capita consumption and per capita own tax collection by WB and AP to see whether consumption can be viewed as a better tax base for a state.
Table 4: Tax Components within OTR and Their Relative Performance (in %) Share in Share in Tax to Tax to OTR (WB) OTR (AP) GSDP (WB) GSDP (AP) (2011–12) (2011–12) (2011–12) (2011–12)
State's OTR (1–3) 100.00 100.00 4.60 8.00
(1) Taxes on income 1.70 1.00 0.08 0.08
(2) Taxes on property and capital transactions 18.50 8.80 0.90 0. 70
(3) Taxes on commodities and services 79.80 90.20 3.70 7.30
Of which • State sales tax/VAT 58.30 62.20 2.70 5.01
• State excise 8.50 18.00 0.40 1.50
• Vehicles tax 4.00 5.60 0.20 0.50
WB = West Bengal, AP = Andhra Pradesh, GSDP = gross state domestic product, OTR = own tax revenue.Source: Authors’ calculation based on RBI and CSO data.
Table 5: Major Tax Components as a Percentage of GSDPType of Taxes West Bengal Andhra Pradesh
Own tax revenue 4.6 8.0
Taxes on income 0.1 0.1
Taxes on property and capital transaction 0.9 0.7
Taxes on commodities and services 3.7 7.3
Value added tax 2.7 5.0
State excise 0.4 1.5
Taxes on vehicles 0.2 0.5
Source: Calculation based on RBI and CSO data.
Table 6: Consumption and Tax CollectionStates Per Capita Per Capita OTR as OTR Consump- Percentage (Yearly) tion of Consump- (2011–12) (Yearly) tion (2011–12) (2011–12)
Andhra Pradesh 6,293 24,790 25.4
West Bengal 2,730 20,460 13.3
Source: Authors’ calculation based on RBI data and NSSO (68th round) data.
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As Table 6 suggests, an assessment of the tax effort of the state based on a different tax base approach gives no better result for the state. Considering per capita consumption as a proxy for taxable capacity of a state, WB’s tax effort was 13.3% of consump-tion, which is much lower than the tax effort of AP at 25.4%.
We must mention here that it is not just average consumption that affects the taxable capacity of a state. Consumption pattern and the tax structure together play a crucial role in determining tax collection. For example, difference in per capita consump-tion of electricity is important from the viewpoint of tax col-lection as consumption of electrical appliances, electronic items and electrical goods directly increase the taxable capacity of a state as these goods are usually taxed at higher rates (13.5%/14.5%). Per capita electricity consumption in WB, at 442.5 kilowatt-hour (kWh) in 2008–09, was signifi cantly lower than AP’s per capita consumption at 928.2 kWh. The total amount of electricity sold to consumers in AP (54,241.1 gigawatt-hour (gWh) in 2008–09) was substantially higher than WB’s (27,779.3 gWh). Similarly, our estimates from the NSSO 68th round consumption data show that monthly per capita consump-tion of pulses in WB was around Rs 29, whereas the corre-sponding value for AP was Rs 54. While pulses are taxed at 5% in AP, the same are exempted from tax in WB. With populations of more than nine crore, one can easily estimate the extent of loss in tax revenue in WB due to a different tax structure. When we reconcile item-wise consump-tion fi gures along with the VAT schedules of the states we fi nd that nearly 55% of monthly per capita consumption expendi-ture of AP is taxable as against only 44% in case of WB (Table 7).
3.3 A Counterfactual Exercise
If we conduct a counterfactual exercise and estimate WBs’s potential tax collection (taking AP’s tax-to-GSDP ratio as the potential/benchmark tax effort) we can see that Bengal’s potential tax collection for 2011–12 stands at Rs 43,057 crore against
a ctual own tax collec-tion of Rs 24,938 crore, which means a tax realisation of 58%. For WB, the VAT realisation fi gure was 53.9%. If we consider taxable consumption as the appropriate tax base and estimate WB’s
potential VAT collection (taking AP’s VAT-to-taxable-consump-tion ratio as the potential tax effort) we fi nd a VAT realisation at 61.5% (Table 8). Clearly, some part of WB’s poor VAT collec-tion can be explained by its consumption behaviour.
If we compare the distribution of population in different MPCE classes for both the states it reveals some interesting informa-tion. Table 9 suggests that concentration of population in the
low MPCE cla sses is substantially higher in WB than AP, particularly in rural areas. This suggests that though average consumption is sim ilar in AP and WB (slightly higher in AP), in the case of WB dis-tribution is more concentrated in the bottom classes. From this we can argue that this type of consumption distribution hampers the ability to tax (as low consumption essentially means consump-tion of commodities like food items which are hard to tax).
One can look at this from a different angle as well. A very high concentration of population around the bottom MPCE classes indicates that the poor may be consuming products obtained from the informal sector where bills are hardly pro-cured. This type of informal activities leads to widespread tax evasion and therefore low tax effort.
3.3.1 VAT on Petro Products: VAT collection from petroleum products account for around 30% of the total VAT collection in both the states (Table 10). VAT on petro products contributed Rs 4,227.3 crore to WB’s total revenue as compared to Rs 9,551.6 crore in AP in 2011–12. When we compare them in absolute terms or in terms of its contribution as a percentage of GSDP, it is evident that WB performed badly in generating suffi cient revenue through this channel as well. Revenue from VAT on petro products in WB accounts for 0.8% of GSDP in 2011–12, whereas for AP the fi gure is 1.4%. But when we compare this in terms of a more appropriate tax base, which is total petro sales in the state, the difference is not that signifi cant. One can eas-ily argue that low collection of VAT on petro products in WB is due to low per capita sales of petro products in the state, which is only 64.9 kg per capita against 124.5 kg per capita in AP. However it is not clear why there is such a big difference in per capita sales between these two states (Figure 2, p 67).
Again, if we estimate WB’s potential tax collection from sale of petro products (taking AP’s petro tax to GSDP as the potential
Table 7: Taxable Consumption in AP and WBState MPCE Taxable MPCE
West Bengal Rs 1,705 Rs 748 (43.9)
Andhra Pradesh Rs 2,066 Rs 1,135 (54.9)
Figures in the parentheses are the percentages of total MPCE (monthly per capita consumption expenditure).Source: Authors’ calculation based on RBI data and NSSO (68th round) data.
Table 8: Potential and Actual VAT Collection—West Bengal, 2011–12 With GSDP With Taxable as Tax Base Consumption as the Tax Base
Potential revenue (with AP’s tax effort) (in Rs crore) 26,964.3 23,614.2
Actual collection (in Rs crore) 14,526.7 14,526.7
Realisation (in %) 53.9 61.5
Source: Authors’ calculation based on RBI data and NSSO (68th round) data.
Table 10: Contribution of VAT on Petroleum Products in Total Revenue fromVAT and Sales of Petro Products, 2011–12State Contribution VAT Collection VAT Collection Per Capita Total Petro VAT/Petro of Petro on Petro on Petro Petro Sales Sales Sales Products in Products Products/ (Kg) (Crore Kg) (Rs/Kg) Total VAT (%) (Rs Crore) GSDP (%)
WB 29.1 4,227.3 .8% 64.9 592.8 7.1
AP 28.8 9,551.6 1.4% 124.5 1,054.1 9.1
Source: Authors’ calculation based on RBI data and data from Ministry of Petroleum and Natural Gas.
Table 9: Percentage of Population in Different MPCE Class—Rural and UrbanMPCE Rural MPCE UrbanClass (in Rs) AP WB Class (in Rs) WB AP
525 0.6 3.4 725 5.2 1.4
525–600 1.9 4.4 725–860 6.2 2.6
600–720 4.3 12.0 860–1,090 11.0 6.3
720–825 5.3 12.8 1,090–1,295 11.1 10.0
825–925 8.4 11.1 1,295–1,510 9.3 10.6
925–1,035 9.0 11.4 1,510–1,760 8.1 11.3
1,035–1,165 12.1 10.3 1,760–2,070 8.6 10.5
1,165–1,335 12.4 10.3 2,070–2,460 8.8 13.7
1,335–1,585 15.7 9.3 2,460–3,070 12.7 11.2
1,585–2,055 13.9 9.2 3,070–4,280 8.9 13.2
2,055–1,625 8.1 3.2 4,280–6,015 4.9 5.1
> 2,625 8.3 2.6 > 6,015 5.2 4.1
AP = Andhra Pradesh; WB = West Bengal; MPCE = monthly per capita consumption expenditure.Source: Authors’ calculation based on NSSO (68th round) data.
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effort) for 2011–12 and compare it against actual own tax col-lection we get a tax realisation fi gure at 54.5% (Table 11). If we now consider total petro sales as the tax base and do the same exercise we fi nd tax realisation at 78.7%. Clearly a substantial portion of WB’s under-performance in col-lecting tax on petro products can be ex-plained in terms of its reported consumption behaviour.
3.3.2 State Excise: State excise is one of the most important sources of revenue for a state. Excise revenue for a state mainly comes from duty on different types of liquors and from licence fee and fi nes. Figure 3 presents performance of excise revenue collection of WB and AP in terms of annual growth rates.
Though WB registered a healthy annual average growth rate of nearly 16% for the last decade, it remained below AP’s aver-age annual growth rate of around 19.1%. It is surprising to note that there are huge fl uctuations in the excise revenue growth rates in both the states. When we compare contribution of state excise in total tax collection and collection of excise rev-enue with respect to the size of the economy we fi nd that WB’s performance was way below that of AP’s (Table 12).
Table 11: Potential and Actual Tax Collection on Petro Products: WB, 2011–12 With GSDP With Sale as Tax Base of Petro Products as the Tax Base
Potential revenue (with AP’s tax effort) (Rs crore) 7,758.5 5,372.1
Actual collection (Rs crore) 4,227.3 4,227.3
Realisation (in %) 54.5 78.7
Source: Authors’ calculation based on RBI data and data from Ministry of Petroleum and Natural Gas.
Table 12: Excise Revenue as Percentage of OTR and GSDP Excise Revenue as Excise Revenue as Percentage of OTR Percentage of GSDP AP WB AP WB
2002–03 14.7 8 1.05 0.34
2003–04 13.9 7.1 0.95 0.33
2004–05 12.9 6.8 0.93 0.32
2005–06 14 7.2 1.05 0.32
2006–07 14.4 7 1.14 0.31
2007–08 14 7.1 1.11 0.31
2008–09 17.2 7.5 1.35 0.32
2009–10 16.6 8.5 1.23 0.36
2010–11 18.3 8.4 1.42 0.39
2011–12 18 8.5 1.45 0.39
2012–13 (RE) 16.8 7.9 1.39 0.41
Source: Authors’ Calculation based on RBI data.
Table 13: Excise Revenue and Alcohol Consumption, 2011–12 WB AP
Yearly per capita alcohol consumption (Rs) 430.8 957.8
Per capita excise collection (Rs) 231.8 1,135.3
Excise collection/alcohol consumption (%) 53.8 118.5
Source: Authors’ calculation based on RBI data and NSSO (68th round) data.
Source: Ministry of Petroleum and Natural Gas, Government of India.
57.8 60.555.6 54.5
58.9 59.7 62.367.4 64.9
85.9 86.478.8
84.6
100.9
112.9 113.3116.6
124.5
0
20
40
60
80
100
120
140
Figure 2: Per Capita Sale of Petro Products (in Kg)
2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12
WB
AP
Excise collection as a percentage of OTR in WB remained around 8% for the entire period which is much lower than the corresponding fi gures for AP. WB’s excise revenue remained stuck from 0.3% to 0.4% of GSDP as against 1% to1.5% in AP. Clearly in terms of excise revenue collection, WB failed terribly.
How much of this underperformance can be explained in terms of consumption behaviour? Our estimation from 68th round data of NSSO (2013) shows, in AP an individual from rural area spends 5.07% (Rs 89 in absolute term) of his total con-sumption expenditure on alcohol and intoxi-cants and the corre-sponding fi gure for the urban area was 2.29% (Rs 62 in absolute term). For WB the corresponding fi gures are much lower at 2.54% (Rs 33) and 1.64% (Rs 42) for rural and urban areas
respectively. Assuming a similar kind of record-ed alcohol consumption in both the states, one can easily argue that the difference in con-sumption pattern must have signifi cantly af-fected excise revenue collection (Table 13).
WB’s excise to GSDP at 0.39% against 1.45% of AP for 2011–12 can be viewed as excise reve-nue realisation at 27.1% of potential collection (assuming AP’s tax effort as the potential tax effort for WB). If we analyse excise revenue against per capita alcohol consumption, we fi nd WB’s tax realisation at 45.4%. Clearly, some portion of WB’s underperformance can be ex-
plained in terms of its consumption behaviour. But even after controlling for alcohol consumption, Bengal’s excise effort is signifi cantly lower than that of AP.
3.3.3 Taxes on Vehicles: Taxes on vehicles contributed around 4% to the total OTR of the state and remained around 0.2% of GSDP for the last 10 years. In case of AP the contribution is between 5% and 7% and the tax effort remained around 0.5%
10.69.4
8.3
10.7
9.9
14.515.8
33.3
23.518.7 21.0
12.4
3.29.3
28.328.0
17.6
42.4
1.7
41.3
16.3
9.2
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13(RE)
WB
AP
Figure 3: Excise Revenue Growth in West Bengal and Andhra Pradesh (in %)
Source: Authors’ calculation based on RBI data.
(RE)
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FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly68
of GSDP for the entire period. As motor vehicles taxes are collected on registration of vehicles, issuance of the driving licences, issuance of certifi cates of fi tness to transport vehicles and for transferring ownership of vehicles, etc, collection under this head is expected to be closely related to the number of registered vehicles in a state. Figure 4 presents the number of registered vehicles in WB and AP for the last 10 years.
WB’s revenue from taxes on vehicles to GSDP at 0.2% against 0.45% of AP for 2010–11 can be viewed as revenue realisation at 45.1% of potential collection (assuming AP’s tax effort as the potential tax effort for WB). We have tried to estimate WB’s potential tax revenue against the number of registered vehicles for 2010–11 taking AP’s tax potential as benchmark. We fi nd WB’s tax realisation at 111.3%. This suggests that poor collec-tion of taxes on vehicles in WB is entirely due to very low num-ber of registered vehicles in the state. This is however surpris-ing because in spite of being nearly similar in size, the number of registered vehicles in WB is less than one-third of that in AP
(Table 14).
Our analyses so far suggest that some part of WB’s poor tax collection can be explained in terms of its consumption data. But even this cannot explain the extent of underperformance of Bengal’s tax collection. This raises questions about the saving behaviour of the state as well. As state’s taxes are consumption based, a disproportionately high savings will affect tax efforts adversely. To see whether WB’s saving pro-pensity is higher than that of AP, we have used bank deposit data as the proxy. One should keep in mind that total savings consist of commercial bank deposits, post offi ce deposits, deposits in other non-banking fi nancial institutions as well as savings in informal institutions like chit funds, etc. However as nearly 81% of total savings of India can be explained in terms of deposits in the commercial banking system,2 one can use commercial banking data as a proxy to understand the savings behaviour without loss of generality. We have com-pared the deposit data of the two states to understand their savings behaviour and to see whether savings in WB are indeed higher than AP or not.
Table 15 clearly suggests that savings in WB are signifi cantly higher than that of AP. Per capita deposit in WB remained higher than AP throughout the period in spite of the fact that WB’s per capita income is lower than AP’s. Deposit–GSDP is signifi cantly higher in WB showing a disproportionately higher savings in the state relative to the size of its economy. Clearly a part of WB’s underperformance in tax effort can be attributed to its savings behaviour as well.
Another possible reason behind poor tax effort of WB could be its economic structure itself. WB economy is predominant-ly an informal economy with low and declining organised manufacturing sector. In the following section we look into the sectoral decomposition of WB GSDP and we compare this with that of AP.
3.4 Structure of the Economy and Tax Collection
We compare the sectoral composition of GSDP of WB with AP
by dividing different sectors into easy-to-tax sectors (like manufacturing, particularly organised manufacturing) and hard-to-tax sectors (like agriculture and services). Table 16 shows that in case of WB, the manufacturing sector contrib-utes only 9.7% to GSDP (2011–12) compared to 10.8% in AP. Within the manufacturing sector share of organised/registered manufacturing is only 52% in WB compared to 75% in AP.
In terms of tax collection, registered manufacturing is the easiest to tax, and probably one can consider it the most appro-priate tax base. In WB, the organised manufacturing sector contributes only 5.1% to GSDP compared to 8.1% in case of AP. Share of industry in the GSDP is the lowest in WB (18%) among the comparable states indicating a poor industrial perfor-mance which might be responsible for poor tax collection. As-suming that agriculture and services are sectors which are hard to tax, we fi nd contribution of hard to tax sectors in the GSDP in case of WB is as high as 82% compared to 73.4% in AP. The share of this hard to tax sector in the WB GSDP is in fact the highest when compared with other similar states.
Table 14: Taxes on Vehicles and Number of Registered Vehicles, 2010–11 WB AP
Number of registered vehicles (in lakh) 32.61 101.89
Revenue from taxes on vehicles (Rs lakh) 93,601 2,62,675
Tax/no of vehicles 2,870.3 2,578
Source: Authors’ calculation based on RBI data and data from Transport Research Wing, Ministry of Surface Transport.
Table 16: Sector Composition of GSDP (in Terms of Percentage Share) of West Bengal and Andhra Pradesh in 2011–12States Agriculture Industry Services Agri+ Manu- Registered Trade and Services facturing Manu- Hotels facturing
Andhra Pradesh 22.4 26.6 51.0 73.4 10.8 8.1 12.7
West Bengal 22.0 18.0 60.0 82.0 9.7 5.1 17.2
Source: Authors’ calculation based on CSO data.
Table 15: Deposits over the Years Year West Bengal Andhra Pradesh Per Capita Deposit Deposit/ GSDP Per Capita Deposit Deposit/GSDP (Rs) (%) (Rs) (%)
2002–03 10,495 51 9,465 41
2003–04 11,584 51 10,850 42
2004–05 13,339 54 12,355 44
2005–06 14,855 55 14,582 46
2006–07 17,610 58 17,384 47
2007–08 22,021 64 21,773 49
2008–09 26,111 67 26,352 51
2009–10 31,261 69 29,799 52
2010–11 35,243 68 34,671 51
2011–12 41,555 71 40,519 53
Source: Authors’ calculation based on RBI and CSO data.
Figure 4: Number of Registered Vehicles (in lakh)
Source: Transport Research Wing, Ministry of Surface Transport, Government of India.
23.66 25.5 26.8 28.3 32.0 27.6 30.4 27.5
32.6
50.02 57.2
64.6
72.2
63.7
72.1 80.6
89.2
101.9
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
WB
AP
120
80
40
0
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Over the years, the WB economy has experienced rapid infor-malisation of economic activities. Share of industry, particularly registered manufacturing, has shrunk drastically. Though signifi -cant structural changes have taken place for all the states and the national economy away from agriculture to services, most of the other states experienced a moderate rise in the share of industry. In case of WB, share of industry declined consistently over the years. Poor manufacturing performance along with the decline in the share of agriculture compelled a vast edu-cated unemployed labour force to set up small businesses de-pending on their own means. A huge number of the jobseekers absorbed in the informal sector, mostly in retail trading and small transport business. As can be seen from Table 16, trade (mainly retail trade) and hotels accounted for 17.2% of WB GSDP, which is the highest among the general category states.
The informal sector in a developing economy serves as a politically convenient strategic device to contain economic unrest. This was pointed out by Kolmar, Marjit and Mukherjee (2006). Sarkar (2006) argues that in WB the informal sector was used by the government for political benefi ts undermining formal sector activities. Some researchers argue that political control over these informal businesses crippled the state tax administration, preventing it to generate tax revenue from these economic activities. As documented by Datta (2010), selling sand collected from riverbeds or stones from quarries are big businesses but they have not generated suffi cient revenue for the government. The system of governance in WB, banking on informalisation, managing illegalities and merging the barrier between the state machinery and political management, has been taking its toll on government revenue. Increasing informalisation of the economy possibly resulted in under-reporting of activities which are very important determinants of the taxable capacity of a state.
As is evident from Table 17, consumption of some important commodities in WB is unusually lower than the corresponding fi gures in AP, most probably owing to informalisation and thereby under-reporting. A more vibrant informal sector with a signifi cant gap in rate of return to investments relative to the formal sector may induce fi rms to litigate against the govern-ment and cause delays in tax payments with subsequent fa-vour from a negotiating government. Marjit, Mitra and Mehta (2015) argue that WB possibly suffers from such a malady.
Another aspect one should look at is the general consump-tion pattern of the state and inter-temporal behaviour. It is possible that WB is generally conservative in terms of con-sumption behaviour within and across time periods as con-sumption pattern need not be homogeneous. Also, if one state prefers to save more than the other, generally the current con-sumption levels will be lower. But that will not explain perma-nent downsizing of tax collection.
4 Conclusions
Poor fi scal performance of WB has been a cause for concern for many years now. Despite having a mid-level per capita income and a satisfactory growth of income, WB performed miserably in terms of own tax effort and this has created all the problems related to government fi nance in the state. In this paper we attempted to understand the root causes of WB’s poor own tax effort by comparing its revenue-generating performance with that of AP. We argue that any analysis of tax effort of subnational governments in India should be based on con-sumption and savings data as state taxes are mostly related to consumption rather than income. We have considered different important components of WB’s OTR and compared them with that of AP to understand the actual realisation compared to its potential. Based on our exercise we argue that a portion of WB’s underperformance in OTR generation can be explained in terms of its consumption behaviour. Comparison of deposit data of the two states also suggests that relatively high savings in WB could be behind poor tax collection as well. Per capita consumption of some commodities, which are very important from the point of view of tax collection, is strangely lower in WB than the corresponding fi gures in AP. Given this backdrop, future research should study the relationship between informality and tax collection, and general consumption propensities more closely.
Table 17: Size of the Economy and Consumption/Use of Some Important Commodities West Bengal Andhra Pradesh
GSDP current price (2011–12) (in Rs crore) 5,38,209 6,62,592
Per capita income (current price) (2011–12) 55,222 68,970
Per capita sale of petro products in kg (2011–12) 64.9 124.5
No of registered vehicles (avg in Lakh) (2010–11) 32.6 101.9
Total electricity sold (gWh) (2008–09) 27,779 54,241
Per capita electricity consumption (kWh) (2008–09) 442.5 928.2
Per capita yearly alcohol consumption (Rs) (2011–12) 430.8 957.8
Source: CSO, Ministry of Petroleum and Natural Gas, Road Transport Year Books and Central Electricity Authority, Ministry of Power, Government of India.
Notes
1 Tax-GDP is the most commonly used measure of tax effort for cross-country tax comparison. For more on this issue, see Pessino and Fenochi-etto (2010), Lotz et al (1967) and Le et al (2012). For a subnational level analysis, see Sen (1997).
2 For details, one can see MicroSave (2011).
References
Datta, D (2010): “West Bengal Government Finances: A Critical Look,” Economic & Political Weekly, Vol 45, No 44–45, pp 99–105.
Le, M T, B Moreno-Dodson and N Bayraktar (2012): “Tax Capacity and Tax Effort: Extended Cross-Country Analysis from 1994 to 2009,” Policy
Research Working Paper (WPS6252), World Bank.
Lotz, J and E R Morss (1967): “Measuring ‘Tax Effort’ in Developing Countries,” Staff Papers (International Monetary Fund), Vol 14, No 3, pp 478–99.
Kolmar, M, S Marjit and V Mukherjee (2006): “Pov-erty, Taxation and Governance,” Journal of In-ternational Trade and Economic Development, Vol 15, No 3, pp 325–33.
Marjit, S, S Mitra and S Mehta (2015): “Strategic Litigation: A Study of Sales Tax in West Bengal,” Mimeo, CTRPFP.
MicroSave (2011): Deposit Assessment in India, International Finance Corporation, World Bank Group.
NSSO (2013): Key Indicators of Household Consumer Expenditure in India, National Sample Survey Offi ce, New Delhi: Ministry of Statistics and Pro-gramme Implementation, retrieved 10 January 2015, http://mospi.nic.in/Mospi_N ew/Admin/publication.aspx.
Pessino, C and R Fenochietto (2010): “Determin-ing Countries’ Tax Effort,” Hacienda Pública Española/Revista de Economía Pública, Vol 195, No 4, pp 61–68.
Sarkar, A (2006): “Political Economy of West Bengal,” Economic & Political Weekly, Vol 41, No 4, pp 341 –48.
Sen, T (1997): “Relative Tax Effort by Indian States,” Working Paper No 5, National Institute of Public Finance and Policy, New Delhi.
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Coastal Ballads and Conservation IronicUnderstanding Implementation Slippages of the CRZ Law
Amita Singh
Amita Singh ([email protected]) teaches at the Centre for the Study of Law and Governance, Jawaharlal Nehru University, New Delhi.
The gap which is created due to state failure in acting as
a custodian of “environmental resources” has placed the
judiciary in a powerful position and given it colossal
freedom while interpreting the coastal zone regulations.
This has weakened the spirit of law and reduced the
scope and effectiveness of regular administrative
agencies expected to implement the law and
conservation requirements. This paper highlights that
any wavering in implementing the coastal regulation
zone law will make areas in the vicinity of waterbodies
vulnerable to disasters.
The passage and progress of the coastal regulation zone (CRZ) law from 1991 has involved a number of environ-mental and developmental challenges. This law applies to
the conservation of fragile ecology and ecosystems surrounding all waterbodies such as rivers, creeks, lagoons, estuaries, coral reefs, mangroves, swamps and backwaters. Asking environ-mentalists of the stature of Madhav Gadgil and K Kasturirangan to prepare reports on the Western Ghats and then succumbing to populist resistance which followed against their recommen-dations suggests a need to raise a question before expanding development into fragile ecozones: can the fragile ecology of riverbeds and coasts be preserved without substantive land use restrictions over them?
This paper fi nds answers to this question and demonstrates that the state’s failure in acting as a custodian of “environmen-tal resources” has placed the judiciary in a powerful position and given it colossal freedom in interpreting the coastal zone regulations. This has weakened the spirit of law by reducing the scope and effectiveness of regular administrative agencies expected to implement the law and conservation require-ments. In conclusion, this paper highlights that any wavering on implementing the CRZ law will make areas close to waterbodies vulnerable to disasters amounting to huge socio-economic destruction and loss of lives.
Coastal Zone Land and Riverbed
The coastal zone land is an area from the low tide line (LTL) in the seawaters to the point where the seawater reaches during high tides. This covers the land around rivers, creeks, lagoons, estuaries, coral reefs, mangroves, swamps and backwaters which are affected by tidal action. Coastal zones provide and sustain diverse ecosystems which produce goods and services. Such services cannot be substituted even by the best of government provisions.
The United Nations Millennium Ecosystem Assessment Report of 2005 gives a detailed study of the value of these goods and services to human beings. In a 1993 writ petition (decided in 1996), the Indian Council for Enviro-legal Action raised a grievance against the central government for not enforcing the implementation of coastal zone regulations by state govern-ments leading to “continued degradation of ecology in the coast-al areas” (Indian Council of Enviro-Legal Action v Union of India and Others 1996). During the deliberations, the writ petition also challenged the validity of the 1994 notifi cation which sought to amend and “defeat the intent of the main 1991 Notifi cation.”
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Following this, the Supreme Court directed the states to set up the state coastal zone management authorities (CZMA), which would formulate the coastal zone management plan (CZMP) to implement coastal zone regulations. This directive from the Court demonstrated that this land area of coasts and riverbeds was different from the rest of the district land area and is governed by a different set of rules. It also indicated that the special and exclusive attention this land area requires may not be within the capacity of district land monitoring and de-velopmental agencies like the district town and country plan-ner or the municipal corporation. States were monitored for compliance and the chief secretaries of the non-compliant states were issued notices to explain and show cause. This strict action by the Supreme Court led the states to activate conservation efforts in the CRZs.
The riverbed area has been a politically contested zone. From a more legitimate understanding emerging1 in the issues raised by Justice Gita Mittal in the Case of Commonwealth Games Vil-lage (Vinod Kumar Jain v Uoi & Ors 2007 and Rajendra Singh & Ors v Government of Delhi & Ors 2007) in 2009 which said,
The river, riverbed, river basin, the fl ood plain of the river is not with-in the meaning of the expression land and consequently its change of user is not permissible.
The learned judge referred to earlier orders2 of May 2005 and 2003 to emphasise that “river Yamuna its bed, basin and fl ood plain is a waterbody, is not land and can be utilised only as a water body.” However, in 2009, a three-judge Supreme Court bench of Justices B S Chauhan, K G Balakrishnan and P Sathasivam reversed this normative and ecological under-standing to a new institutional explanation quoting scientifi c literature and global expressions which do not treat riverbed as a waterbody, but as land which can be constructed upon.
Similar fuzziness has been created when builders started occupying biodiversity-rich spaces of backwaters for cons-tructing holiday resorts, etc. There is no mandatory ecological and sensitisation training of judges and bureaucracy managing environment as they advance in their institutional hierarchy, consequently restricting the scope for ensuring an environ-mentally sound and sustainable development in the country.
Land Use in Fragile Areas
The protection of fragile3 ecology of riverbeds and coastal zones creates indispensability of land use restrictions. The National Centre for Sustainable Coastal Management (NCSCM) which comes under the Union Ministry of Environment, Forest and Climate Change (MoEFCC) recently concluded a study on India’s coastal zones to highlight that in the last 50 years more than 40% of the coastal area has eroded.4 Repeated and fre-quent climate change-related disasters in the form of fl oods, hurricanes, cloudburst and landslides have increased ecologi-cal and environmental vulnerability, which when coupled with an incessant, ambitious and unregulated urbanisation destroys sustainable ecosystems forever. Most waterbodies such as lakes, ponds and underground aquifers have become garbage dumps, construction sites or golf courses. However, this serious policy failure has repeatedly been ignored and the
rejection of the Gadgil Committee Report on Western Ghats only adds up to the list.
The need for land use restrictions around coasts, rivers and other waterbodies led to the Coastal Regulation Zone Notifi -cation 1991. In exercise of the powers conferred by Clause (d) of sub-rule (3) of Rule 5 of the Environment (Protection) Rules 1986, the central government declared the coastal stretches of seas, bays, estuaries, creeks and backwaters which were infl uenced by tidal action (in the landward side) up to 500 metres (m) from the high tide line (HTL)5 and the land between the HTL and the LTL as the CRZ, and imposed restric-tions on its use for setting up industries and other operations. An incremental approach was used to restrict the use of a ctivities on the landward side of the HTL.
The regulation of activities over land was ensured through a fourfold classifi cation of CRZ. These were CRZ–1, CRZ–2, CRZ–3 and CRZ–4. The notifi cation further added that no construc-tion (including temporary constructions and fencing or such other barriers) would be permitted within 200 m (in the land-ward side) from the HTL and also within the area between LTL and HTL. This area is designated as a “No Development Zone” (NDZ).6 The coming of NDZ brought down the guillotine over hoteliers and industrialists who had become more ambitious due to the global fl ow of capital and professionals into India. Therefore, amendments to the CRZ Notifi cation in 1994 ex-empted new construction and developmental activities in NDZ. The notifi cation also reduced distance from 100 m of HTL to 50 m. If this was allowed to move further, it would have caused massive devastation, but due to an alert and timely petition in the Supreme Court by the Indian Council of Enviro-Legal Action v Union of India and Others (1996) this legal overreach was immediately struck down.
The 1991 Notifi cation has, however, regulated land use for developmental activities up to 500 m from the HTL on the landward side. Annexure I to the notifi cation deals with coastal area classifi cation and development regulations, but it also in-vokes attention to fragile ecology of these coasts as in the case concerning Vembanad Backwater (Ratheesh and Others v State of Kerala and Others 2011) adjoining Vettila Thuruthu and con-nected lagoons and fi ltration ponds in which the Kerala High Court referred to the area as the critical vulnerable coastal area (CVCA). This generated increased attention of courts to-wards land utilisation restrictions for larger public good.
The biggest hurdle which courts encountered in imposing land use restrictions came from an argument on the loss of livelihood. The CRZ is an area which generates livelihood to local inhabitants by providing goods and services to the whole region. This area is like common property resources of villages which provide free ecosystem services benefi ting the poorest of the poor who by all means is surviving in close proximity to nature. Some of the estimates emerging to calculate the cost of ecosystem services have stupefi ed those who thought it was a freebee asset. Costanza et al (1997: 253) estimated:
The current economic value of 17 ecosystem services for 16 biomes, based on published studies and a few original calculations. For the entire biosphere, the value (most of which is outside the market) is
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estimated to be in the range of US$16–54 trillion (1,012) per year, with an average of US$33 trillion per year. Because of the nature of the un-certainties, this must be considered a minimum estimate. Global gross national product total is around US$18 trillion per year.
Thus, when Constanza and his colleagues attempted to cal-culate the price of ecosystem services, they reckoned it was almost the double of the total world economic output. More recently in 2012, John Dearing et al have highlighted the dele-terious effects of human-induced land use and land cover changes leading to the transformation of landscapes and loss of biodiversity and environmental balance. The study strongly demands a strong action against unchecked development.
The Twelfth Five-Year Plan’s objective of investing in the prevention and mitigation of environmental disasters with a focus upon resilience building of ecologically fragile and envi-ronmentally-sensitive regions suggests a step in recognising the vulnerability of local populations. Communities such as fi sherfolks, sabai grass workers, forest or mountain tribes, who live in ecologically-sensitive areas, are becoming increasingly vulnerable due to intrusive development and defi ant construc-tions in their areas. The need for livelihood security gets linked to conservation in Para 1 of CRZ Notifi cation 2011 where reference has been made to the subsection (1) and clause (v) of subsection (2) of the Environment (Protection) Act 1986, through which the central government has been conferred the responsibility of ensuring sustainable livelihood security to fi sher communities and other local communities living in the coastal areas. In doing so, it legitimately imposes many land use restrictions such as the setting up or expansion of industries, operations or processed and manufacture or handling or storage or disposal of hazardous substances as specifi ed in Hazardous Substances (Handling, Management and Trans-boundary Movement) Rules 2009 or any construction activity. In many instances the Supreme Court has even set aside high court permissions for constructions which violated the CRZ con-ditions for land use diversion7 and appointed expert commit-tees to prepare an integrated island management plan for an appropriate and sustainable development of the area.
Environmental degradation is a violation of the fundamen-tal right to life under Article 21 of the Constitution. On several occasions since its most explicit approval in the Dehradun Quarrying Case (Dehradun Quarrying Case Rural Litigation and Entitlement Kendra v State of UP 1988) even the judiciary has admitted that the right to a wholesome environment is indispensable for sustainable human well-being. This has subsequently featured through the judgments delivered in the famous Oleum Gas Leak Case (M C Mehta v Union of India 1987), Arvind Textiles v State of Rajasthan 1994, AP Pollution Control Board v Prof M V Nayudu (Retd) and Others 1999), etc. Thus, environmental protection in an eco-sensitive region like backwaters means heightened responsibility for both the central and state governments.
The CRZs protect and sustain livelihood as much as the coastal ecosystems do. The National Fishworkers Forum (NFF) can rightfully be described as the progenitors of this conserva-tion milestone. Distressed with depleting fi sh catch due to
industrial, oil and sewage pollution added to ambitious dredg-ing and reclamation activities, the NFF marched through Kan-yakumari in 1989 demanding pollution-free coasts. Their slo-gan was “protect water and protect life” as they highlighted the link between all waterbodies from the sea to the lakes and rivers. It was then that the government responded by bringing in the 1991 CRZ notifi cation. The recent defi ance of CRZ by builders and local authorities has once again brought the NFF to the main stage under a well-coordinated platform of Kerala Swathanthra Matsya Thozhilali Federation. Their slogan all through the fi shing harbour route from Mangaluru to Thiruvananthapuram has been “protect sea, coast, inland waterbodies and fi sh resources.” The value of interlinked waterbodies is better understood now than before.
To recollect the fi ndings of Bittu Sehgal, member of the Coastal Task Force and the founder of India’s premier wildlife magazine Sanctuary, who had indicated that
...land developers around the country are working overtime with state government offi cials to encash literally thousands of crores of rupees worth of public lands. There is a similar move afoot for forests lands and together the attack on coastal belts and forest belts will alter the survival ecology of over 300 million people within the next three to fi ve years. To my mind this represents a more serious threat than any other development project or anti-people initiatives ever initiated on the Indian subcontinent in the past 50 years.8
Inconsistent Judicial Interpretation
Fragile ecosystems of waterbodies have not been appropriately located in many judgments delivered in the last two decades. The approach towards CRZ law has been inconsistent and has led to incomplete resolutions to the problem of fragility at river-beds and coasts. As James Huffman (2008: 8) says: “In a sense, the widespread misrepresentation of the history of the public trust doctrine is apt because the lawmakers themselves often have been party to the distortions.” Whenever these contesta-tions are pulled into the courtroom, there are claims and counter-claims on the nature of ecosystems, state responsibility and rights of local people. There is enormous disparity in legal claims presented before the judges in interpreting both the “resource” as well as “public welfare” on different occasions.
Inconsistent judicial interpretations can be demonstrated to swirl around three pillars: the CRZ land use restrictions, public trust doctrine and the irresponsible and unaccountable gov-ernance institutions. In the CRZ land use restrictions judges have sought various defi nitions for defi ning coasts and land use diversions. At times, courts have diverted the onus of decision-making to the Coastal Zone Management Act (CZMA) (P A Fazal Gafoor v State of Kerala Special Leave to Appeal (Civil) 2003) and in some cases have allowed CRZ violation (Goa Foundation v Diksha Holdings Pvt Ltd 2001).
On the issue of land reclamation, the Kerala High Court did not fi nd any serious impairment to aquatic resources, ecology and environment in the land reclamation demanded by the Goshree Project (Jacob Vadakkancherry and, etc v The State of Kerala and Ors 1998) and even declared that the land pro-posed does not come under the CRZ area. The judiciary has even interpreted land reclamation in different ways as well. In
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the case of the Institute of Social Welfare v State of Kerala (1996) only such land reclamation as would disturb the natu-ral course of seawater was prohibited and the court even in-sisted that any neglect of the aforesaid interpretation may lead to unregulated constructions of various kinds.
However, two years later, the court applied a relatively liberal interpretation to the above decision and allowed Goshree project to reclaim 25 hectares (ha) of land near Marine Drive at Kochi. This leads the courts to incline towards soft decisions and dismiss clear action as was initiated by Justice A V Ramakrishna Pillai9 when he ordered the demoli-tion of the buildings which encroached upon backwaters. Also, it was only after the country’s top accountability body, the Comptroller and Auditor General (CAG) exposed the defi ance of coastal zone regulations by builders that government bodies and the courts sprung into action.
There is a need for revisiting regulations which address land use around coastal and catchment zones. The funda mental guiding principle to coastal conservation is best expressed by Justice A V Ramakrishna Pillai, who ordered demolition of DLF construction around Chilavannoor Backwaters in Ernakulam, “Nature, which is the property of the nation, cannot be allowed to be scrambled by a minority violating all laws.”10
Ironically, the division bench of Kerala High Court comprising Justice Thottathil B Radhakrishnan and Justice Babu Mathew P Joseph passed the order granting a three months stay on an appeal fi led by the DLF (Deccan Chronicle 2014) against the single bench order and granted a three-month stay to demolish DLF apartment complex for violating the CRZ notifi cations. As the CRZ law applies equally to the riverbed and catchment zones, one could bring in the battle over the Yamuna riverbed for the construction of the Commonwealth Games Village in 2010. The controversy on the construction was actually whether it was on a riverbed or not. It became an argument for allow-ing the construction. As mentioned in the previous section, while a number of judgments treat riverbed as a waterbody which cannot be used for construction, a Supreme Court bench headed by the chief justice himself declared the river-bed as “land,” and therefore, open for construction.
The doctrine of public trust is a symbolic, but logically explainable understanding between the state and citizens under natural law. The Supreme Court in M C Mehta v Kamal Nath and Others (1997) enunciated the doctrine of “public trust” the theoretical thrust of which was elaborated as certain common properties such as rivers, seashores, forests and the air are held by the government in trusteeship for their free and unimpeded use by the general public. Following the judgment in the above case, the state and high court shall endeavour to protect and improve the environment (Vishunu Moor v Visha khapatnam Urban Deve lopment Authority 2002).
Much of this law gets guided through Articles 48A and 51A inserted in Part IV of the Constitution through the 42 Constitutional Amendment Act 1976. While the former places a responsibility upon the state, the latter emphasises citizens’ duty to protect environment. An important but crisp message which comes out of the doctrine of public trust is to reject and
condemn private ownership of environmental resources as a complete defi ance of natural justice. This suggests that forests, waterbodies and air belong to people and the state is merely a custodian of this “people’s property” as a trustee. Writing on the relationship of public trust doctrine with environmental conservation, Joseph Sax (1970: 164) suggests that “[o]ur con-temporary concerns about ‘the environment’ bear a very close conceptual relationship to this venerable legal doctrine of p ublic trust.” It is primarily due to the doctrine of public trust that courts tend to recognise the doctrine of legitimate expec-tation.11 In Sethi Auto Service Station & Another v Delhi Development Authority & Others (2006), whereby the govern-ment is expected to demonstrate some form of a regularity, predictability and an assurance rather than a drastic turna-round from an expected procedural and substantive system of functioning. It is an unwritten code of a standard state behaviour which the citizen expects from it.
Too Many Cooks
The governance of CRZ has been disfi gured due to the presence of multiple administrative authorities and each being “not responsible” or waiting for some other department to take a stand on an issue. There are many decision-makers on CRZ such as the MoEFCC, Kerala Coastal Zone Management Autho-rity (KCZMA), State-Level Environment Impact Assessment Au-thority (SEIAA), State Expert Appraisal Committee (SEAC), Port Trust (PT), Kerala Fisheries Department (KFD) and the muni-cipal corporation. On 3 November 2011, in exercise of the pow-ers conferred by subsection (3) of Section 3 of the Environment (Protection) Act 1986 (29 of 1986) and in pursuance of the Gov-ernment of India in the Ministry of Environment and Forests,12 the central government constituted SEIAA and SEAC in Kerala. On the one hand there are overlapping jurisdictions of central and state governments, while on the other end, hierarchies of state agencies and departments. Additionally, an inappropriate standardisation of jurisdictional boundaries and a loose time frame without clear penal action have dispersed norms of ac-countability within the whole state’s administrative framework.
Justice Ramakrishna Pillai’s demolition orders on DLF en-croachments over Chilavannoor road, Ernakulam Backwaters highlight the administrative quagmire as well as their lethargy. The builders found ample negotiating space to obtain all clear-ances for construction in the CRZ. The town planning standing committee made the city corporation issue permits but even where these permits, approvals and occupancy certifi cates were not given, a basic requirement to obtain electricity connection, all buildings (even the seven and 20-storied apartments) were found lit with electricity and working elevators.
Three Major Deficits of Governance
Case Study of the Kerala Backwaters Case 2014
(1) Accountability for Grant of Clearances Was Not Fixed: The process for approval is tough which begins with the municipal corporation allocating land for construction. The
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KCZMA is then given to approve the plan through environmental clearances from the Ministry of Environment and Forests. The departments of district development commissioners and dis-trict planning offi cers are part of the urban local body which gives environmental clearances to projects in CRZ areas.
(2) Monitoring and Reporting Agencies Have No Power to Stop Non-compliant Projects Immediately: The urban local body as part of district administration and town and country planning failed to enforce land use and municipal laws, building structural plans and fl oor-size regulations. The Vigilance and Anti-corruption Bureau (VACB) made surprise raids at the construc-tion sites of 10 municipalities only after CAG reported violations in its report. When the corporation sent notices to some of them it was more a ritual administrative exercise to be on the right side of law rather than any commitment to stop illegal construction.
(3) Lack of Respect for Internal Procedures and Environ-mental Impact Assesment: In most of the violations it was found that the municipal corporation gave permission for con-struction without addressing and insisting on the need for obtaining even the required mandatory approvals from the CZMA and the MOEFCC. The CZMA later informed the corpora-tion about the ongoing construction in 13 buildings, but the corporation sent notices to only one construction company to stop work. The role of the corporation secretary also vacillated between different options. The electricity board overlooked the mandatory requirement of possessing occupancy certifi -cates from municipal corporations for obtaining electricity connections for the buildings.
For coastal and catchment zone protection, there are three major statutory bodies managing encroachments, fi rst the state CZMA, second the SEIAA and third the SEAC. Questions about their relationship with each other and their coordination with other statutory bodies, that is, the district town and country planning department, State Industrial Corporation, the Urban Development Authority and most of all the local panchayat authorities have become increasingly unaccountable. This some-times leads fragile regions into greater vulnerability. A recent transdisciplinary research (Auerbach et al 2015: 1–5) by scholars from social sciences and earth sciences have revealed that much of what administrators do in preventing fl oods and envi-ronmental conservation actually exacerbates these conditions and has even been leading to sea level rise and fl ooding.
Addressing the Overload of CZMA
The CZMA has been created by the central government under the powers conferred through subsections (1) and (3) of Sec-tion 3 of the Environment (Protection) Act 1986. Its mandate is as wide as stretching from livelihood security to disaster risk reduction policies:
...in exercise of the powers conferred by sub-section (1) and clause (v) of subsection (2) of section 3 of the Environment (Protection) Act 1986 (29 of 1986), the Central Government, with a view to ensure livelihood security to the fi sher communities and other local communities, living in the coastal areas, to conserve and protect coastal stretches, its unique environment and its marine area and to promote development through
sustainable manner based on scientifi c principles taking into account the dangers of natural hazards in the coastal areas, sea level rise due to global warming, does hereby, declare the coastal stretches of the coun-try and the water area up to its territorial water limit, excluding the islands of Andaman and Nicobar and Lakshadweep and the marine areas surrounding these islands up to its territorial limit, as Coastal Regulation Zone (hereinafter referred to as the CRZ) and restricts the setting up and expansion of any industry, operations or processes and manufacture or handling or storage or disposal of hazardous substanc-es as specifi ed in the Hazardous Substances (Handling, Management and Transboundary Movement) Rules, 2009 in the aforesaid CRZ.
The principal secretaries and secretaries from the key state departments such as science and technology, revenue, local self-government, fi sheries, environment and industries, etc, are ap-pointed as members for the tenure of three years. Members are not “just anyone” representing that particular department of the state government, but are selected because they are heading these departments, which makes all the difference in CRZ imple-mentation. By virtue of being the head of their own department, the additional charge of CZMA brings an overload of additional responsibilities. These additional and also secondary assign-ments are often treated as avoidable beyond attending meetings called by the member secretary from time to time. Most member secretaries crib about the diffi culties of getting everyone togeth-er and also getting everyone to rise above the narrow depart-mental boundaries and for lack of expected homework from each one of them on a case to case basis mentioned in the agen-da. Most of these secretaries get transferred much before com-pleting the tenure for three years and the next incumbent is not completely aware of the sensitivity of most projects outside the regular departmental responsibilities. Moreover, the unsaid ten-sion which rips apart any committed administrative action is the lack of attention the new incumbent gives to the decisions and projects attended to by the previous one.
Conclusions
The law of conservation is not weak. What makes it weak is the combination of the failure of state leadership, administra-tive and judicial corruption and ecological awareness. There are many factors which prevent sensitisation, resonance and rigour in environmental governance. The most important one is the need for public feedback (and the application of audi al-teram partem rule to expect all parties to be heard appropri-ately before taking a decision) and a regular supervisory and evaluation committee which can best be arranged through the MoEFCC. In the case of protecting CRZ of Kerala backwaters, Justice A V Ramakrishna Pillai had observed in Antony A V v Corporation of Cochin (2012).
The purpose of these laws is to preserve nature for posterity. If the violation of the laws is allowed to become the order of the day, the existence of life would be at peril. Right to life guaranteed by the Constitution takes innumerable rights, including the right to enjoy nature in the present form. Indiscriminate invasion of nature to the detriment of others is an invasion of right to life.
All this could be achieved if public institutions perform as custodians of the trust property rather than agents of its destructions and a cause for disasters.
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Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 75
Notes
1 Writ petition order dated 3 May 2005 in Court on Its Own Motion v UoI & Ors (2004); writ peti-tion order dated 31 March 2003 in Resident’s Welfare Association v UoI & Ors (2003).
2 Writ petition order in Court on Its Own Motion v UoI & Ors (2004). dated 3 May 2005 and writ petition order in Resident’s Welfare Associa-tion v UoI & Ors (2003), dated 31 March 2003.
3 See New Indian Express (2015) and see the Study of Coastal Zones National Centre for Sustainable Coastal Management which says, “India has 7,500 km coastline (~5,400 km on the mainland) and about 250 million people live within 50 km distance from the shore. In-dia’s mainland coastal stretch of 5,422 km has undergone tremendous changes due to varying natural and human induced coastal activities,” available at:http://ncscm.org/cms/geo/pdf/research/High%20resolution%20 Erosion.pdf.
4 Deccan Chronicle (2015) and Ramesh et al (2011). 5 The line on the land up to which, the highest
water line reaches during the spring tide. 6 Inserted by SO 550 (E) dated 21 May 2002, vide
Gazette of India (Extra), No 470. 7 See cases Union Territory of Lakshadweep v
Seashells Beach Resort 2012; Union of India v Chennai Metropolitan Development Authority 2006; Piedade Filomena v State of Goa 2004.
8 In correspondence with Vishvanath Anand, additional secretary at the Ministry of Environ-ment and Forests in 1998.
9 Antony A V v Corporation of Cochin (2012) WP(C), No 27248 of 2012 (E), High Court of Ker-ala, Antony A V v Corporation of Cochin (2009).
10 Justice Radhakrishna Pillai in Antony A V v Corporation of Cochin (2012), in the High Court of Kerala. Judgment of 8 December 2014, “Indiscriminate invasion of nature to the detri-ment of others is an invasion of right to life. Nature which is the property of the nation can-not be allowed to be scrambled by a minority violating all laws” (para 27).
11 In M/S Sethi Auto Service Station & ANR v Delhi Development Authority & Ors Civil Appeal, the court observed that this doctrine of legitimate expectation was at the root of the constitutional principle of the Rule of Law.
12 Notifi cation No SO 1533 (E), dated 14 Septem-ber 2006.
References
A P Pollution Control Board v Prof M V Nayudu (Retd) and Others (1999): AIR 1999, SC 812.
Antony A V v Corporation of Cochin (2012): WP(C), No 27248 of 2012 (E).
Arvind Textiles v State of Rajasthan and Ors (1994): AIR 1994, Raj 195, 1994(1), WLN 66.
Auerbach, L W, S L Goodbred Jr, D R Mondal, C A Wilson, K R Ahmed, K Roy, M S Steckler, C Small, J M Gilligan and B A Ackerly (2015): “Flood Risk of Natural and Embanked Land-scapes on the Ganges–Brahmaputra Tidal Delta Plain,” Nature Climate Change, 5 January, pp 1–5, available at:http://www.nature.com/nclimate /journal/v5/n2/full/nclimate2472.html.
Costanza, Roberts, Arge, Ralph C d’Arge, Rudolf de Groot, Stephen Farber, Monica Grasso, Bruce Hannon, Karin Limburg, Shahid Naeem, Rob-ert O’Neill, Jose Paruelo, Robert G Raskin, Paul Sutton, and Marjan van denBelt (1997): “Total Value of the World’s Ecosystem Services and Natural Capital,” Nature, Vol 387, 15 May.
Court on Its Own Motion v UoI & Ors (2004): WP(C), No 689/2004.
Dearing, J, X Yang, X Dong, E Zhang, X Chen, P G Langdon, K Zhang, W Zhang and T P Dawson (2012): “Extending the Timescale and Range of Ecosystem Services through Paleo-environmental Analyses: The Example of the Lower Yangtze Basin,” proceedings of the National Academy of Sciences, available at: http://www.pnas.org /content/109/18/E1111.full.
Deccan Chronicle (2014): “Three Month Stay on Order to Demolish DLF Flat,” 21 December.
— (2015): “Indian Coastline Rapidly Eroding,” Chennai edition, 28 January.
Goa Foundation v Diksha Holdings Pvt Ltd (2001): (2) SCC, 97=AIR, 2001, SC 184.
Huffman, James (2008): “Speaking of Inconvenient Truths: A History of the Public Trust Doctrine,” Duke Environmental Law & Policy, Vol 18: 1, Durham: Duke University.
Indian Council of Enviro-Legal Action v Union of India and Others (1993): Writ Petition (WP)(C) No 664 of 1993, 18 April 1996 (Coastal Zone Case).
Institute of Social Welfare v State (1996): (1) KLT 718 = AIR 1997, Ker 45 = ILR 1996 (3), Kerala 114.
Jacob Vadakkancherry and Etc v The State of Kerala and Ors (1998): AIR 1998, Ker 114 F B.
M C Mehta v Union of India (1987): AIR 1987, SC 1086.
M C Mehta v Kamal Nath & Ors (1997): 1 SCC, 388. M/S Sethi Auto Service Station & ANR v Delhi Devel-
opment Authority & Ors Civil Appeal (2008): No 6143 of 2008 (Arising out of SLP © No 10230 of 2006), 1 SCC 18.
New Indian Express (2015): “Deltas Sinking and Shrinking as Dams Curb Steady Flow of Fresh Water to the Coasts,” New Indian Express, 28 January.
P A Fazal Gafoor v State of Kerala Special Leave to Appeal (Civil) (2003): No 5038/2002, 25 April.
Piedade Filomena Gonsives v State of Goa (2004): AIR 2004, SC 3112: (2004)3, SCC 445: 2004 AIRSCW 2302: 2004(4), Bomb CR 719): 2004(2) Supreme 484: 2004(3), SCALE 369.
Rajendra Singh & Ors v Government of Delhi & Ors (2007): WP(C) No 7506/2007.
Ramesh, R, R Purvaja, A Senthil Vel (2011): “National Assessment of Shoreline Change: Puducherry Coast, National Centre for Sustai-nable Coastal Management/MoEF Report 2011–01,” p 57, retrieved from: http://www. nc-scm.org/reports.php.
Ratheesh and Others v State of Kerala and Others (2011): WP(C), No 19564/11 decided on 25 July 2013.
Resident’s Welfare Association v UoI & Ors (2003): WP(C) No 8227/2002. Indian Council of Enviro-Legal Action v Union of India & Others 1996(4), JT SC 263.
Rural Litigation and Entitlement Kendra, Dehradun v State of Uttar Pradesh (1988): AIR 1988, SC 2187.
Sax, Joseph L (1970): “The Public Trust Doctrine in Natural Resource Law, Effective Judicial Inter-vention,” Michigan Law Review, Vol 68: 471, January.
Union of India v Chennai Metropolitan Development Authority (2006): (4) KLT, SN 117, p 84, 2006 (4), CTC 460.
Union Territory of Lakshadweep v Seashells Beach Resort (2012): AIR 2012, SC 2309: 2012(6), SCC 136: 2012 AIRSCW 3343.
Vinod Kumar Jain v UoI & Ors (2007): WP(C) 6729/2007.
Vishnu Mor v Visakhapatnam Urban Development (2002): 28 March 2002 (4), ALT 746.
Review of Women’s StudiesOctober 31, 2015
Rethinking Violence – Mary E JohnLocating ‘Hyderabad for Feminism’ in the Present Struggle against Violence – Tejaswini Madabhushi, Maranatha Grace T Wahlang, Gitanjali JoshuaRape as Atrocity in Contemporary Haryana – Women against Sexual Violence and State Repression Reporting Sexual Violence in India: What Has Changed since the Delhi Gang Rape? – Divya Arya Gathering Steam: Organising Strategies of the Indian Men’s Rights Movement – Srimati BasuProtection of Women from Domestic Violence – Flavia Agnes, Audrey D’MelloSome Thoughts on Extreme Violence and the Imagination – V Geetha
For copies, write to: Circulation Manager,
Economic and Political Weekly,320–321, A to Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013.
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NOTES
febrUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly76
High Returns from Higher EducationEffect on Agricultural Income
Kshitij Awasthi, Kiran K Bhat
Kshitij Awasthi ([email protected]) is a doctoral student at Corporate Strategy and Policy Area, Indian Institute of Management Bangalore. Kiran K Bhat ([email protected]) is a doctoral student, Production and Operations Management Area, IIM-B, Bengaluru.
Education has been a key government policy to drive economic empowerment in rural India. However, evidence on returns to education has been mixed. Research has measured education as school enrolments while overlooking completed education. There has been hardly any attempt to see beyond schooling to look at returns to higher education. Here, we test returns to higher education in rural areas, correlating it with agricultural productivity. The results show a steep rise in returns to higher education after the higher secondary level. The corresponding policy implications are also discussed.
Education is one of the top areas of focus for societal upliftment in most developing economies. In
India, policies have been in force for the promotion of primary education (and secondary also in some states) through various schemes like Sarva Shiksha Ab h iyan and Mid-day Meal. In rural areas, promoting basic education is expected to lead to better quality of life and economic empowerment. Similarly, for hig her levels of education, there should be, arguably, even higher benefi ts. For a farmer, this relation between education and economic development should refl ect in improved agricultural producti vity. In this article we measure the returns on higher edu-cation through agricultural productivity and our results suggest superior returns from higher education in terms of agri-cultural productivity.
Literature Review
The fi rst question about education as a policy is—why i s it important? Edu-cation “enhances one’s ability to receive, decode, and understand information” (Nelson and Phelps 1966: 69) and is therefore required for improving work effi ciency. The government’s objective is to promote education usually as an investment good. However, according to Welch (1970), education should also be counted as a “production factor” not just as public investment (Welch 1970: 35). Elaborating further on benefi ts of this production, he posited that it can add productive value in two broad ways—“worker effect” and “allocative effect.” The worker effect refers to the pheno-menon where “increased education simply may permit a worker to accomplish more with the resources at hand” (Welch 1970: 42). While the allocative
effect refers to a phenomenon where increased education “may enhance a worker’s ability to acquire and decode information about costs and productive characteristics of other inputs” (Welch 1970: 42). Discussing the relevance of worker and allocative effects, Reimers and Klasen (2011) argue that farmer’s education enhances production effi ciency primarily due to the latter (Reimers and Klasen 2011: 4). In the present article, we argue that the mix of allocative effect and worker effect will be skewed more towards worker effect but as soon as years of schooling increases, the wor ker effect will remain constant but the allocative effect will keep on incre-asing. In a nutshell, we propose and test that the agricultural productivity with higher education will be signifi -cantly higher than the agricultural pro-ductivity with primary schooling. Pri-mary education is precisely the area where public policies and even the aca-demic literature has to focus. Through our empirical testing, we attempt to make a case for looking beyond primary education and focusing on higher edu-cation in rural areas.
Data and Analysis
We use the 2005 India Human Devel-opment Survey (IHDS) data for our analysis. The univariate data analysis indicates that college education (gradu-ation) signifi cantly changes the choice of occupation in rural areas and the con-vergence towards salaried work.1 Look-ing more closely, among those who com-pleted Class 12th level of education, the percentage of males and females in the salaried workforce is 36% and 34% respectively. Among those with a gradu-ate/diploma certifi cate, this percentage increases to 60% and 70% respectively. It can be safely assumed that after com-pleting graduation most people tend to move towards urban areas to fi nd a job. However, what happens if such educated individuals were to stay in rural India?
Further, the median agricultural income of a 12th educated person is Rs 12,027 per month, which increases to Rs 17,197 for a graduate/diploma holder, an increase
NOTES
Economic & Political Weekly EPW febrUARY 13, 2016 vol lI no 7 77
of almost 43% (IHDS 2010).2 This implies that returns to rural education for those who chose to involve themselves in rural activities after gra duation increases signifi cantly (Figure 1).
We argue that individuals with hig-her education can bring effi ciency in rural activities (in particular agricul-ture), by virtue of their higher skills, ex-posure to better practices and ability to understand and appreciate the role of technology. This corresponds to the “allocative effect” (Welch 1970) discu-ssed earlier. While univariate analysis of median agricultural income suggests an interesting phenomenon, we further in-vestigate this in a multivariate setting to understand if such a phenomenon, in fact, exists after accounting for impor-tant sources of bias.
Multivariate Analysis
We use “farm income” as the dependent variable while education (number of education years) as our key explanatory variable. The age of the individual and occupation were taken as control vari ables as they might signifi cantly impact the yield/productivity of farms (Moha patra 2011; Pudasaini 1983; Moock 1981; Llewellyn 2011; Jamison and Moock 1984; Cotlear 1986; Chaparro and Allee 1960). We run an ordinary least squares (OLS) regression using IHDS 2004–05 data.
Results
Table 1 presents the summary statistics of the variables. The average annual farm income was Rs 13,418.11. We observe that individuals with 10th, 10+2, and graduate education are about 89%, 6% and 5% respectively, and the literacy rate was about 64%. In the regression Model 1, we consider the years of education and observe that it was found
to be highly signifi cant (Table 2). Literacy had a negative impact as more educated were moving towards other occupations (-25.39) and hence the farm income was observed to be affected by education of individuals.
In Models 2, 3, and 4 (Table 2) we con-sidered the number of years of education less than 10th, 11th–12th, and greater than 12th. The coeffi cients of education for Models 2, 3 and 4 are 258.5, 536.6, and 1,775.5 respectively. This shows that graduates undertaking agricultural activities have a signifi cant increase in agriculture income (almost 586% and
230% respectively) over the other two categories. The overall models were found to be signifi cant.
Discussion and Implications
The extant literature indicates that spread of literacy and education in the farm labour force makes a modest but sustained contribution to agricultural productivity growth (Fuglie 2010; Ad-ams and Bumb 1979; Lio and Liu 2006; Fuglie and Schimmelpfennig 2010). It can be argued that the more a rural in-dividual is educated, the better choice she can make in terms of crops selec-tion, sowing season, preventive action, and best methods in practice. Reimers and Klasen (2013), while discussing the role of education in agricultural produc-tivity, mention farmers becoming “man-agers” by developing “decision-making skills” (Asadullah and Rahman 2009). These decision-making skills, along with better information coming with higher education, can allow farmers to assess risk and returns associated with produc-
tion technology (Asadullah and Rah man 2009) and opt for the one that best suits their requirement. The pro-ductivity improvement leads to higher farm income. However, for this to mate-rialise a basic level of edu-cation is mandatory, as it is indicated by univariate data discussed previously. This level can be equiva-lent to a higher secondary (12th) education in the Indian context.
There are several benefi ts of promoting higher edu-cation in India. The fi rst is the strategic nature of agriculture that makes it imperative to work in this dire ction. Agriculture serves our basic need for food, and India has 1.2 billion people to feed, and it is indeed important to focus on increa sing agricultural productivity. In other words, there is a need to address food security concerns.
Median Agricultural Income
20,000
16,000
12,000
8,000
4,000
0
Figure 1: Agricultural Income Median vis-à-vis Education (Agricultural Income)
Source: IHDS (2010). None 1–4 std 5–9 std 10–11 std 12 std/some college Graduate/diploma
Table 1: Variable Descriptive Statistics Mean Standard Count Deviation
Farm income (Rs/year) 13,418.11 59,161.65 2,15,754
Age (years) 27.34 19.34 2,15,754
Occupation 66.76 23.53 48,477
Literacy (%) 0.64 0.48 2,14,797
Education years (years) 4.67 4.68 2,14,399
Education years <=10 (dummy) 3.55 3.69 1,89,524
Education years 11–12 (dummy) 11.73 0.44 12,987
Education years >12 (dummy) 14.80 0.53 11,888
Table 2: OLS Regression Results of Education on Farm Income 1 2 3 4
Farm Income Farm Income Farm Income Farm Income
Education years 205.6*** (5.14)
Education years <=10 258.5*** (5.00)
Education years 11–12 536.6 (0.50)
Education years >12 1,775.5 (0.86)
Age -16.55 -8.365 -70.67 -98.03 (-1.88) (-1.04) (-1.73) (-1.43) (-4.85) (-5.07) (-0.26) (-1.87)
Literacy -338.0 -611.4 -1,685.5 11,792.7 (-0.86) (-1.52) (-0.19) (0.52)
District Id -9.961 -16.98* 9.979 65.53 (-1.08) (-1.98) (0.27) (1.02)
_cons 6,721.6*** 6,644.2*** 4,404.7 -26,001.6 (11.39) (11.83) (0.28) (-0.68)
N 48,259 41,016 3,062 4,181
t statistics in parentheses. * p < 0.05, ** p < 0.01, *** p < 0.001.
NOTES
febrUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly78
Further, though the contribution of agri-culture in gross domestic product (GDP) is relatively low, the employment pro-vided is much higher than other sectors. It is pertinent to note here that it employs the relatively lower strata of society, so it is in a position to aid in the overall development of the country. Higher education in rural areas has to play a major role in that direction.
A second set of benefi ts arises from the better implementation and utilisation of all the central and state government schemes. A farmer with higher educa-tion will be better placed to understand and gain from policies like credit facili-ties, use of modern knowledge available about agricultural technology, meteoro-logy, etc. Benefi ts of advanced informa-tion and communication technology can be utilised by these individuals. They will be in a better position to tackle the supply-chain hazards like profi teering by middlemen, lack of storage, differ-ence between logistics requirement of different crops. They could use agricul-ture insurance and hedge themselves against adversities. They could also ac-cess markets relatively easily given their superior exposure to the outside world.
These highly educated individuals could unite to have aggregate farming and achieve economies of scale. Further, on the behavioural front, they will be more likely to change conventional but obso-lete methodologies that continue to be employed in the agriculture sector.
Finally, as agriculture becomes more productive and provides returns, more and more educated youth who opt for alternative employment outside agricu-luture might want to choose farming. We have the example of the Western world, particularly the United States, where many educated youth take up farming. Back home, we have Punjab as a case in point.
Conclusions
We attempted, in this article, to demon-strate the improvements a farmer with higher education can bring to agri cultural productivity. From the above analysis, it is clear that policy intervention is needed to develop high-skilled (graduate/diploma holder) rural youth, and utilise their
skills in increasing agriculture and allied activities productivity. In India almost 18% of the GDP comes from agriculture,3 and it is the slowest growing sector, far behind services and manufacturing in terms of growth rates. One of the major reasons that can be attributed to this is-sue is the lack of better technology, know-how about crops, ineffi cient use of government policies like farm subsidies, lack of access to markets, and other key information. All of these issues can be add ressed to a substantial extent if higher education is promoted.
Notes
1 IHDS (2010, Table A.4.3a: p 53).2 IHDS (2010, Table A.3.1a: p 37). 3 “Indian Agriculture Industry: An Overview,”
http://www.ibef.org/industry/agriculture-in-dia.aspx, viewed on 26 December 2014.
References
Adams, John and Balu Bumb (1979): “Determinants of Agricultural Productivity in Rajas than, India: The Impact of Inputs, Technology and Context on Land Productivity,” Economic Development and Cultural Change, Vol 27, No 4, pp 705–22.
Asadullah, M Niaz and Sanzidur Rahman (2009): “Farm Productivity and Effi ciency in Rural Bangladesh: The Role of Education Revisited,” Applied Economics, Vol 41, No 1, pp 17–33.
Chaparro, Alvarro and Ralph H Allee (1960): “Higher Agricultural Education and Social Change in Latin America,” Rural Sociology, Vol 25, No 1, pp 9–25.
Cotlear, Daniel (1986): “Farmer Education and Farm Effi ciency in Peru: The Role of Schooling, Extension Services and Migration,” Education and Training Series Discussion Paper; No EDT 49, The World Bank.
Fuglie, Keith O (2010): “Sources of Growth in Indonesian Agriculture,” Journal of Producti-vity Analysis, Vol 33, No 3, pp 225–40.
Fuglie, Keith and David Schimmelpfennig (2010): “Introduction to the Special Issue on Agricul-tural Productivity Growth: A Closer Look at Large, Developing Countries,” Journal of Pro-ductivity Analysis, Vol 33, No 3, pp 169–72.
IHDS (2010): Human Development in India: Chal-lenges for a Society in Transition, India Human Development Survey, New Delhi: Oxford Uni-versity Press.
Jamison, Dean T and Peter R Moock (1984): “Farmer Education and Farm Effi ciency in Nepal: The Role of Schooling, Extension Services and Cog-nitive Skills,” World Development, Vol 12, No 1, pp 67–86.
Lio, Monchi and Meng–Chun Liu (2006): “ICT and Agricultural Productivity: Evidence from Cross-country Data,” Agricultural Economics, Vol 34, No 3, pp 221–28.
Llewellyn, David (2011): “Higher Level Skills for Food Security: Do We Have the Right Ingredi-ents?” Journal of Farm Management, Vol 14, No 3, pp 195–210.
Mohapatra, Rangalal (2011): “Farmers’ Education and Profi t Effi ciency in Sugarcane Production: A Stochastic Frontier Profi t Function Approach,” IUP Journal of Agricultural Economics, Vol 8, No 2, pp 18–35.
Moock, Peter R (1981): “Education and Technical Effi ciency in Small-farm Production,” Econo-mic Development and Cultural Change, Vol 29, No 4, pp 723–39.
Nelson, Richard R and Edmund S Phelps (1966): “Investment in Humans, Technological Diffu-sion and Economic Growth,” The American Economic Review, Vol 56, Nos 1–2, pp 69–75.
Pudasaini, Som P (1983): “The Effects of Education in Agriculture: Evidence from Nepal,” American Journal of Agricultural Economics, Vol 65, No 3, pp 509–15.
Reimers, Malte and Stephan Klasen (2011): “Revisiting the Role of Education for Agricul-tural Productivity,” Working Paper No 214, Department of Economics, University of Goettingen.
— (2013): “Revisiting the Role of Education for Agricultural Productivity,” American Journal of Agricultural Economics, Vol 95, No 1, pp 131–52.
Welch, F (1970): “Education and Production,” Journal of Political Economy, Vol 78, No 1, pp 35–59.
Review of Urban AffairsJanuary 30, 2016
Reflecting on the Share Economy and Urbanising Capital – Biju Mathew
The New ‘Love’ Story of the Taj Mahal: – Sheela Prasad, Urban Planning in the Age of Heritage Tourism in Agra Kapil Kumar Gavsker
Public Social Rental Housing in India: Opportunities and Challenges – Swastik Harish
Politics, Information Technology and Informal Infrastructures in Urban Governance – Matt Birkinshaw
Urban Voting and Party Choices in Delhi: – Bhanu Joshi, Kanhu Charan Pradhan,
Matching Electoral Data with Property Category Pranav Sidhwan
For copies write to: Circulation Manager,
Economic and Political Weekly,320-321, A to Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013.
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DISCUSSION
Economic & Political Weekly EPW FebrUARY 13, 2016 vol lI no 7 79
Not in the Child’s Name
Vijayalakshmi Balakrishnan
Vijayalakshmi Balakrishnan ([email protected]) is the author of Growing Up and Away: Narratives of Indian Childhoods, which provides an overview of the post-independence child–state relationship.
The lack of qualitative case law reporting on juvenile crime leaves a gap that is largely unrecognised and leads to the law mirroring social realities rather than functioning as a beacon of social transformation.
In “Understanding Juvenile Crime: Notes from the Field” (EPW, 9 Janu-ary 2016), Malvika Tyagi writes about
the lack of awareness about the juvenile justice system among inmates of juve-nile homes. I would like to consider another aspect about this issue. The amendment to the Juvenile Justice Act resulting in the Juvenile Justice (Care and Protection of Children) Act, 2015 brings down the age of criminal respon-sibility to 16 years. This signal defeat of the rights of children may or may not make some adults safe. However, when translated into children’s lives, the effects are quite dramatic. The social media is rife with suggestions that the amendment will mean that from now on, every year, at least 10,000 children will be transferred to adult prisons.
Before the juvenile justice amendment was passed, despite the vociferous de-bates on television and elsewhere, the period witnessed a signifi cant reduction in support within the opposition parties. The majority party in the Rajya Sabha, the Congress which had, within commit-tees, opposed the reduction in the age of criminal responsibility, changed its posi-tion and supported the amendments, thus ensuring a smooth passage for the fi rst legislative about-turn on children’s rights in decades.
Child or Juvenile
To understand why Parliament chose to reduce its support to children, we need to shift focus from the text of the law to the judicial system and particularly case law on children in confl ict with the law. In the past few years, as this amendment positioned advocates of the rights of victims and of society against those of chil-dren, all the media-led debate came down to was the conduct of one 17-year-old, also known as A–6, on one evening in De-cember 2012. Media reports based on selective leaks from within the criminal
justice system had held that the “juven ile” was the most barbaric of the six who had raped Jyoti Singh (mainstream media refers to her as “Nirbhaya”).
The use of the term “juvenile” in contrast to “child” ensured a distance between the idea of the child who re-quires (along with family support) the additional protection of the state and the criminal who had participated in the attack. That seeming distance also ens-ured that the public empathy with chil-dren generally and the tendency to forgive was missing in this situation. Instead, the constant use of the term juvenile helped build a stronger case for some children to be viewed as mini-adults.
Such efforts to undermine children’s rights and view them as adults are not new. What appears to have changed is the context.
Judicial Interpretations
Much of the advances in child rights have come through judicial interven-tions. In the landmark Sheela Barse case (Sheela Barse (II) v Union of India: 1986 SCC (Cri) 352; (1986) 3 SCC 632), the Supreme Court had opined,
It is the atmosphere of the jail which has a highly injurious effect on the mind of the child, estranging him from the society and breeding in him aversion bordering on hatred against a system which keeps him in jail.
A decade later, taking that same spirit of reformism, the Madras High Court held in 1997,
The detention of a juvenile who has been found to have committed an offence in adult jails once s/he has ceased to be a juvenile to serve their remaining sentence by all means is not only improper (Karuppayee and Another v State Represented by Inspector of Police, Tiru-pur Rural Police Station, Tirupur, 1997) but goes against the basic tenets of the law itself.
Given this level of judicial support for the idea of reformism as the basic tenet of justice for children, how did it come about that the one case of A–6 was able to ensure the legislative retreat on rights? Case law, which advanced through judicial interpretation the rights of children in confl ict with law, is mostly from the last century. The more recent case law suggests a different trend.
DISCUSSION
FebrUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly80
Within the legal fraternity, the case of A–43, also a 17-year-old child, who was convicted in the Mumbai 1993 blast case is a benchmark. When that case reached the Supreme Court that child had al-ready spent the fi rst 13 years of adult-hood in jail. The bench refused to make a distinction between major and minor and upheld the whole life sentence which had already been awarded.
Another case which reached the Supreme Court was of a 16 (plus a few months) year old boy who was caught kissing a girl who was also 16 years old. The prosecution held that the kiss was forced. That case was heard more than a decade later and the bench awarded a six-month sentence, refusing to show any leniency despite the passage of time. Both of these cases have been cited by Faizan Mustafa (Indian Express 2014) who holds that the decision to try cases of children in confl ict with the law in adult courts is to end their childhood.
Clearly even before Parliament chan-ged the law, the Supreme Court, through recent pronouncements, had already taken the same position. It would be easy to impute motives of a shift in senti-ments towards conservatism to explain the shifts in position. In doing so, we would be both wrong and right.
Mirror or Beacon
There has been little debate in India on the role of law in social change processes. It has been accepted that the role of law is not to mirror existing social norms but to be a beacon of progressive change. And yet the trajectory of the most recent amendments to the juvenile justice law suggests otherwise. Since 1953, the Na-tional Crime Records Bureau (NCRB) has been bringing out a closely scrutinised annual compilation of “Crime in India.” This reportage is accurate but is based on the quality and quantum of state reports. In the run-up to the juvenile justice amend-ment, the reporting on crimes by children who happen to be juveniles has had a dis-proportionate impact on policymakers.
It has also been found (Hindu 2015) that in many of the fi rst information re-ports (FIRs) which name juveniles, they are often identifi ed as principal crimi-nals. In a vast majority of cases related
to offences against other children, the complaints were fi led by a parent, and both the alleged criminal and alleged victim were in the same age group and knew each other. What the testimonies in front of the Juvenile Justice Board or the children’s court or the sessions court contain is not known even within the ju-dicial system. During the debate on the amendment in the Lok Sabha, only one Member of Parliament pointed to the glaring lacunae in case law record-keep-ing in India and its implications for chil-dren in confl ict with law. The All India Reporter (AIR), which is a unique initia-tive, provides transcripts of all high court judgments going back over a cen-tury and more. Along with the Supreme Court Reporter, the AIR is the most cited and used document in building prosecu-tion and defence cases, as also in deliv-ery of judgments. Most cases relating to children never reach these stages.
While there are Juvenile Justice Boards, and now even a children’s court is pro-posed to be set up in every district, there is as yet no record-keeping of the quality demanded within the higher judiciary. A law begins to make a difference in a child’s life only through judicial inter-pretations. As yet, the higher judiciary has limited recorded access to the
everyday, lived experience of the chil-dren seeking justice in the juvenile jus-tice delivery system.
While the NCRB has been able to pro-vide expanded quantitative information on children in confl ict with the law in many states right down to the thana (police station) level, the qualitative as-pects of initial judicial intervention in such cases are neither recorded systemati cally nor covered well by the media, thus leav-ing a gap which is largely unrecognised and leads to the law mirroring some social realities rather than functioning as a beacon of social transformation.
What has happened in terms of child rights in India seems to be connected not so much with fl aws in the law as much as the breeding of circumstances which have allowed the spirit of justice to be undermined. The amended juve-nile justice law is not in the best interest of the child who happens to be a juvenile.
References
Hindu (2015): “Why the FIR Doesn’t Tell You the Whole Story,” by Rukmini S, 22 December.
Indian Express (2014): “Rough Justice in Pushing for Juvenile Age to Be Lowered, the Court Re-gresses,” Faizan Mustafa, 27 November, Karup-payee and Another v State of Represented by In-spector of Police, Tirupur Rural Police Station, Tirupu: 1997 Cr LJ 1627 (Madras), (Sheela Barse (II) v Union of India: 1986 SCC (Cri) 352; (1986) 3 SCC 632.
Review of Rural AffairsDecember 26, 2015
Rural Elites and the Limits of Scheduled Caste Assertiveness in Rural Malwa, Punjab – Nicolas Martin
Structural Change in Bihar’s Rural Economy: Findings from a Longitudinal Study – Alakh N Sharma, Gerry Rodgers
Explaining Village-level Development Trajectories – Suraj Jacob, Balmurli Natrajan,through Schooling in Karnataka Indira Patil
Changing Characteristics of Villages in Tamil Nadu – A Vaidyanathan, R Srinivasan
Dalit Mobilisation and Faction Politics in Rural Andhra Pradesh: Everyday Life of a Dalit NGO and Agricultural Labour Union – David Picherit
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Economic & Political Weekly EPW febrUARY 13, 2016 vol LI no 7 81
CURRENT STATISTICS EPW Research FoundationEPW Research Foundation
Wholesale Price IndexThe year-on-year (y-o-y) infl ation rate based on WPI stood at -0.73% in December 2015 compared to -1.99% in November 2015 (-0.5% a year ago). The index for food articles rose by 8.2% against 5.2% a month ago and 4.95% in December 2014. The infl ation rate of primary articles increased by 5.5% in December 2015 compared to the infl ation of 0.3% in December 2014 while the fuel and power index declined by (-)9.2% against -7.8%. The index for manufactured products fell to -1.4% in December 2015 against infl ation of 1.4% a year ago.
Index of Industrial ProductionThe y-o-y growth of IIP contracted by (-)3.2% in November 2015, after rising to a high of 9.9% in October 2015, and 5.2% in November 2014. The index of eight core industries grew marginally by 0.9% in December 2015 against 3.2% a year ago. Growth in crude oil production declined by (-)4.1% in December 2015 compared to -1.4% a year ago, and production of refi nery products decelerated to 2.1% against 6.1% in December 2014. Growth in coal production slowed down to 6.1% in December 2015 against 7.5% a year ago. Cement production grew by 3.2% but, steel production contracted by (-)4.4% in December 2015.
Consumer Price IndexCPI infl ation rate increased to 5.6%, y-o-y, in December 2015, from 5.4% in November 2015 and 4.3% in December 2014. The food price infl ation rate rose by 6.4% in December 2015, compared to 6.1% a month ago. Infl ation rate in the miscellaneous group inched up to 4% from 3.8%. CPI-rural infl ation increased sharply by 6.3% in December 2015 compared to 4.2% a year ago, similarly the CPI-urban infl ation rate increased by 4.7% against 4.5% in December 2014. As per Labour Bureau data, CPI infl ation for agricultural labourers and industrial workers increased to 5.7% and 6.7% in December 2015, respectively, compared to 4.9% and 6.7% in November 2015.
Foreign TradeThe merchandise trade defi cit widened by 27% to $11.7 billion (bn) in December 2015 from $9.2 bn a year ago. Exports contracted for the 13th consecutive month in December 2015 by (-)14.7% to $22.3 bn from $26.2 bn in December 2014 and imports declined by (-)3.9% to $34.0 bn against $35.3 bn a year ago. Non-oil imports increased by 7.6% to $27.3 bn in December 2015 from $25.4 bn in December 2014 while, oil imports were lower by (-)33.2% to $6.7 bn against $10.0 bn a year ago. During April–December 2015, exports shrank by (-)18.1% to $196.6 bn and imports by (-)15.9% to $295.8 bn from $239.9 bn and $351.6 bn respectively, a year ago.
Merchandise Trade December 2015 December 2015 Over Month Over Year (April–December) ($ bn) (%) (%) (2015–16 over 2014–15) (%)
Exports 22.3 11.4 -14.7 -18.1
Imports 34.0 14.0 -3.9 -15.9
Trade deficit 11.7 19.2 27.1 -11.2Data is provisional; Source: Ministry of Commerce and Industry.
Inflation in CPI and Its Components December 2015* (%) Latest Month Over Over Financial Year (Avgs) Weights Index Month Year 2013–14 2014–15
CPI combined 100 126.1 -0.4 5.6 9.4 5.9
Consumer food 39.1 131.3 -1.2 6.4 12.1 6.4
Miscellaneous 28.3 118.3 0.2 4.0 6.5 4.6
CPI: Occupation-wise Industrial workers (2001=100) 269 -0.4 6.3 9.7 6.3
Agricultural labourers (1986–87=100) 853 0.0 5.7 11.6 6.6* Provisional; Source: CSO (rural & urban); Labour Bureau (IW and AL).
Trends in WPI and Its Components December 2015* (%) Financial Year (Averages) Weights Over Month Over Year 2012–13 2013–14 2014–15
All commodities 100 -0.1 -0.7 7.4 6.0 2.0
Primary articles 20.1 0.5 5.5 9.8 9.8 3.0
Food articles 14.3 0.6 8.2 9.9 12.8 6.1
Fuel and power 14.9 -0.6 -9.2 10.3 10.2 -0.9
Manufactured products 65.0 -0.3 -1.4 5.4 3.0 2.4
* Data is provisional; Base: 2004–05=100; Source: Ministry of Commerce and Industry.
Growth in Eight Core Industries December 2015* (%)
Weights Over Month Over Year Financial Year (Avgs)
2013–14 2014–15
General index # 100.0 -8.2 -3.2 -0.1 2.8
Infrastructure industries 37.9 5.3 0.9 4.2 4.4
Coal 4.4 9.5 6.1 1.3 8.5
Crude oil 5.2 1.3 -4.1 -0.2 -0.9
Natural gas 1.7 0.8 -6.1 -13.0 -5.0
Petroleum refinery products 5.9 2.3 2.1 1.5 0.4
Fertilisers 1.3 3.5 13.1 1.5 -0.1
Steel 6.7 4.6 -4.4 11.5 4.2
Cement 2.4 17.2 3.2 3.1 5.6
Electricity 10.3 4.7 2.7 6.0 8.2#: November 2015, * Data is provisional; Base: 2004–05=100, Source: CSO and Ministry of Commerce and Industry.
* December 2015 is provisional; Source: Central Statistics Office (CSO); Base: 2012=100.
Movement of CPI Inflation April 2014–December 2015
Movement of Components of IIP Growth April 2014–November 2015
* November 2015 are quick estimates; Base: 2004–05=100.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.
Movement of WPI Sub-indices April 2014–December 2015
* Provisional; Oil refers to crude petroleum and petroleum products, while Non-oil refers to all other commodities.
* Data is provisional.
Trade Deficits April 2014–December 2015
Year-on-Year in %
-9.2%
5.5%
-1.4%
Fuel and Power
Manufactured Products
Primary Articles
-18
-12
-6
0
6
12
Dec*N*OSAJJMAMFJanDNOSAJJMApril2014 2015
Year-on-Year in %
CPI (Combined)
Rural
0
2
4
6
8
10
Dec*NOSAJJMAMFJanDNOSAJJMApril
Urban
6.3%5.6%
4.7%
2014 2015
$ billion
2014 2015
-8
0
8
16
Nov*OSAJJMAMFJanuary DNOSAJJMApril
Electricity
Mining
Year-on-Year in %
2.3%
0.7%
Manufacturing -4.4%
2014 2015
-18
-15
-12
-9
-6
-3
0
Dec*NOSAJJMAMFJanDNOSAJJMApril
Non-oil Trade Deficit
Oil Trade Deficit
Total Trade Deficit
-$4.3 bn
-$7.4 bn
-$11.7 bn
CURRENT STATISTICS
febrUARY 13, 2016 vol LI no 7 EPW Economic & Political Weekly82
EPW Research Foundation
India’s Quarterly Estimates of Final Expenditures on GDP 2014–15 2015–16 Financial YearRs crore | at 2011–12 Prices Q1 Q2 Q3 Q4 Q1 Q2 2014–15 (PE)
Private final consumption expenditure 1406817 (8.2) 1422029 (9.2) 1495823 (1.5) 1594581 (7.9) 1496865 (6.4) 1501895 (5.6) 1591508 (6.4)Government final consumption expenditure 294338 (9.0) 322557 (15.4) 261886 (33.2) 236561 (-7.9) 297285 (1.0) 336578 (4.3) 274071 (4.7)Gross fixed capital formation 769880 (0.2) 777597 (-4.1) 789694 (-2.9) 854802 (4.1) 875840 (13.8) 891606 (14.7) 867229 (9.8)Change in stocks 41969 (5.4) 40276 (0.3) 37469 (-3.6) 44284 (4.9) 50641 (20.7) 50894 (26.4) 48907 (30.5)Valuables 41528 (12.6) 36999 (-2.8) 36010 (7.4) 53348 (43.6) 47906 (15.4) 47703 (28.9) 47749 (32.6)Net trade (Export–Import) -34550 -62135 -40438 -8297 -43945 -58970 -31889 Exports 596944 (7.3) 628508 (1.5) 607707 (-2.6) 601191 (-8.2) 584770 (-2.0) 598797 (-4.7) 576676 (-5.1)Less imports 631494 (-5.2) 690643 (6.0) 648145 (0.4) 609488 (-8.7) 628715 (-0.4) 657767 (-4.8) 608565 (-6.1)Discrepancies -74273 -7811 26616 98959 1870 -3536 54763 Gross domestic product (GDP) 2534654 (7.5) 2566294 (8.3) 2668797 (6.9) 2874237 (7.5) 2726461 (7.6) 2766170 (7.8) 2852339 (6.9)
India’s Overall Balance of Payments (Net): Quarterly and Annual 2014–15 ($ mn) 2015–16 ($ mn) 2014–15 (Rupees bn) 2015–16 (Rupees bn) Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2
Current account -7489 -10945 -7721 -645 -6141 -8234 -448 [-1.5] -663 [-2.2] -478 [-1.5] -40 [-0.1] -390 [-1.2] -535 [-1.6] Merchandise -35093 -39652 -38635 -31560 -34181 -37425 -2098 -2403 -2393 -1964 -2,170 -2432 Invisibles 27604 28706 30913 30916 28040 29191 1651 1740 1915 1924 1,780 1897 Services 17561 18929 19982 20116 17384 17960 1050 1147 1238 1252 1,103 1167 of which: Software services 17014 16917 17844 18625 17658 18225 1017 1025 1105 1159 1,121 1184 Transfers 16452 16387 16428 16425 16153 16263 984 993 1017 1022 1,025 1057 of which: Private 16630 16513 16521 16600 16267 16421 994 1001 1023 1033 1,033 1067 Income -6408 -6610 -5497 -5625 -5498 -5032 -383 -401 -340 -350 -349 -327 Capital account 18811 17589 22864 30023 18115 7243 1125 [3.8] 1066 [3.5] 1416 [4.5] 1869 [5.6] 1,150 [3.5] 471 [1.4] of which: Foreign investment 20032 17237 13194 22993 7782 125 1198 1045 817 1431 494 8 Overall balance 11179 6897 13182 30149 11430 -856 668 [2.2] 418 [1.4] 816 [2.6] 1876 [5.7] 725 [2.2] -56 [-0.2]
Figures in square brackets are percentage to GDP.
Foreign Exchange Reserves Variation 29 Jan 30 Jan 31 Mar Over Over Financial Year So Far Financial YearExcluding gold but including revaluation effects 2016 2015 2015 Month Year 2014–15 2015–16 2010–11 2011–12 2012–13 2013–14 2014–15
Rs crore 2229700 1899880 2010400 43720 329820 212140 219300 73038 108086 82800 251570 322660US $ mn 330619 307398 321309 -1212 23222 26575 9311 19208 -14361 -485 16769 40486
Monetary Aggregates Variation Outstanding Over Month Over Year Financial Year So Far Financial YearRs crore 2016 2014–15 2015–16 2012–13 2013–14 2014–15
Money supply (M3) as on 22 January 11443250 104880 (0.9) 1142090 (11.1) 783780 (8.2) 897700 (8.5) 1024980 (13.9) 1127560 (13.4) 1028170 (10.8)Components Currency with public 1517790 18320 (1.2) 166790 (12.3) 105180 (8.4) 131440 (9.5) 118420 (11.6) 104760 (9.2) 140530 (11.3) Demand deposits 919620 -35640 (-3.7) 90560 (10.9) 17090 (2.1) 28880 (3.2) 42240 (5.9) 58750 (7.8) 78770 (9.7) Time deposits 8993180 123890 (1.4) 880430 (10.9) 655130 (8.8) 739310 (9.0) 863900 (15.3) 965330 (14.9) 796250 (10.7) Other deposits with RBI 12660 -1680 (-11.7) 4310 (51.6) 6380 (323.9) -1930 (-13.2) 420 (14.9) -1270 (-39.2) 12620 (640.6)Sources Net bank credit to government 3281440 30150 (0.9) 189400 (6.1) 47180 (1.5) 275280 (9.2) 337320 (14.2) 335840 (12.4) -38700 (-1.3) Bank credit to commercial sector 7611440 78520 (1.0) 759740 (11.1) 406400 (6.3) 571860 (8.1) 709420 (14.3) 777440 (13.7) 594280 (9.2) Net foreign exchange assets 2458420 16580 (0.7) 409940 (20.0) 124530 (6.5) 207770 (9.2) 92880 (6.0) 287290 (17.6) 326700 (17.0)Banking sector’s net non-monetary liabilities 1929360 20370 (1.1) 219220 (12.8) -203930 (-10.7) 159090 (9.0) 116530 (7.7) 275010 (16.8) -143800 (-7.5)Reserve Money as on 29 January 2016 2005370 30150 (1.5) 226830 (12.8) 45800 (2.6) 76910 (4.0) 88540 (6.2) 217850 (14.4) 195720 (11.3)Components Currency in circulation 1583970 29570 (1.9) 178670 (12.7) 104230 (8.0) 135660 (9.4) 123750 (11.6) 110090 (9.2) 147240 (11.3) Bankers’ deposits with RBI 408050 2410 (0.6) 43300 (11.9) -64950 (-15.1) -57510 (-12.4) -35610 (-10.0) 109020 (34.0) 35860 (8.3) Other deposits with RBI 13350 -1830 (-12.1) 4860 (57.2) 6520 (331.0) -1240 (-8.5) 420 (14.9) -1270 (-39.2) 12620 (640.6)Sources Net RBI credit to Government 414030 -23910 (-5.5) -42710 (-9.4) -241960 (-34.6) 49510 (13.6) 54840 (10.2) 108120 (18.3) -334180 (-47.8) of which: Centre 413840 -24130 (-5.5) -42220 (-9.3) -241590 (-34.6) 52800 (14.6) 56080 (10.5) 107150 (18.1) -336610 (-48.2) RBI credit to banks & commercial sector 156810 57260 (57.5) 84960 (118.2) 14360 (25.0) -45690 (-22.6) 34610 (393.3) 14080 . 145010 . Net foreign exchange assets of RBI 2349020 43900 (1.9) 332300 (16.5) 214200 (11.9) 221740 (10.4) 85860 (5.8) 244460 (15.7) 324760 (18.0) Govt’s currency liabilities to the public 21310 0 (0.0) 2230 (11.7) 1740 (10.0) 1880 (9.7) 1900 (14.1) 2000 (13.0) 2090 (12.1) Net non-monetary liabilities of RBI 935800 47110 (5.3) 149950 (19.1) -57470 (-6.8) 150530 (19.2) 88670 (14.7) 150810 (21.8) -58050 (-6.9)
Scheduled Commercial Banks’ Indicators (Rs crore) Variation
Outstanding Over Month Over Year Financial Year So Far Financial Year
(As on 22 January 2016) 2016 2014–15 2015–16 2012–13 2013–14 2014–15
Aggregate deposits 9270010 85360 (0.9) 928920 (11.1) 635530 (8.2) 736730 (8.6) 841360 (14.2) 955110 (14.1) 827720 (10.7) Demand 821230 -36420 (-4.2) 83900 (11.4) 23410 (3.3) 27200 (3.4) 36970 (5.9) 51620 (7.8) 80110 (11.2) Time 8448780 121760 (1.5) 845010 (11.1) 612120 (8.8) 709520 (9.2) 804400 (15.2) 903490 (14.8) 747610 (10.7)Cash in hand 61760 -1280 (-2.0) 9790 (18.8) 6100 (13.3) 8410 (15.8) 4360 (12.1) 5380 (13.3) 7480 (16.3)Balance with RBI 380790 -28250 (-6.9) 32120 (9.2) 32320 (10.2) 7710 (2.1) -41000 (-12.7) 34090 (12.1) 56730 (17.9)Investments 2712550 17380 (0.6) 222330 (8.9) 277400 (12.5) 220720 (8.9) 268320 (15.4) 206720 (10.3) 279010 (12.6) of which: Government securities 2709870 16760 (0.6) 221530 (8.9) 277150 (12.5) 220120 (8.8) 268640 (15.5) 207540 (10.4) 278560 (12.6)Bank credit 7090330 73330 (1.0) 726400 (11.4) 369830 (6.2) 553900 (8.5) 648610 (14.1) 733640 (13.9) 542330 (9.0) of which: Non-food credit 6988140 82150 (1.2) 727210 (11.6) 365280 (6.2) 546140 (8.5) 633490 (14.0) 731610 (14.2) 546350 (9.3)
Capital Markets 5 February Month Year Financial Year So Far 2014–15 End of Financial Year 2016 Ago Ago Trough Peak Trough Peak 2012–13 2013–14 2014–15
S&P BSE SENSEX (Base: 1978–79=100) 24617 (-14.7) 25580 28851 (42.4) 23962 29044 22277 29682 18836 (8.2) 22386 (18.8) 27957 (24.9)S&P BSE-100 (Base: 1983–84=100) 7580 (-13.8) 7967 8789 (46.2) 7371 8980 6680 9107 5679 (-38.0) 6707 (18.1) 8607 (28.3)S&P BSE-200 (1989–90=100) 3162 (-12.0) 3332 3592 (49.4) 3072 3691 2678 3723 2288 (6.0) 2681 (17.2) 3538 (31.9)CNX Nifty (Base: Nov 3, 1995=1000) 7489 (-14.0) 7785 8712 (44.7) 7277 8834 6653 8996 5683 (7.3) 6704 (18.0) 8491 (26.7)Net FII Investment in equities (US $ Million)* 163848 (-0.7) 165529 165050 (13.1) - - - - 136304 (23.4) 149745 (9.9) 168116 (12.3)* = Cumulative total since November 1992 until period end | Figures in brackets are percentage variations over the specified or over the comparable period of the previous year | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.
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* Data pertains to April–December. @ Call and Term Money Segment. (i) Figures in brackets are percentage to total, (ii) Tables 1 to 11 relate to Government Securities Market, (iii) Tables 12 to 14 relate to Money Market, and (iv) Tables 15 to 20 relate to Forex Market. Source: Clearing Corporation of India Limited (CCIL).
Secondary Market Transactions in Government Securities, Forex Market and Money Market—January 2016
4 Tenor-wise Settlement Volume of Central Government Dated SecuritiesYear January 2016 2015–16* 2014–15*
2016 4777 41231 (0.59) 14679 (0.19)2017 9057 46503 (0.66) 17365 (0.22)2018 10681 46687 (0.67) 7061 (0.09)2019 24477 94369 (1.35) 175087 (2.24)2020 95677 784239 (11.18) 811373 (10.37)2021 6938 41098 (0.59) 7563 (0.10)2022 8107 106090 (1.51) 236385 (3.02)2023 64307 632826 (9.02) 2364261 (30.21)2024 40336 1586918 (22.62) 1684083 (21.52)2025 116833 1580297 (22.52) 11398 (0.15)2026 53385 347365 (4.95) 115010 (1.47)2027 3826 80938 (1.15) 540554 (6.91)2028 6237 374538 (5.34) 1597422 (20.41)2029 29254 60461 (0.86) 0 (0.00)2030 188220 925620 (13.19) 86882 (1.11)2031 0 0 (0.00) 0 (0.00)2032 985 42601 (0.61) 33372 (0.43)2033 4577 51808 (0.74) 10416 (0.13)2034 4494 23988 (0.34) 570 (0.01)2035 96 1907 (0.03) 1575 (0.02)2036 152 4655 (0.07) 2380 (0.03)2037 0 0 (0.00) 0 (0.00)2038 0 0 (0.00) 0 (0.00)2039 0 41 (0.00) 12 (0.00)2040 225 13230 (0.19) 11237 (0.14)2041 25 7356 (0.10) 7500 (0.10)2042 1335 15479 (0.22) 34913 (0.45)2043 1605 15937 (0.23) 46151 (0.59)2044 1934 50811 (0.72) 9684 (0.12)2045 4254 37477 (0.53) 0 (0.00)2055 175 1614 (0.02) 0 (0.00)Total 681969 7016084 (100) 7826933 (100)
2 Netting Factor a Securities b Funds
Gross Net Netting Gross Net Netting (Rs Cr) (Rs Cr) Factor (%) (Rs Cr) (Rs Cr) Factor (%)
2375042 894441 62.34 2399227 352442 85.31 2615148 942371 63.96 2709323 381742 85.91 22114045 8666743 60.81 22521208 3635900 83.86 21731440 8287642 61.86 21852898 3429998 84.30
3 Instrument-wise Break-up of Securities Transactions (Rs Cr) a Outright Trades b Repo Central Govt Treasury State Central Govt Treasury State Dated Bills Govt Dated Bills Govt
681969 64395 23838 624717 161453 20321 1011314 75668 20928 495490 228800 33517 7048908 730725 244690 4971341 1964149 117355 7875894 709631 139052 3641036 2747078 127429
1 Settlement Volume of Government Securities TransactionsSettlement Outright Repo Daily Average (Outright) Daily Average (Repo)Period Number Volume Number Volume Number Volume Number Volume of Trades (Rs Cr) of Trades (Rs Cr) of Trades (Rs Cr) of Trades (Rs Cr)
Jan 2016 70039 770202 12377 1604841 3502 38510 538 69776Jan 2015 105196 1107910 9917 1507238 5009 52758 381 579712015–16* 723276 8024323 108047 14089816 3598 39922 464 604712014–15* 845730 8724577 90584 13006863 4271 44064 374 53747
11 Type-wise Settlement Volume of Government Securities Transactions (Rs crore)Period Outright Repo Proprietary Constituent Proprietary Constituent Trades Volume Trades Volume Trades Volume Trades Volume
Jan 2016 62943 697722 7096 72479 6023 769884 196 36608Jan 2015 94875 992425 10321 115484 4727 707347 258 504592015–16* 650232 7222411 73044 801912 51815 6684092 2298 368752
16 Category-wise Forex Activity—Deal TypeCategory Cash Tom Spot Forward
Foreign Banks 45.09 46.94 39.64 43.93Public Sector Banks 20.48 19.25 35.12 30.05Private Sector Banks 34.32 33.73 24.99 25.92Cooperative Banks 0.08 0.08 0.25 0.09Financial Institutions 0.03 0.00 0.00 0.00
8 Market Share of Top Five Members(Category-wise) (%)Categories Jan 2016 Jan 2015 2015–16*
Cooperative Banks 63.96 61.55 61.32Foreign Banks 84.87 80.23 85.92Public Sector Banks 51.75 58.36 49.78Private Sector Banks 81.98 83.84 83.83Mutual Funds 63.75 70.52 63.57Primary Dealers 89.77 84.68 89.02
6 Market Share of Top ‘n’ Securities (%)Period Jan 2016 Jan 2015 2015–16* 2014–15*
Top 5 69.20 84.59 70.70 79.22Top 10 84.55 91.49 84.81 92.22Top 15 89.75 95.13 89.06 96.87Top 20 92.88 97.45 92.18 98.05
7 Intercategory Member Turnover Activity for All Category Buy SellCategory Outright Reverse Repo CBLO Lending Uncollateralised Forex Outright Repo CBLO Borrowing Uncollateralised Forex (Funds Lending) Money Market Money Market Lending@ Borrowing@
Cooperative Banks 3.64 0.21 2.61 30.55 0.17 3.44 1.87 2.83 0.94 0.17Financial Institutions 0.11 0.01 0.52 - 0.00 0.06 0.00 11.93 - 0.01Foreign Banks 33.60 27.05 5.68 8.70 42.48 33.32 17.76 16.20 11.11 42.22Insurance Companies 1.93 8.22 12.09 - - 2.00 0.00 0.31 - -Mutual Funds 10.50 13.18 54.23 - - 10.78 0.00 17.83 - -Others 2.79 0.00 5.85 - - 1.03 14.80 15.93 - -Primary Dealers 15.57 3.09 0.07 0.01 - 18.34 30.16 6.65 22.40 -Private Sector Banks 11.77 12.90 3.32 16.40 27.74 12.71 27.48 16.96 35.02 28.11Public Sector Banks 20.09 35.35 15.63 44.35 29.61 18.33 7.94 11.36 30.53 29.49Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
12 Settlement Volume of Collateralised Borrowing and Lending Obligations (CBLO)Period Overnight Term Total Number Volume Number Volume Number Volume of Trades (Rs Crore) of Trades (Rs Crore) of Trades (Rs Crore)
Jan 2016 14507 1111349 2428 199095 16935 13104452015–16* 154643 13036146 26092 2066814 180735 15102959
20 Forex Trading Platform: FX Clear (Amount in US$)Period Spot Daily Average Trades Value Trades Value
Jan, 2016 42034 22502 2102 1125
Jan 2015 34001 18754 1619 893
2015–16* 360676 197252 1794 981
2014–15* 270648 152535 1367 770
18 Market Share—Forex (%)Period Jan 2016 Jan 2015 2015–16* 2014–15*
Top 5 32.09 31.15 29.17 29.07Top 10 52.57 50.08 49.46 49.69Top 15 65.25 65.13 63.48 64.90Top 20 74.39 74.95 74.15 75.17
5 Deal Size Analysis (%)Settlement Period < 5 Cr 5 Cr > 5 Cr <=10 Cr >10 Cr<=20 Cr > 20 Cr % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total Trades Value Trades Value Trades Value Trades Value Trades Value
Jan 2016 3.58 0.44 61.10 27.78 19.07 17.30 5.60 8.65 10.65 45.832015–16* 3.24 0.40 59.97 27.03 20.60 18.53 5.60 8.58 10.58 45.47
9 Market Share of Top ‘n’ Members (%)Period Jan 2016 Jan 2015 2015–16* 2014–15*
Top 5 34.76 27.56 32.12 31.28Top 10 49.72 46.10 48.69 46.43Top 15 59.61 57.94 58.70 56.55Top 20 66.97 66.00 65.86 64.43
13 Top 5 Securities—Basket Repo 14 Top 5 Securities—Special Repo Security Trades Value Rate Security Trades Value Rate
8.27% GS 2020 349 77366 6.97 7.72% GS 2025 946 86082 6.327.28% GS 2019 170 33807 6.97 7.88% GS 2030 425 36116 6.798.40% GS 2024 235 28539 6.96 7.68% GS 2023 281 19002 6.768.12% Govt Stock 2020 122 21573 6.96 8.40% GS 2024 35 10934 6.9605/01/2017 Maturing 364 DTB 47 20838 6.98 7.59% GS 2026 62 9456 6.96
17 Forex Deal Size Analysis (%)Settlement Period < 1 mn 1 mn > 1 mn <= 5 mn > 5 mn <= 10 mn > 10 mn <= 20 mn > 20 mn % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total Trades Value Trades Value Trades Value Trades Value Trades Value Trades Value
Jan 2016 35.65 6.05 41.66 15.80 15.85 18.75 3.01 10.83 1.56 10.29 2.27 38.282015–16* 32.44 4.87 43.20 14.74 16.81 18.10 3.37 11.00 1.48 8.76 2.70 42.54
10 Trading Platform Analysis of Outright Trades Period OTC NDS-OM Trades % Share Value (Rs Cr) % Share Trades % Share Value (Rs Cr) % Share
Jan 2016 4924 6.86 151698 19.05 66811 93.14 644524 80.95Jan 2015 5897 5.61 174084 15.66 99202 94.39 937856 84.342015–16* 48469 6.70 1567973 19.52 675015 93.30 6466388 80.48
19 Tenor-wise Forward Trade Analysis (%)Settlement Period < 30 Days > 30 Days & <= 90 Days > 90 Days & <= 180 Days > 180 Days & <= 365 Days > 1 Year % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total % to Total Trades Value Trades Value Trades Value Trades Value Trades Value
Jan 2016 18.25 25.17 17.25 21.84 14.34 10.53 47.00 39.47 3.15 2.99Jan 2015 15.87 21.73 20.61 21.57 13.50 11.30 48.36 43.40 1.65 2.002015–16* 15.64 23.32 18.13 20.84 14.52 12.11 48.78 41.35 2.92 2.38
15 Forex SettlementSettlement Period Cash Tom Spot Forward Total Average Netting Factor: Forex Trades Value Trades Value Trades Value Trades Value Trades Value Trades Value Gross Net Netting (Rs Cr) (US $Mn) (Rs Cr) (US $ Mn) (Rs Cr) (US $ Mn) (Rs Cr) (US $ Mn) (Rs Cr) (US $ Mn) (Rs Cr) (US $ Mn) (US $ Mn) (US $ Mn) Factor (%)
Jan 2016 2233 421854 62708 3105 464195 69059 149343 1498337 223239 7512 485474 72770 162193 2869860 427777 9011 159437 23765 427777 16293 96.192015–16* 23692 4476788 690224 35734 5415282 835244 1389889 13868384 2133699 86705 5490924 843506 1536020 29251377 4502674 7877 150007 23091 4502674 207568 95.39
FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly84
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RUMINATIONS
The Luddite revolt broke out when the
industrialisation project, formally to be commemorated in future academic
and official histories as the Industrial Revolution, was
in full flow
Booking the LudditesRediscovering some gems in his vast repository of books, a veteran reader revives forgotten memories of Byron and the Luddites.
M S Prabhakara
Many who make a living by using words naturally accumulate books, their capital, over their working lives. In some cases, this accumulative itch persists
even after the end of their working life. However, as so often happens, this capital is not properly used. It then becomes merely a stagnant hoard, the books gathering mould and dust in their shelves, a burden that can neither be discarded nor put to proper use.
This has certainly been the case with me. After having lived by my wits all my life and made a living, too, by using words, I gave away many of the accumulated books some years ago to a research institute. Since time and circum-stance (highfalutin fancy words for old age and illness) have brought to an end my days of writing, I certainly do not need so many books around me. Even so, more books than I have given away remain, for there are few takers for the kind of books I have. The books—except two shelves of mostly dictionaries and other reference books, and about a hundred other books that I love reading again and again—are spread over fi ve rooms in crowded shelves and cupboards. They have also become a bit of an embarrassment, sometimes forcing me to prevaricate when visit-ing acquaintances, in particular children accom-panying them, ask if I have read “all these books.”
However, I do read; the habit of reading ac-quired early in childhood remains even in my 80th year. A happy result of these curious or sceptical enquiries is that I feel liberated after being shamed into admitting that I am far less widely read than suggested by the virtual godown of dusty books and papers that surround me. I have also begun, now that I have very little to do, to locate in this depository all the books I am yet to read, and read them for pleasure, without the pressure of having to pass an examination or impress people, making happy discoveries.
Two such recent discoveries are Passages from Arabia Deserta by Charles Doughty (Penguin Books, 1938) and Byron: The Years of Fame by Peter Quennell, fi rst published in 1935 and issued as a Penguin Book in 1954. The book on Byron is a particularly happy discovery. The “fame” in the title, which along with ill-fame, notoriety and blackguarding by the very same public that had so recently adulated him and was to be an integral part of Byron’s all-too-brief life (1788–1824), began with the publication in 1812 of Childe Harold’s Pilgrimage (“I woke up one morning and found myself famous”). He led a frenetic life for the next 12 years, wrote some great poetry and satire,
including the memorable The Vision of Judgement. The book deals with many other details of the years of fame and infamy—neither of his seeking—the breakdown of his marriage and the “irregularities” of his sexual life, his inter-ventions in the House of Lords, especially the speech he made in support of the Luddite revolt (1811–16) even as the full might of the government was deployed to suppress the revolt, his literary friendships and enemies. Towards the end he joined Greek partisans in their fi ght against Turkish occu-pation of Greece, dying not in battle as he would have wished, but of malaria in the mudfl ats of Missolonghi, a decidedly anti-climactic end to a heroic life, warts and all.
The serendipitous aspect of the book for me was the revival of memories that I had forgotten of Byron’s acknow-ledgement of, and tribute to, the Luddites (workers in
English textile mills who took the name of a real or imagined textile mill worker called Ludd from the previous century who is supposed to have resisted installation of new textile machinery), the speech he made in the House of Lords in support of the rebellious workers even as the full might of the government was deployed to sup-press the revolt.
The Luddite revolt broke out when the industri-alisation project, formally to be commemorated in future academic and offi cial histories as the
Industrial Revolution, was in full fl ow. The project to expand industrialisation, ignoring human costs, had the full backing of all organs of the government. The minority of dissenting voices were simply ignored. It is true that William Blake had prophetically warned of the “dark, Satanic mills…in England’s green and pleasant land,” but his was a voice in the wilderness. The acquisition of colonies and the vast wealth that these brought into England had their own logic. Gold and diamonds could not be just hoarded in vaults; they had to be invested, made to work and generate more gold and diamonds, more wealth and goods. Dark satanic mills were an integral part of making the wealth brought from the colonies to regenerate itself.
The Luddites’ resistance was crushed. The word, Luddite, has now become a bit of a joke; Luddites were the utopian dreamers who wanted to reinvent the wheel. Only such unrealistic and unnecessary fantasies could explain their programme of physically wrecking new machinery, especially new textile machinery installed in factories in the North. The workers saw that the new machinery, the stocking and
Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 85
POSTSCRIPT
RUMINATIONS | ARTS
spinning frames, posed clear and present danger to them, to their jobs, to their way of life. For the government, however, Luddites were no joke. It passed legislation making destruction of machinery a capital offence, and hanged 17 Luddites.
Finally, to end, a poem attributed to Byron celebrating Luddite uprisings: Hangmen, Prison Ships, Spies and Battalions: The State Fights BackThose villains, the weavers, are all grown refractory,Asking some succour for charity’s sake -So hang them in clusters round each Manufactory,That will at once put an end to mistake.Men are more easily made than machinery -Stockings fetch better prices than lives -Gibbets in Sherwood will heighten the scenery,Showing how Commerce, how Liberty thrives!Some folks for certain have thought it was shocking,When Famine appeals, and when Poverty groans,That life should be valued at less than a stocking,And breaking of frames lead to breaking of bones.If it should prove so, I trust, by this token,(And who will refuse to partake in the hope?)That the frames of the fools may be fi rst to be broken,Who, when asked for a remedy, send down a rope.
M S Prabhakara ([email protected]) is a veteran journalist who now lives in Kolara, Karnataka.
Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 85
POSTSCRIPT
RUMINATIONS | ARTS
The Many Faces of S G Vasudev
S G Vasudev, the painter who got the Karnataka government to hand over an old heritage bungalow to house the National Gallery of Modern Art in Bengaluru, is a sensitive iconoclast.
Jyoti Punwani
There’s the multiple-award winning painter S G Vasudev who paints in his studio to the strains of classical music, there’s the Vasudev who badgers offi cials to set
up art institutions and then there’s the Vasudev who calls up Muslim friends to apologise for the demolition of the Babri Masjid. There’s also the Vasudev born in 1941 to an orthodox Brahmin family who enjoys his whisky and paya soup.
In The Open Frame, the recently released documentary on Vasudev (directed by Chetan Shah), M S Thimmappa, former Vice Chancellor of Bangalore University, laughingly recounts how the artist chased him for years till he was in a position to sanction the opening of a visual arts department in the university. It started off in 2005 with 25 students pay-ing Rs 1,000 as annual fees; today it has 68 students and the fees are Rs 6,000, still a fraction of what private art colleges charge. Vasudev was similarly instrumental in getting the
Karnataka government to hand over an old heritage bungalow to house the National Gallery of Modern Art in Bengaluru.
Few artists as senior and successful as Vasudev bother to stir out of their own worlds to work for art as a cause. But as the documentary shows, Vasudev is almost single-minded in his determination to have institutions that will nurture art. From the proposed Kalagrama Arts Village to the K K Hebbar Gallery, Vasudev’s hidden hand has been behind many public art initiatives in Bengaluru.
A lot of this has to do with the six years Vasudev spent at the Government School of Arts and Crafts, Madras, under the mentorship of principal K C S Paniker, who he came to regard as a father fi gure. He recalls how the legendary artist would drop in on students in the evenings to ask “What have you been painting?,” to comment on the students’ work, and then ask them to come see his own latest painting. From him, probably, Vasudev imbibed the humility to seek out the company of young artists: “I enjoy talking to them, I go to their exhibitions. Maybe I can learn something from their work.’’ The Arnawaz Vasudev Charities (named after his fi rst wife, also an artist, who died young) gives scholarships to young artists and supports art activities involving them.
Saddened by his students having to commercialise their art to survive, Paniker fl oated the idea of a space where artists could work. That’s how the Cholamandal Artists’ Village in Chennai came up in 1966. Paniker made Vasudev, then just 25 years old, its secretary.
Within two years, the young artist was negotiating with the then Karnataka Chief Minister Devraj Urs on how to revive the non-functioning Karnataka Lalit Kala Academy. Vasudev recalls the chief minister asking: “Who’s he?’’ when
he suggested bringing in the renowned artist K K Hebbar as chairman. Hebbar agreed, on condition that Vasudev would be part of the board.
In his long experience of dealing with bureaucrats, Vasudev has met some sensitive to artists’ needs, but the good they’ve done has been wasted by their successors. A bureaucrat must not just be sensitive to art, he feels, s/he should also be allowed to stay on long enough to build and nurture institutions till they can survive on their own. He is emphatic that governments must spend on art, but not directly; they must set up trusts primarily comprising art experts, even if they include a couple of their own appointees. The government’s job should be to support the opening up of art to the public, says Vasudev, some-thing he feels strongly about. Last year, he initiated a venture called Art Park Bangalore where, on the fi rst Sunday of every month, well-known artists paint in a park, interact with people, and price their creations at just Rs 500.
...Vasudev is almost single-minded in his determination to have institutions that will nurture art. From the proposed Kalagrama Arts Village to the K K Hebbar Gallery, Vasudev’s hidden hand has been behind many public art initiatives in Bengaluru
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ARTS | GANDHIANA
For Vasudev, an artist cannot but interact with society. Despite being warned that signing a letter against the Emer-gency would cost him his show in Delhi, he went ahead (his show was held too!). The day the Babri Masjid was demol-ished, he joined a protest morcha and, the next year, joined Sahmat’s “Hum Sab Ayodhya” tour of Ayodhya. Out of these experiences came his paintings for the 1993 Kolkata exhibi-tion Wounds, where artists exhibited works against commu-nal violence; as well as his Humanscape series.
Part of Vasudev’s engagement with young artists must come from his childhood. His parents were not exactly enthusiastic about his leanings towards art—they expected him to become an engineer or a doctor, like many of his cousins. But the teenager, miserable at having to study science, would sketch late into the night and send these sketches to the papers, where they were noticed by art critic G Venkatachalam. It was he who convinced Vasudev’s parents that their talented son must study art.
Winning the National Scholarship in 1964 and the Lalit Kala Akademi’s National Award in 1967 mollifi ed his mother. Yet, his parents always thought he would be unable to sustain himself through art, and fi nally return to looking after his ancestral land. They didn’t realise Vasudev had very early on moved beyond that stage.
Vasudev’s grandfather was the offi cer in charge of the Chamundeshwari temple in Mysore. Pujas at home were routine, but even as a schoolboy, Vasudev would wonder whether they were necessary. Soon, he was, unknown to his parents, breaking the strict vegetarian code of his home and school, roaming around with a Muslim neighbour, eating omelettes and biryani. But it was his entry into the Arts College in Chennai that changed his world. For the fi rst time, most of his classmates and teachers were non-Brahmins: Dalits, Christians, Parsis, Coorgs. Caste didn’t matter; they addressed one another by their fi rst names. There were no prayers; boys and girls studied together. “That atmosphere opened up my mind,’’ he recalls. He came into contact with the playwright Girish Karnad who took him into the world of theatre and literature. Finally, he began attending the lectures of J Krishnamurthi who, in his father’s wry words, “spoilt’’ him completely.
His parents were to be shocked again when he told them he was going to marry a fellow artist who happened to be a Parsi. Surprisingly, his grandfather, the temple peshkar, sat in the front row at the wedding and blessed the couple. Vasudev’s second wife is the journalist Ammu Joseph, a Syrian Christian.
The Brahminical hold over the performing arts saddens Vasudev. His favourite dancers are Balasaraswati and Alarmel Valli who, he feels, evolved their own non-Brahminical styles. He has never forgotten one of his Dalit professors recounting his childhood experience. The professor would go with his grandfather, who owned some properties, to collect rent from their tenants. One of these tenants, a Brahmin,
would drop the cash into the father’s outstretched hands lest his Dalit landlord’s touch pollute him.
Jyoti Punwani ([email protected]) is a Mumbai-based freelance journalist and human rights activist.
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ARTS | GANDHIANA
Dandi March ReduxEighty-six years after the historic Dandi March undertaken by Mahatma Gandhi, writers and activists gathered on the anniversary to revive the Gandhian spirit of protest.
Chaman Lal
There were hundreds of them—award-returning and other authors, artists, fi lm-makers, and cultural activists from Punjab to Dharwad, marching from the seashore
at Dandi, a small seaside village of Gujarat, made famous by the historic march by Mahatma Gandhi on 6 April 1930, when, by making salt from seawater, he broke British laws on salt production, which was oppressing salt-producing peasants of the area due to overtaxation. Gandhi walked 386 kilometres from the Satyagraha Ashram (at Sabarmati) in Ahmedabad to Dandi, beginning 12 March.
On 30 January 2016 writers/activists did not march that dis-tance; they marched in the Dandi area itself not only to pay homage to Gandhi, but to raise their voice against growing communal aggression against innocent people, not only in India, but throughout the world. Their protest was inspired by the recent assassinations of Dr Narendra Dabholkar, Comrade Govind Pansare and Prof M M Kalburgi in India by Hindutva fringe elements, the harassment of many rational bloggers like Avijit Roy in Bangladesh, the killing of young students in Pakistan by jihadis, the brutal assaults by ISIS-like Islamic fundamenta lists, and the earlier assassination of the revolu-tionary Punjabi poet Pash at the hands of Khalistani terrorists.
The 30 January march began at 7 am from the Agricultural University auditorium at Navsari, close to Dandi, where Rajmohan Gandhi, grandson of the Mahatma and an eminent author, shared the dais with three other families of those who were recently martyred by the same elements who assassi-nated Gandhi on 30 January, 78 years ago: Hamid Dabholkar, son of Dr Narendra Dabholkar, Dr Megha Pansare, daughter-in-law of Comrade Pansare and Vijay Kalburgi, son of Prof Kalburgi. They all spoke in support of upholding the ideas for which their elders had sacrifi ced their lives; Rajmohan became emotional and could not speak for a minute, trying to hold his tears back. He gave a resounding message: “Become fearless—that is the way forward.” He appreciated the solidarity displayed by all four families at this critical juncture. The Gujarati Dalit writer Martin Macwan, fi lm-maker Anand Patwardhan and Film and Television Institute of India student
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GANDHIANA | ACADEMIA
representative Rakesh Malik also spoke, underlining the threats posed by religious fundamentalists the world over, who created an atmosphere of terror and intolerance every-where. Dr Janaki Mithaiwala sang Narsi Mehta Bhabani in her melodious voice, including Gandhi’s favourite Vaishnav Jan to tene kahie. Eminent Konkani writer from Goa, Damodar Mauzo, chaired this session.
The day was to begin from the sea point at Dandi where Gandhi broke the salt law in 1930, but due to the Patidar movement and also due to the visit of some minister to Dandi, the Gujarat police did not allow the protestors to go there till 11.30 am.
An impressive march was taken out from the Dandi seashore to Prarthna Mandir, where the proceedings of the day or Bhasha Samvad (an inter-language dialogue) began. To the surprise of many, it began with the martyred revolutionary Punjabi poet Pash’s famous poem “Sabse Khatarnak” (Most Dangerous—which is the death of our dreams!). The poem, translated into Hindi by Chaman Lal, who returned the Sahitya Akademi Translation Prize for Pash’s poetry, was recited with passion by denotifi ed tribal activist Dakshin Chhara. The session chaired by Prof Rajender Cehnni from Karnataka included presentations from Atamjit Singh and Chaman Lal from Punjab, Atul Pethe and Ganesh Vispute from Maharashtra, Dilip Borker from Goa, Gangadhar Murthy, Nila and the youngest participant, 17-year-old Kannada writer Mujju Tirthalli from Karnataka, who not only declined to accept the Sahitya Akademi Young Writer Award, but also made an impassioned plea to unite against intolerance. Over two more sessions many other writers and activists like Rahamat Tarikkere, Peter Alexander, Tajuddin Pathan, Padma Bhushan awardee painter Ghulam Mohammad Sheikh, retired IAS offi cer K K Chakaravraty and Uttam Parmar, among others, expressed their views on growing intolerance and fascist tendencies in Indian society, particularly after May 2014, when Hindutva forces got into power. Almost all speakers paid glowing tributes to the young Dalit student martyr Rohith Vemula from Hyderabad, who would have turned 27 years that day, but was forced to end his life two weeks be-fore. The participants of the march included 95-year-old Gandhian Prakash Shah, who had burnt a railway station during the Quit India movement of 1942 and his son Himanshu, a known Gandhian activist in Chhattisgarh, and tribal activist Soni Sori, who is now not allowed to enter Chhattisgarh as there are nearly a hundred cases registered against her.
The organiser of the event, Prof Ganesh Devy, summed up the dialogue with a call to continue the movement for a liberal and rational society at an all-India level. The Goan and Dharwad delegations both extended invitations to hold the next meets in their places.
The writers and artists further marched to the Gandhi museum and memorial site in Dandi and observed a two-minute silence at 5.47 pm—the exact time of Gandhi’s assassination
in Delhi on 30 January 1948 at the hands of Nathuram Godse. A play by Dabholkar’s rationalist group—From So-crates to Dabholkar–Pansare via Tukaram (in Hindi)—was staged in which the tradition of sacrifi ce for the right to free expression of ideas was emphasised.
Ironically, some Hindutva fringe elements in Goa celebrated the day with a perverse glorifi cation of the assas-sin of the 80-year-old man, Nathuram Godse, by distributing sweets and releasing a book on him!
Some of the march participants visited the Tribal Academy set up by Devy. The play by Maharashtra Andhashraddha Nirmoolan Samiti was staged there as well and the last item of the protest event was again a Pash poem—“Dharam Diksha ke lite Vinay Patar”—a plea for religious baptism, and a biting satire on the inhuman terror spread by religious fundamentalists, particularly for women/mothers.
The spontaneous movement of award wapsi, ridiculed and abused by the likes of actor Anupam Kher, has certainly created an impact on Indian society, which was not even imagined by the award-returning authors, artists and fi lm-makers. While the Anupam Khers get rewarded with Padmas, award returnees get rewarded with growing fear-lessness among people, as Rajmohan Gandhi said at the re-markable event, where Gandhiana got joined by the revolu-tionary spirit of Bhagat Singh. Most of the leftists and Ambedkarites in Gujarat, Karnataka, Maharashtra and Goa joined hands in this epoch-making event.
Chaman Lal ([email protected]) is a retired professor from the Jawaharlal Nehru University, New Delhi, known for his books on Bhagat Singh and Pash.
The writers and artists further
marched to the Gandhi museum and
memorial site in Dandi and observed a two-minute silence
at 5.47 pm—the exact time of Gandhi’s assassination in Delhi on 30 January 1948...
Economic & Political Weekly EPW FEBRUARY 13, 2016 vol lI no 7 87
POSTSCRIPT
GANDHIANA | ACADEMIA
Fury of the Scholar IgnoredWhen scholars spar over assessments of their work, especially in a postmodern, smotheringly deconstructive fashion, we yearn for the concise postscript to end all arguments.
Zaheer Baber
Time was when book reviews were indeed nothing more than just pithy or meandering summaries, followed by an evaluation of the main arguments of the book in
roughly about a thousand words or so. Indeed, a book deemed worthless usually merited a substantially briefer review, followed by a dismissal or, worse, damned by faint praise.
The goal of a review is usually to simultaneously expose the book to a wider audience and to help readers decide whether or not it is worth their time and money. Academic
FEBRUARY 13, 2016 vol lI no 7 EPW Economic & Political Weekly88
POSTSCRIPT
ACADEMIA
protocols—not always followed, of course—also require that reviewers should be disinterested parties. Reviewers usually avoid, or at least should avoid, taking on books that have ex-tensive discussions or critiques of their own work. Nor are reviewers expected to constantly refer to their existing work, let alone advertise their future publication projects and plans. And if references to such projects are absolutely essen-tial to the review at hand, self-advertising in the form of pro-viding details of what the reviewer does outside the university to ostensibly make the world a bet-ter place is quite out of order.
To be sure, existing conventions, traditions and expectations can, and do, often mask and legitimise status inequalities that need to be questioned or—to deploy an eminently fashionable term that shows no signs of ever going out of style—“interrogated.” Coming from someone who is frequently labelled as one of the world’s leading literary critics and deconstruc-tionists, Gayatri Spivak’s “review” of sociologist Vivek Chibber’s, Postcolonial Theory and the Specter of Capital (2013)—in the Cambridge Review of International Affairs (2014)—unsur-prisingly appears to deconstruct and subvert with a venge-ance all these possibly repressive, dogmatic and outdated scholarly protocols.
Thus, instead of a page or two, Spivak’s review of a book that she believes is completely devoid of any merit is all of 15 printed pages. Perhaps it was meant to be a review essay. Throughout the review, Spivak ridicules and mocks Chibber, alternating between labelling him as “childish” and “boyish” to calling him “Professor” and gurumahashay (schoolmaster), while also relentlessly admonishing him for daring to discuss a body of work that he is presumably incapable of understanding.
The review is clearly not at all about the book as such but is, instead, all about putting Chibber in his place. Evidently, a nerve has been stomped upon. Deploying her signature style, Spivak, of course, refers to herself in the third person, and that too no less than seven times; and the refer-ences are not just to her published works, but also to a “forthcom-ing” publication.
Vivek Chibber can, needless to add, more than defend his argu-ments, as indeed he does in the same issue of the journal. Following the conventional, undeconstructed, garden-variety academic protocols that Spivak will have nothing to do with, he responds to her review without believing that his argument will end all arguments. The tone of his response to Spivak’s fury—a response that Chibber had
predicted in his book—like his book itself is remarkably restrained and matter-of-fact. There is no need to reiterate Chibber’s response in detail. Whether his arguments are convincing or not, is not at all the point. He hits the prover-bial nail on the head when he observes: “Spivak, however, writes in the manner of someone long accustomed to treat-ing those around her as supplicants, not colleagues…The imperious tone, the constant reminder of status, whether
based on age or academic and social standing, is quite shocking to witness in an academic paper…The only place I have ever seen it before was while growing up in India, where it was used with servants and children to remind them of their place in the order of things.”
As he makes it clear, Chibber is more than open to a critique of his critique. Spivak mocks him, however—surprisingly for a scholar who presum-
ably would welcome a multiplicity of interpretations of texts—by claiming: “It is also clear that Chibber has not read the Subaltern Studies material clearly.” Speaking of “clearly,” it is clear that many non-academic factors seem to have triggered Spivak’s ire. This is, of course, nothing more than scattered speculation, not by any means a claim to truth with a capital or even a lower-case “t”.
At the very outset of her review, Spivak is very anxious and determined to remind readers of her pre-eminent role as one of the co-originators of postcolonial theory. On the very fi rst page of her review, she points out: “Specifi cally, ‘postcolonial’ theory, arising in the United States (US) and UK with Gayatri Spivak and Homi Bhabha, related back to Edward Said’s Orientalism…Richard Hoggart and Stuart Hall.” She ends her review with a reference to “…my own confl ictual but instructive experience with this group [Subaltern Studies]” and the very revealing remark that she could comment in more detail on a particular point: “But since I have no foothold in this book except as an object of mockery, I think that would be, to quote the lan-guage understood by Chibber and his cohorts, bad form.”
It is quite possible—but impossi-ble to “prove” in a positivist mode—that Spivak’s mockery of Chibber was triggered by the fact that the work of one of the self-identifi ed co-founders and leading light of an entire tradition was mentioned only passing in a book with “post-colonial theory” in its title. Possi-bly a case of academia hath no fury as a scholar ignored.
Time was when postscripts con-sisted of no more than a couple of sentences, but that is possibly a discussion for another day…
Zaheer Baber ([email protected]) teaches sociology at the University of Toronto.
Reviewers usually avoid, or at least
should avoid, taking on books
that have extensive discussions or
critiques of their own work
LAST LINES
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BHAGIRATH HUMAN RIGHTS AWARD
Centre for Social Studies (CSS), Surat has instituted Bhagirath Human Rights Award to be given to a practicing lawyer for her/his contribution in the fi eld of human rights of the oppressed. The CSS, Surat invites nominations for the Award. The nominations need to include detailed CV focusing on the candidate’s contribution to the fi eld of Human Rights in India. The last date of nomination is 15th April 2016. The Award Committee is comprised of – Justice Shri R.A. Mehta; Professor Upendra Baxi; and Shri Girish Patel. The amount of the award would be Rs.25,000/- and a citation. For full details, please visit our website: http://css.ac.in.
Send nomination with full details to – The Director, Centre for Social Studies, Veer Narmad South Gujarat University Campus,
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RURAL LIVELIHOODS AND WELL-BEING
An ICSSR Sponsored Orientation Programme for ST and other Marginalized Groups to be held at the
Institute of Economic Growth, New Delhi from May 3-7, 2016
Applications are invited from suitable candidates for participation in Orientation Programme titled “Rural Livelihoods and Well-Being” for research scholars and faculty members belonging to ST and other marginalized groups to be held at the Institute of Economic Growth (IEG), New Delhi from May 3-7, 2016. Candidates, including college / university teachers/ members of recognized institutions pursuing their PhD or engaged in or planning to engage themselves in research work in Social Science can apply. Those interested should send their CV, 750-1000 word note on their current research and community certifi cate to [email protected]. The academic career, competence and motivation of the candidates and research in the mentioned area will form the basis of selection. All selected outstation candidates will be provided travel allowance of 2nd class return rail fare and free boarding and lodging in the institute during the course. The last date for submission of application with all details is March 8, 2016. The selected candidates will be informed by March 25, 2016.
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Centre for Economic and Social Studies, Hyderabad is organizing a fi ve days’ Training Programme on Migration Studies sponsored by the Indian Council of Social Science Research, New Delhi for Research Scholars and Faculty Members of Social Science in Universities/Institutions/Colleges of the country during 21-25 March 2016. Interested candidates belonging to Scheduled Tribe and Other Marginalized Groups (SC/OBC/Minorities) are eligible to apply on the prescribed application form. Eligible candidates can send their application form along with a brief C.V to the Course Director at: [email protected] on or before February 29, 2016. For further details, visit our website: www.cess.ac.in; Contact: (M) +91-8374314278.
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Call for Papers
University of Calcutta – Women’s Studies Research Centre and Department of Economics, in collaboration with Friedrich-Ebert-Stiftung, India Offi ce is organizing a national workshop on Women’s Employment and Economic Growth: Post 2015 Development Agenda in India, in May 2016. The organizers are inviting contributions from young research scholars working on related issues. For further details refer to the following websites:
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Plutocracy, Populism and the 2016 American Election
Kaushik Sunder Rajan ([email protected]) teaches at the Department of Anthropology,University of Chicago.
Even as the plutocracies of the Republican and Democratic Party represent the same kinds ofpower interests, there are huge policy differences between even the most corporatist Democratsand the most “moderate” Republicans, especially on social issues. The new President, fromwhichever party, will have to address the power that corporate and financial institutions wield overpolitics in the United States.
When Donald Trump announced his candidacy for the Republican Party’s presidential nominationlast summer, many dismissed him as a joke. Yet he has become the frontrunner for his party’snomination by engaging in explicit racial demagoguery, calling entire groups of people rapists,terrorists or criminals. Such rhetoric was unacceptable in American public discourse. Even asGeorge W Bush was commencing his aggressive wars after 9/11, he was emphatic in his publicstatements that Islam as a religion was not to blame and that Muslims in America should not betargeted. Trump espouses no such reservations.
There is a consensus amongst political pundits that even if he was to win the nomination, Trump’sviews are too extreme to win a general election. This may be naïve: right-wing politicians whoproject themselves as strong men often do better than conventional wisdom expects. Few people,even in the Bharatiya Janata Party (BJP), expected the mandate with which Narendra Modi came topower in 2014. A more apt parallel might be with Ronald Reagan, who at the end of 1979 wasconsidered too right-wing for the American mainstream and a bit of a buffoon. Not only did Reagansweep to the Presidency, he changed the contours of American politics for a generation to come.The Trump candidacy is by now a real enough political phenomenon that one cannot discount thepossibility of a Trump presidency and all its attendant consequences.
While Trump’s campaign has been cynical and his core constituency deeply xenophobic,understanding its success must go beyond romanticising or vilifying the candidate himself toaccounting for the articulation of three historical movements: first, the transformation of Americafrom an industrial to a service economy that has privileged the educated elite and limited thepossibilities of social mobility for those without higher education; second, the growing economicand political power of corporate and financial capital, leading to levels of economic inequality andinequality of opportunity that have not been seen since the Great Depression; and third, themassive demographic transformations in the country, which will see America become a Hispanic-majority nation within the next three decades.
Trump’s candidacy is the ugly confluence of these three trajectories. There is a second morehopeful trajectory that this confluence results in, which is playing out in the equally meteoric rise ofBernie Sanders as a serious candidate for the Democratic Party nomination. I will first elaborateupon the anatomy of right-wing politics that leads to Trump’s popularity, before reflecting upon theprogressive, alternative trajectory that Sanders represents.
Anatomy of the American Political Right
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Even as political pundits dismiss Trump as being unelectable in a general election, there is asegment that worries about the possibility of a Trump presidency under certain circumstances. Thisis based on Trump’s consistent poll numbers through the Republican primary campaign, HillaryClinton’s ability to polarise an electorate, and the boost that a Trump candidacy would receive inthe event of an Islamist terrorist attack in the United States in 2016, which would potentiallybroaden the anti-Muslim sentiment that he is preaching. While these are genuine concerns, suchpoll-driven analysis overestimates white, middle-class voter preference, and assumes a rationalvoter weighing issues, strengths and weaknesses of different candidates. Electoral politicaldynamics in America today are not thus constituted. Most likely voters are already committed toone party or another, a function of the complete polarisation of American politics over the past twodecades. The mythic “independent” voter considered pivotal to elections in the 1990s and early2000s is today largely irrelevant, even if s/he exists.
This election will instead be decided by the power centres within the two parties. In each case,these are constituted by a plutocratic establishment that is in tension with a politically engaged anddemanding populist grassroots base. While divisions between these factions in the DemocraticParty are substantive, they are also for the most part civil. On the other hand, the differencesbetween the factions of the Republican Party are threatening to tear it apart. It is worth unpackingthe anatomy of right-wing representative politics in America today, and the dangerous anduntenable contradictions it faces.
The Reagan counter-revolution was configured by the coming together of three forces. At thecentre were big money, big business and corporate power. This was articulated by the rising powerof evangelical Christianity, and fueled by the growth of right-wing media. At the edges of thisalliance was the far-right militia, often constituted by disgruntled white men who felt like they werelosing their positions of traditional entitlement in a demographically changing country; and whowere losing their capacity for economic stability and mobility in a country transformed bycorporatised agricultural and deindustrialised service economies. Through the 1980s and 1990s,such militias were strongest in those parts of the country, such as the South and West, whereorganised labour was weakest.
While there was broad ideological kinship between the plutocracy and evangelicals on the onehand, and the xenophobic militia on the other, it took the form of a “centre-fringe” perception,where the latter was tolerated, even encouraged, but kept at arm’s length. Now this “fringe”demographic constitutes the heart of Trump’s support base and threatens to constitute the heart ofthe Republican Party as well. Furthermore, it is not just constituted by those who are formallyassociated with white supremacist or neo-Nazi ideologies, as was usually the case with fringemilitias. It draws from a much larger (but still exclusively white) sociological base, roughly four-fifths of which is constituted by people without a high school degree. What unites this base is not somuch ideological purity as economic disenfranchisement that gets coded as socialdisenfranchisement.
At the heart of this is the spread of economic immobility in the US over the past three decades. Anearlier broad-based meritocracy, which allowed for social mobility across domains, has beenreplaced by a much narrower-based meritocracy that privileges an educated elite equipped forwork in the knowledge/service economy, alongside an informalised labour force for low-payingmanual and service work that is increasingly drawn from immigrant populations. Blue-collar whiteAmericans have been severely impacted by this transformation; they see their jobs disappearing,even as they find themselves without the skills to succeed in the new economy.
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In addition, the attack on trade unions alongside large-scale deindustrialisation in the mid-West hastaken away a major source of political community for industrial workers, at the very moment whentheir livelihoods have come to be more precarious than ever. What is left is a once-sociallyprivileged but now economically disenfranchised demographic that sees no opportunity, onlythreat—to both livelihood and entitlement -- often from others who do not look like them. Thecynicism with which Trump has parlayed this into a politics of fear and hate is undoubtedlyrepugnant. However, the structural ingredients for this were actively cultivated by the RepublicanParty as a central element of the Reagan counter-revolution.
Hence, the pious denunciation of Trump’s rhetoric by the Republican Party establishment is not arepudiation of what he says as much as it is fear that he is saying these things in ways that thetraditional party plutocracy is unable to control. Trump represents the Frankensteinian monsterthey created, which now threatens to devour them. The story of the Trump-possessed RepublicanParty is one of a corporatist party that has lost control of its xenophobic foot-soldiers, ironicallyengineered by a New York-based corporate mogul.
Further, Trump’s base does not adhere to the ideological purity and corporatist extremism of theparty plutocracy on core economic issues. For instance, many Trump supporters are notevangelicals. Cutting government programmes, which is the Holy Grail of some of the mostinfluential power brokers in the Party, is not such a vital concern for them. (In his campaignspeeches, Trump has even promised to grow social security, which Republicans have sought to doaway with for at least three decades). What we are seeing therefore is a dissolution of the right-wing social coalition that has existed since Reagan, the beginning of the end of the RepublicanParty as we know it.
Regardless of who wins the nomination, winning the general election is extremely difficult for theRepublicans because of the other major reconfiguration in American politics: the growing clout ofthe Hispanic electorate, the largest growing demographic in the US. In 2012, Obama won 71% ofthe Hispanic vote. If that margin is maintained by the Democratic candidate in 2016, then theRepublican candidate will have to win the white vote by an approximately 30% margin in order towin the Presidency—a virtually insurmountable margin of electoral math. This math is not helpedby Trump, whose single-point harping on immigration is virtually ensuring that the Democraticcandidate will win an even larger chunk of the Hispanic vote than Obama did. Trump’s campaignhas put the Republican Party between a rock and a hard place. Their own base wants walls anddeportation, and anything less will be seen as betrayal. Yet pandering to that base will ensuredefeat, regardless of white middle-class voter sentiment, not just in this election but for generationsto come.
Sanders and the Democratic Primary
Just because the Democrats have the demographic ingredients for a long-term hold on thePresidency does not mean that they will make the most of it. Here, one must understand thesignificance of the second populist resurgence happening in America alongside Trump’s, which isBernie Sanders’ campaign. This represents emergent trajectories of progressive politics thatforegrounds economic and racial inequality, and is born out of or in dialogue with social movementssuch as Occupy Wall Street and Black Lives Matter. While grassroots progressives mobilising forSanders may not detest Clinton the way Tea Party activists detest establishment Republicancandidates, this too is a serious intra-party battle between plutocracy and populism. For all hersocial liberalism, Clinton too is the candidate of a powerful plutocracy, and it is estimated that over80% of her donations come from big donors.
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The Sanders campaign has brought the burgeoning national debate on economic inequality into theheart of Democratic Party politics. This is not the crusade of a single man, but a reflection of onecore constituency of the party, which finds expression in the Senate through Elizabeth Warren andher allies, and increasingly in urban politics (Bill de Blasio’s tenure as mayor of New York beingespecially significant). But corporate capital has quietly engineered a coup d’etat in America overthe past four decades, and the Democratic Party is fundamentally a corporatist party. This is a faceof the Party that Barack Obama, for all his social idealism, immediately made peace with. Clinton isan establishment candidate who will do important things in furthering social equality, but in waysthat will at best be mildly reformist of economic structures based on corporate power. The degreeto which the Democrats can take advantage of electoral demographics over the long term willdepend significantly upon the extent to which such a reformist corporatist agenda can successfullyaddress structures of economic inequality.
Conclusions
Even as the plutocracies of the two parties represent the same kinds of power interests, there arehuge policy differences between even the most corporatist Democrats and the most “moderate”Republicans, especially on social issues. Even if Clinton and establishment Republicans might standwith some of the same interests, they stand for very different things. Nonetheless, unless the holdthat corporate and financial power has come to exercise on the American state is challenged, thePresidency itself will have a diminished role in social and economic transformation. This can onlylead to the eruption of populist forms of politics that are ever harder to control or predict, in waysthat put representative democracy itself at risk.
The legislature in America has already become a broken institution, distorted by decades ofpolitical gerrymandering and pandering to the most extremist elements of the Republican baseafter the Tea Party takeover of Congress in 2010. Ideally, executive power in a Presidential systemshould represent popular interests, with the potential to historically transform the direction ofnational politics in ways that broadly represents the will of the majority. Legislative power is meantto temper that and provide a space whereby the translation of executive vision into law and policyhappens through dialogue, negotiation and compromise. America today sees an executive capturedby corporate interests and a legislature paralysed by uncompromising ideological purity. It is sucha structure that makes Sanders’ call for political revolution ever more urgent and important, evenas it renders his vision unrealisable as policy.
In the “Eighteenth Brumaire of Louis Bonaparte”, Karl Marx reminded us that while men makehistory, it is a function of the forces and relations of production prevalent at the time. There isuncanny congruence between the contemporary American political economic structures to thosethat Marx described for mid-19th century France—division between country and city, a capitalisttakeover of the state, the threat of genuine structural transformation driven by the working class,consolidations and divisions between different forces of capital, a dysfunctional legislature, amobilised lumpen proletariat, and a peasantry disenfranchised by changing economic conditionsand reposing faith in a counter-revolutionary personage. Trump is the Bonapartist figure risingfrom the ashes of such a time, even as Sanders keeps open the possibility of a populism that leadsto stronger, not weaker, structures of democracy.
Tags: USAUnited States of AmericaRepublican Party
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Hillary ClintonBill ClintonDemocratBernie SandersDonald TrumpBarrack ObamaChristianity
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Centrist Polity, Decentred Politics
Ajay Gudavarthy ([email protected]) teaches at the Centre for Political Studies, JawaharlalNehru University, New Delhi.
How has Telangana fared in the last two years? The author’s field visit suggests that water andagrarian distress continue to be an issue, with Muslims and the youth disillusioned with thegovernment in the new state.
In a few months the new state of Telangana will be two years old. Most of the states formedrecently on the plank of development and not on linguistic criterion have not fared well.Chattisgarh and Jharkhand, formed in the name of the tribals, have not benefitted the tribals in anyvisible measure. Telangana was formed after a prolonged agitation and popular protest, largely as afall out of deep agrarian crisis, growing unemployment and cultural denigration. How is Telanganadoing now?
Distress Symbols
The most visible change has been in the situation regarding power supply. Power supply, that wasnot only irregular but also contributed to agrarian crisis, has improved dramatically. Today allvillages get uninterrupted power supply to the households and six hours for the agriculturalpurposes, which the new government has promised to increase to nine hours in the next fewmonths. After assuming power the government had immediately announced a loan waiver up to 1lakh rupees per family. However this was revised to be waived in installments of 25% every sixmonths. According to the farmers this has not really helped them to get rid of the loans. Insteadthey continue to reel under debts as most of the waiver is being used to pay the interests and theprinciple amount is being repaid only partially in small amounts. Further, farmers pointed out thatthere is no policy for providing support price, or subsidies on in-puts such as fertilizers and nocompensation is being provided for crop failure.
Water continues to be a major problem in much of Telangana. This is because most of the projectsare either contested under water tribunal or many of the pending projects have not been cleared orcompleted. Government has instead taken up the project called “Mission Kakatiya” under which oldlakes, ponds and other water bodies that had dried up are re-dug, hoping that a good monsoon willfill them up. In a few districts free borewells are being supplied, however the ground water level istoo low (in most cases bores go as deep as 800 m to strike water). Similarly, under “MissionBhagiratha” the Telangana Rashtra Samithi (TRS) government has promised tap water for everyhousehold.
Labour and wages remain the other major problems in the agrarian sector. While wages have notrisen for the landless after the formation of Telangana, farmers holding land continue to complainabout the lack of the availability of labour making agriculture untenable. Many of the farmers nowdemand that the labour under Mahatma Gandhi National Rural Employment Guarantee Act(MGNREGA) needs to be shifted for agricultural purposes instead of other developmental activities,which they believe in any case, are not of much use. The policy of Re 1/kg rice scheme with 6 kg ofrice per person is a very effective scheme providing great relief to the Below Poverty Line (BPL)families. Along with Re 1/kg rice scheme, the government’s pension scheme is also popular in the
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rural hinterlands of Telangana. The new government has increased the pension amount from Rs200 to Rs 1000. However, the previous government under Rajsekhar Reddy provided pension to allvillagers above the age of 65. The new government has introduced the additional criterion of onlythose holding below 7 acres of land as being eligible for pension. This has burdened many of theoctogenarians in the villages as the land they hold is being tilled and distributed among the sonssince they are not fit enough to do it themselves. While the sons do not share the profits thegovernment has made them ineligible for pension. Many of the old even complained of livingwithout a roof over their heads either in public places like the temples or with other relatives. Theintergenerational tension and abandoning of the old seemed to be a fast enveloping problem inmuch of Telangana. In the last one year, after the formation of Telangana close to 900 farmers havecommitted suicides, only next to Maharashtra where 2568 farmers committed suicide. Agrariancrisis was the single most important reason why the demand for Telangana erupted; questions needto be raised if it continues to be of priority for the new government. While it has disbursed a rangeof welfare oriented policies (most of which are a continuation of the policies formulated by theprevious Rajsekhar Reddy’s government) the agrarian crisis is yet to be averted and it needs somepressing and fast paced steps from the government to avert further deaths of the farmers.
Marginalised Groups
Similarly, alongside the farmers are the youth and the Muslims, two other social groups thatremain marginalised in Telangana. Under the previous Rajsekhar Reddy’s government Muslimswere awarded 4% reservations as part of the Other Backward Class (OBC) reservations. The newTRS government has promised to enhance it to 12%. The Subramanium Committee instituted in2007 identified 28 groups out of which 14 groups were made ineligible for reservations due to theirsuperior social status, including sects such as Sheiks, Sayeeds, Pathans, among others. These, in asense, are perhaps few communities that can afford higher education but having been denied theprovision of reservations, we find almost 80% drop outs among Muslims. There is an impendingneed to provide educational loans, and build hostels, which contributed in a big way towardsimproving literacy among the scheduled castes (SC) and scheduled tribes (STs). The most popularpolicy that has struck a chord among the Muslims is Shaadi Mubarak where the government offersRs 50,000 to perform the marriage of girls from economically weaker sections (the counter part forthe Hindus is called “Kalyana Laxmi,” with similar grant). Most of the Muslims continue to be self-employed and without land holding in the rural hinterlands of Telangana. They continue to liveunder conditions of social segregation, fear and many a time implicated in false cases of crime.Culturally, Telangana had a strong element of Sufi tradition, and even today large number ofMuslims visit dargahs along with Hindus. Perhaps, political parties such as the All India Majlis-e-Ittehadul Muslimeen (MIM) are not the best representatives of this tradition. It is an everydaytussle between the social and political worlds. It is in this context one can read the recent ChandiYagam that the chief Minister KCR performed at a whopping cost of 7 crores in order to balance hispro-Muslim policies, including appointing a Muslim as the deputy CM, with the purported interestsand imagination of the majority Hindu community. Its also a move to capture the space that BJP-RSS (Bharatiya Janata Party-Rashtriya Swayamsevak Sangh) combine has been laboriously buildingwith manufactured issues of Charminar being built over the destruction of a temple and recallingthe memory of Nizam’s rule and role of Razakars in wantonly using physical force against theHindus.
Finally, the youth had played a pivotal role in leading the struggle for a separate state, includingmany who committed suicide. They were aspiring for a better future in the new state. There havebeen no new scholarships and the announced policy of free “KG to PG” education has not taken off
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on a serious note. The astounding cost of education in private institutions has not been regulated asit was time and again debated during the heydays of the movement for a separate state. There isstill a high premium among the youth in smaller towns and villages to get government jobs—policeconstables and school teachers being the most sought after. Education is certainly not in thepriority list of the new government and employment in both public and private sector is difficultand slow to expand. Of all the three groups youth remain perhaps the most disillusioned after theformation of the new state.
Conclusions
The dynamics in Telangana are part of a larger process across the country. It is the tensionbetween growing aspirations and limited capacity of the state to deliver; people are launching bigtime struggles for small time benefits; deeper social fragmentation is being compensated bytenuous political alliances. The idealism that breathed power into a struggle for a separate state isconverting into everyday pragmatism. There seem to be very few options outside of this process.
Tags: TelanganaChhattisgarhJharkhandTelangana Rashtra SamithiTRSMahatma Gandhi National Rural Employment Guarantee ActMGNREGARajsekhar ReddyAll India Majlis-e-Ittehadul MuslimeenNizamHyderabad
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