Inequality,Inefficiency,andtheChallengesforSocialDemocracyinIndiasEconomic

Transition

By

PranabBardhan

ITheVariousInequitiesandDeprivations

Differentpeoplemeandifferentthingsbysocialdemocracy.Withoutgoingintothatdiscussion
letmestartbybrieflydescribingwhatIdmeanbysocialdemocracyinthispaperandthengo
ontoanalyzingthevariouschallengesthattheIndianeconomyfacesinbringingitabout.

Socialdemocracyforthispaperhasthreeessentialingredients:

(1) Democracyprimarilyintheformofmeaningfulpoliticalcompetition,effective
accountabilitymechanisms,andsomebasichumanrights;

(2) Acompetitiveandincentivecompatibleeconomicsystemwithindividualproperty
rightswithinreasonablebounds,andeconomiccoordinationmechanismsprovided
bymarkets,multitieredgovernmentaswellascommunityorganizations,with
thesemechanismsoperatingindifferentfieldsinmainlycomplementaryways;

(3) Aneffectiveandcomprehensivesystemofsocialprotectionforthegreatmassesof
peoplefromdeprivation,destitutionandvulnerabilitiestoindividualandsocialrisks
ofdifferentkinds.

InthispaperIshallkeep(1)and(2)largelyinthebackground,withoutagreatdealof
discussion,andlookatproblemsofachieving(3)underthecircumstances.EventhoughIam
fullyawarethatwehavemilestogoon(1)and(2),Indiaisatpresentparticularlyand
atrociouslydeficientin(3).Indiaistheworldslargestcountryofilliteratesandschooldropouts,
ofchildandmaternalmortality,largestnumberofstuntedandunderweightchildren,andthe

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largestincidenceofanemiaandTB,andtheoverwhelmingmajorityofpeoplelackinganyofthe
socialbenefitsthatareconsideredaspartofaminimumsocialsafetynet.Morethan400
millionpeoplehavelessthanwhatbyIndianofficialstandardswillbeconsideredthebarest
minimumpovertyline.Ifonetakesincomeinequality,orwhatismoreimportant,inequalityof
economicopportunity,Indianinequalityisoneofthehighestintheworld,contraryto
conventionalwisdom.InacountrylikeIndiainequalityofopportunitylargelydependson
distributionofland,ofeducation,andsocialidentityachildborninarurallandlessadivasi
(indigenous)familywithverylittlescopeforeducationwillbeseverelyhandicappedinherlife
chancesfornofaultofherown.

ItmaybewellknownthatlanddistributioninIndiaismuchmoreunequalthan,say,inChina
(thisispartlybecauseIndiahasamuchlargerlandlesspopulation).Butmostpeopleseemto
beunawarethatIndiaseducationalinequalityisoneoftheworstintheworld.Ifonemeasures
thisinequality,verycrudely,justbylookingattheyearsofschoolingintheadultpopulation,it
isworsethanthatinalmostallLatinAmericancountries,andsomeAfricancountries,notto
speakofChinaagain,thisispartlybecauseofIndiaslargeilliterateandnearilliterate
population.Takingalongview,whatismoreimportantthanstaticinequalityisinter
generationalmobility.Onthisquantitativeempiricalworkisratherscanty,butsocialmobility
maybeparticularlylowinIndia,partlynodoubtbecauseofthedeadeninglegacyofthesystem
ofcasteoppressionanddiscriminationinIndia(thoughthereissomeevidencethatsocial
mobilityisimprovingforsomeofthelowcastes).

Somepeoplethinkthatpreoccupationwithissuesofinequalitydeflectsattentionfrom
economicgrowthwhichiswhatmainlyalleviatespoverty,throughcreatingnewandbetterjobs
andgeneratingmorepublicrevenueforwelfareprogrammes.Buthowmuchofgrowthtrickles
downtothepooritselfdependsoninitialinequality(forexample,ithasbeenestimatedthat
thesameonepercentriseingrowthreducespovertybymuchlessinIndiathaninChinapartly
becauseofthehigherinequalityinIndia)andtheresultantdistributionofeconomicand
politicalpower.Besides,inequalityofopportunityitselfcanhaveseriousadverseeffectson
economicgrowth.Thisisparticularlyimportantwhentherearebarriersfacedbythepoorin

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landandcapitalmarketsandinskillacquisitionandincopingwithrisks,whichsharplyreducea
societyspotentialforproductiveinvestment,innovation,andhumanresourcedevelopment.
Theyoftenblockthecreationofsociallymoreefficientpropertyrights(forexample,inland
tenure)andinvestmentinhighriskbuthighreturninnovativeprojectsonthepartofsmall
producers.Inequalitythatkeepstheworkforcelargelyuneducatedandunhealthycannotbe
beneficialforprivatebusinesseither,apartfromthelawandorderproblemsthatinequality
generatedconflictsmaybringabout.Moreover,institutionalstructuresandopportunitiesfor
cooperativeproblemsolvingareoftenforegonebysocietiesthatarehighlypolarized.
SociologistshavenotedhowextremelyhierarchicaltheworkorganizationwithinIndian
factoriesis(oftenreflectingthesocialstratificationoutside),andthisisnotunrelatedtothelow
productivityofIndianfirmseveninsimpleproductionprocessescomparedtoothercountries,
andthesocialdistanceanddistrustbetweenmanagers,supervisersandjobbersontheone
handandthegreatmajorityofworkersunderminethecooperationthatisneededfordayto
dayshopfloorinnovationsthatcharacterizemoreproductiveworkplaces.Equityandefficiency
thusoftengotogether,contrarytotheoppositepresumptionofmuchoforthodoxeconomics.

Apartfromseveredeprivationsandhighinequalityofopportunity,anotherfeatureofthe
economythatraisesspecialchallengesforsocialdemocracyinIndiaisthatofallthemajor
developingcountriesIndiahasthelargestinformalsector,with94percentofthelabourforce
workingthere,mostofthemdailyfacingthebrutalinsecurityofnoretirement,disability,
unemploymentorhealthbenefits.Evenoutsidetheagriculturalsectormorethan80percent
ofthelabourforceisintheinformalsector.Thetinyminorityofformalsectorworkers(two
thirdsofthemgovernmentemployees)clingontotheirpaltryprivilegeswithnervousmilitancy,
astheyfacethesocialvertigooflookingonthevastmassesoftheunprotectedhuddleddown
below.Thisgreatvoid,theabsenceofevenarudimentaryframeworkofgeneralsocial
assistance,makestheimplementationofsocialprotectionasdifficultasitisurgent.

Theprocessofeconomicgrowthinaworldofglobalcompetitionhasmadethisworkeranxiety
andinsecuritymoreacute.Evenwhenmarketcompetitiondoesnotleadtonetjobloss,it
usuallycausesagreatdealofjobchurninganddisplacement.Eveninrichcountrieswith

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relativelyweaksafetynets(liketheUS,incontrasttotheNordiccountries)thisleadstostiff
workingclassoppositiontoglobalcompetition.Thereissomeevidencethatincreasedglobal
competitioninthelasttwodecadeshaswipedoutsomeofthelowproductivitytinyinformal
firmsinIndianmanufacturing,whomayhavethencrowdedthenontradedsectors.Itisnot
surprisingthatinIndiawhereanysafetynet(outsidethediminishingsupportofextended
familiesandkinshipgroups)isabsentfortheoverwhelmingmajorityofpeople,mostsurvey
evidencesuggeststhatmarketreformsarevastlyunpopular.Yetthesereformsareimportant
foruncloggingthechannelsofentrepreneurshipandinnovation.

Thematterismademuchworsebythefactthat,unlikeinChinaandVietnamwheretheinitial
growthspurthasbeeninlabourintensiveindustries,inIndiathesuccessstoriessofarhave
beenlargelyinskillintensive(software,businessprocessing,pharmaceuticals)orcapital
intensive(machinetools,vehiclesandcarparts)sectors,andasaresultthehigheconomic
growthhasnotresultedinalargeexpansionofjobprospectsforpoorunskilledworkers.The
publicpolicydeficienciesineducationandskillformationhavealsolimitedtheemployabilityof
thepoorworkersinmanyofthenewjobs.

Agrowthpatternthatisskillandcapitalintensiveobviouslyexacerbatestheproblemof
inequality.Inadditionthereisapeculiarbimodalityinthesizedistributionofmanufacturing
firmsinIndia;mostfirmsarebunchedatthelowerendwithverylowproductivity,paying
extremelylowwages,whereasatthehigherend(withamissingmiddle)ofthefirmsize
distributionwagespaidaremuchhigher.Thislargewageinequalityinthesameindustryadds
ontotheinequalitybetweencapitalandwageincomes.

Ontopofallthistherearetheusualprocessesofagglomerationeconomiesofscaleintheearly
stagesofgrowthwhichleadtoregionalandsectoralconcentrationresourcesandcapital
movetogrowthpoles,thepoorerareasfallbehind.Thelargeurbangrowthdrivenbysuch
agglomerationforcesthatIndiaisexpectinginthenexttwodecades,withtheurban
populationexpectedtoreach600million,willenhancethisinequality,apartfromstrainingthe
urbaninfrastructuretonearbreakingpointandstokingthenativistforcesinbigcitiesin
resistancetolargescalemigrationfromtherestofthecountry.Yettheproductivitygap

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betweentheruralandurbansectorsorbetweenagricultureandmanufacturingandservicesis
solargethatsuchtransitionwillbeinexorableintheprocessofeconomicgrowth.Insituations
whereeconomicgrowthinvolvesextractionandprocessingofmineralsfromlandcurrently
belongingtotheindigenouspeopleofIndiawhoareuprootedintheprocess,oracquisitionof
landingeneralfromthepeasantsforcommercialandindustrialdevelopment,agreat
distributiveconflictisalreadyshapingup,oftenturningintoviolence,ultimatelyturningonthe
questionoftheappropriatedistributionofthelargerentalincomefromscarceappreciating
resources,nowaccruingdisproportionatelytothecorporateoligarchy,realestatetycoons,the
miningmafia,andtheirpoliticalpatronsandcollaborators.

Itisinthislargercontextofthemountingforcesofinequalityanddisplacement,theneedfor
organizingaviablesystemofsocialprotection,alreadyratherenormous,isallthemore
desperate.

IIApproachestoSocialProtection:ACriticalAppraisal

IntheIndiandiscussiontherehavebeendifferentapproachestothequestionofhowtotackle
socialprotection.Averypopularapproachthesedaysistocouchitintermsofrights(tofood,
education,information,jobs,etc.),andthereisagreatdealofcommendableactivismonthis
front,andalreadysomeachievementstoshow,particularlyinthelandmarklegislationsonthe
righttoinformationandtoworkonpublicworksprojects(thoughtheirimplementationin
manystatesareasyetratherslowandfeeble,andfacingagreatdealofresistancefrom
bureaucrats,contractors,etc.).Thisapproachcan,attheminimum,servetoraise
consciousnessamongthepoorandvulnerableabouttheirentitlements,asensethattheyare
notmeresupplicantstothepoliticiansorbureaucrats,thatifthelatterfailthereisaccessto
courtstoenforcetheserights,andpublicinterestlitigationandcourtinjunctionsonthese
mattershaveattractedagreatdealofattention.

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Butatthesametimeoneshouldrecognizesomelimitstothisrightsbasedapproach.Ifthe
deliverystructureforimplementingsomeoftheserightsremainsasweakandcorruptasitis
now,merepromulgationofrightswillremainhollowandwill,afterapoint,generateagreat
dealofcynicism.Indianpublicarenaisalreadylitteredwithhundredsofunenforcedor
spasmodicallyenforcedcourtinjunctions,andthereissomedangeroftheproliferatingjudicial
activisminstretchingtheinterpretationoftheconstitutionalrighttolifeendingup,forallits
goodintentions,inunderminingthecredibilityandlegitimacyofthejudiciaryitself.

Forexample,iftherighttofoodisexertedwithnoconsiderationoftheefficiencyandcost
effectivenessofthewaysofimplementingit(likethecurrentPublicDistributionSystemPDS
whichinmanystatesisanenormousprojectoftheftandwastagearoughestimateisthat
lessthanaquarterofthesubsidizedfoodgrainsreachesthepoor),itisanunwarrantedand
unfairburdenontaxpayerswhofundthegallopingcosts.Inanycasetheprogrammeas
currentlyadministeredisweakestinthepoorestregionsthatneeditmost.Foodstampsthat
havebeenadvocatedfromtimetotimewillreducesomeofthewastageandtheftinthe
storageanddistributionbypublicagencies,butwillnoteliminatetheproblemsof(a)fraud
rampantinnonuniversalmeanstestedtargetinglikethattobelowpovertyline(BPL)people
and(b)thedevelopmentofsecondarymarketswheremerchantsbuyupthestampsin
exchangeofsome(smaller)cashinwhichcaseyoumightaswelldirectlygivepeoplecash
ratherthanstamps.TherecentRighttoEducationActdoesverylittleforthepoorqualityand
quantityofeducationservicesactuallyprovidedingovernmentschools(thatdrivechildrento
privateschoolseventhoughteacherstherearebyandlargelessqualifiedandlesswellpaid)or
aboutthenegligencewithwhichthenewpoorstudentsfoistedontheprivateschoolsarelikely
tobetreatedwithoutaproperqualityevaluationofschoolsinplace,ortheremedialeducation
thatthepoorperformingchildren(atprivateorgovernmentschools)andtheschooldropouts
desperatelyneed.

ThecurrentEmploymentGuaranteescheme,thelargestofitskindanywhereintheworld,for
allitsflaws(whichwouldhavebeenfarlessifaregularandinstitutionalizedsystemof
independentsocialauditswereinplace),providesapossiblefallbackoptionformanyable

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bodiedruraladultsforworkingonmostlyconstructionprojectsforaperiodof100daysevery
year(thoughthislimitof100daysandtimelypaymentofwageshavesofarbeenreachedonly
inveryfewareas),andthismayhavealreadyexertedsomepositiveindirecteffectsontherural
wageearnedbythepoorestpeople.Thisis,ofcourse,quitedifferentfromtherighttojoboften
demandedbyorganizedworkersintheformalsector.Therighttojob,ifnarrowlyinterpreted
asthesecurityonagivenjob,canconsiderablydistortthelabourmarket,ifitfreezestheability
oftheemployer(publicorprivate)toadjusttochangingconditionsintechnologyormarket,
thushurtingthewholeeconomy,andthejobprospectsoflessprivilegedworkers.Itisvery
importanttodistinguishbetweeneconomicsecurityandjobsecurity.Aworkershouldhavethe
righttoexpectfromsocietygeneraleconomicsecurity,butnotsecurityonagivenjob.Myown
empiricaljudgment,however,isthatstringentlabourlawsthatareaimedatensuringjob
securityinlargeindustrialfirmsmaynotbethemostimportantconstraintonIndianindustrial
growth;otherconstraintslikeinfrastructure,creditandmarketingmaybemoreimportantin
manycases,butthattheyconstituteaconstraintcannotbedenied.Thereisultimatelyno
alternativetoapackagedealbetweenemployersandorganizedworkers:allowingmore
flexibilityinhiringandfiringhastobecombinedwithareasonableschemeofunemployment
compensationoradjustmentassistance,fromanearmarkedfundtowhichemployersand
employeesshouldbothcontribute.NoIndianpoliticianhasyetgatheredthecourageor
imaginationtocomeupwithsuchapackagedeal.

Thedistinctionbetweeneconomicsecurityandsecurityofaparticularjob(usuallyintheformal
sector)alsobringstotheforegroundaparticularconflictamongworkerswhichorganizedtrade
unionswouldratherslurover.ItiswellknownthatsocialdemocracyinWesternEuropecame
outofahistoriccompromisebetweencapitalandlabour(thelattergetssociallyprotectedand
areasonableshareoftheeconomicpie,andinreturngivesupitsdemocraticpowerof
expropriatingtheformer,sothatitcancarryonitsinnovationsthatexpandthepie).InIndia
wheretheinformalsectorismassive,socialdemocracymayrequireanadditionalimplicit
compromiseinthelabourmarket,betweenformalandinformalworkerssinceinmanyways
theirinterestsmaybeinconflict(oneexampleisstringentjobprotectionofformalworkers
maybeattheexpenseofthepotentialexpansionofjobpossibilitiesforinformalworkers;

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anotherexampleisthatthegeneralstrikesandbandhsfrequentlycalledbyformalsector
unionsaspartoftheirorganizationalmuscleflexingparalysecitylifeandrobthedailyinformal
workersandstreetvendorsoftheirsubsistence).Besides,thestrongestorganizedworkersare
thoseinthepublicsectorservices,anditistheircorruptandcallousservicenondeliverywhich
thepoorinformalworkersaspotentialrecipientshavetofaceeveryday.

Ingeneraloneshouldnotlookatthesocialprotectionrightsinabstractionfromcosts(direct
andindirect),deliverymechanismsoreventheirpoliticalconstituency.Welldesigned,well
administered,costeffectiveprogrammesofimplementingsomebasicrightsgeneratemore
politicalsupportevenamongthosewhoarepayingforthem.Oneshould,ofcourse,mention
herethatonepositiveimplicationoftherightsapproachisthatofuniversalprinciplesand
standards,whichinsomecasesmayhelpbetteradministration.Forexample,ithasbeen
pointedoutthatthePDSforfoodgenerateslessmalfeasancewhenitisuniversal(asinTamil
Nadu);aswehaveindicatedbefore,whensomepeopleareexcludedunderatargetedsystem
ofdelivery,itleadstodualmarketsandmoreincentivesandopportunitiesforfraud,apartfrom
erodingitslargerpoliticalsupportbase.

Onuniversalisticprincipleofsocialprotectiononeofthecleanestandleastincentivedisruptive
ideas,bothethicallyandeconomicallycompelling,isthatofUniversalBasicIncome(UBI),under
whicheverybody,richorpoor,getsanunconditionalannual(orperiodic)incomesupplement.
Thisisanoldidea,originallyinspiredbysomeEuropeanutopiansocialistsinthe19thcentury,
triedunsuccessfullyinMcGovernsPresidentialcampaignintheUSAintheformofaproposed
demogrant,currentlysupportedbysomeGreenPartiesinEurope,andactuallyimplemented
innonsocialistresourcerichAlaskasince1999(intheformofanannualPermanentFund
Dividend).IntheWestthediscussioninoppositiontotheideausuallycentresaroundthe
encouragementthismaygivetoidlenessanddependencyandtheunfairnessofahandoutto
therichaswell.Ithinkweneedtoworrylessaboutidlenessinacountrywherethe
overwhelmingmajorityofthepeopleareextremelypoorandoverworked.Givingtotherichas
wellmaybefoundadministrativelytolerablebymanywhoknowtheformidableproblemsof
monitoringandcorruptioninIndiaintryingtotargetitonlytothepoor.Themainquestionis:if

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wewantittobeuniversal,canweaffordit?Ofcoursetheanswerdependsontheamountto
begivenout,ifthiswillbeareplacementfortheexistingtransferprogrammeswhichhavealot
ofwastageandmisappropriation,howtheproblemofmisappropriationofthebasicincome
supplementwillbehandled,etc.Letsmakesomebackoftheenvelopecalculations.

Supposeinacountryof1.2billionpeoplewewanttogiveouteveryyearRs.5,000toeach
family(assumedtohave5members).ThisamountstoRs.120thousandcrores(notcounting
administrativecosts,whichneednotbelarge,withelectronichelp).Letsassume,forthetime
being,thatwiththeforthcominginstallationoftheelectronicUniqueIdentificationSystem(UIS)
theadministrativecostsofthisunconditionaltransferprogramwillbeminimal.Letsnow
comparethissumofRs.120thousandcroreswithsomebenchmarkfigures.Thetotalestimates
ofhowmuchiscurrentlyspentbythegovernmentonalltheantipovertyprogramscombined
easilyexceedthisamount.Whatismoreimportantisthatthisamountismuchlessthanthe
totalsubsidiesthegovernmentgivesouttotherelativelyricheveryyear.Wedonothaveiron
cladestimatesofthelatter.TheNationalInstituteofPublicFinanceandPolicyhasfromtimeto
timeestimatedthetotalamountofsubsidies(implicitaswellasexplicit)givenoutbythe
centralandthestategovernments.Thiscomestoabout14percentofGDPeveryyear.These
subsidiesareclassifiedintomeritandnonmeritsubsidies.Withoutgoingintotheintricacies
ofthedefinitions,letussay,veryroughly,thatthenonmeritsubsidiesmostlygotothe
relativelyrich.Ofthe14percentofGDPintotalsubsidies,roughlytwothirdshavebeen
estimatedtobenonmeritsubsidies:thatcomestoabout9percentofGDP.Letusmakea
conservativeestimateandbringthisfiguredownto6percentofGDPasgoingtotherelatively
rich.In200910theannualGDPofIndiawasaboutRs.4500thousandcrores(at20045prices);
6percentofthiscomestoRs.270thousandcrores.Sowhatthegovernmentpaysoutas
subsidieseveryyeartotherelativelyrichismorethantwicetheamountitllneedtopayouta
basicincomesupplementofRs.5,000toeachfamily,richorpoor.Andifthisreplacessomeof
theexistingdysfunctionalprogrammes(likePDS)ornotveryeffectivecashtransfer
programmes(likeSGSYSwarnajayantiGramSwarojgarYojanaorIAYIndiraAwasYojana),
theincomesupplementscanbeevenlarger.Allthisisbasedonaveryroughandready

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calculationandoneshouldnottaketheestimatestooseriously,butitgivesussomesenseof
proportion.

Butarethepossibilitiesofmisappropriationthatafflictmostsocialprotectionprogrammesin
IndiaseriouslylowerwiththebasicincomesupplementideafortifiedwithUIS?Ifthemoneyis
depositedinanaccount(atanearbypostofficeorbank)fromwhichwithdrawalsrequirebio
metricidentification,andnomeanstestingorrichpoorclassificationisnecessary,manyofthe
currentproblemsoffraudandcorruptionandmanipulationofBPLcategoryarelikelyto
diminishconsiderably.Yetonecannotruleoutpossibilitiesofclerkswhodissuethewithdrawn
moneydemandingbribes,orlocalmusclemenregularlyextortingsomeofthecashfromthe
defenselessrecipient(likerobbersinmanycountriestakingtheirvictimstotheATMmachines
andforcingwithdrawals).Ofcourse,whenPDSgivesapoormansubsidizedfoodthatcanalso
berobbedandsoldinthemarket,butIsupposethelureofdirectcashmaybestrongerforthe
criminals.Similarly,chancesofalcoholicsanddrugaddictrecipientsblowingthecasharea
problemthatworriesmanycriticsofsuchprogrammes.Ofcoursetherearetwokindsof
reactiontothis.Onekindisthelibertarianone,sayingthatweshouldletpeopledecidehow
theywanttospendthemoney,bearingtheconsequencesoftheirdecisionispartofthe
responsibilitythateveryindividualhastotake,etc.Theotheristhesoftpaternalistickind,
tryingtominimizetheproblembyhandingoverthemoneytotheusuallymoreresponsible
femaleadultinthehousehold,devisingallkindsofgoodspecificvouchers,etc.Inacountry
wherewomenandchildrenareamongthemostdeprivedintheusualwayahouseholdisrun,
andchildandmaternalmortalityandmalnutritionareamongtheworstintheworld,concerns
abouthowunequallytheunconditionalcashtransferisspentbythefamilyaretobeexpected
andthemattermaynotbeleftsimplytothemercyofindividualresponsibility.

Moreimportantly,justhandingovermoremoneytothepoorresolvesonlypart(thefinancial
part)ofthesocialprotectiontheyneed.Aspettyproducerstheyalsoneedotherkindsof
assistance(knowledge,skills,marketingconnections,etc.)oraspatientstheyneedinformation
aboutdoctorquality,healthpractices,nutritionandsanitation,andsoon.Intheurbanslums

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wheretheruralkingroupsupportstructuresareweaker,socialprotectionhasalsotoinvolve
activesocialsupportstructuresagainstviolence,drugs,familybreakdowns,juvenile
delinquency,etc.

InanycaseitisprobablyhighlyunrealistictoexpectthattherelativelyrichinIndiawilleasily
giveuponmuchofthesubsidiestheyenjoyorthatthevestedintereststhathaveaccumulated
aroundlongstandingwastefulprogrammeslikePDSwillallowanythingmorethanmoderate
tinkering.Soproposalslikeunconditionalcashtransfersoruniversalbasicincomesupplements
areunlikelytoflyinthepoliticsoftheforeseeablefuture,asthequestionofcanweafford
suchprogrammes?willremainunderthosepoliticalconstraints,eventhough,aswehaveseen,
inprincipleitisresolvable.Newprogrammesofsocialprotectionwithagreatdealoftargeting
(withlowercostsbutalsomoreleakages)andsomeadditionalgarneringofresourcesaremore
likelytobeimplemented.Oneclassofsuchprogrammesisthatofconditionalcashtransfers,
withtheaddedweaponofUIS.InsomesensetheRuralEmploymentGuaranteeisonesuch
programme,ofcashconditionalonwork,withselftargetingsavingsomeadministrativecosts
andleakageasthenonpoorwillnotusuallywanttoworkonsuchmanual,oftenback
breaking,constructionworks.UISmayreduceagreatdealofcurrentleakageintheformof
falsemusterrollsofworkers.Inthedeliveryofsocialservices,nothingonthescaleof
OportunidadesinMexicoorBolsaFamiliainBrazilhasyetbeenattemptedinIndia.Mostofthe
conditionalcashtransferprogrammesfortheseservicesinIndiahavebeenrelativelysmalland
aimedatensuringthesurvivalofgirlchildren(andtheirmothersatthetimeofbirth),andtheir
continuededucationinschoolsandinraisingtheirageatmarriage.Wedonotyethaveenough
rigorousevaluationoftheseprogrammes.

Ingeneral,themainpresumptionofconditionaltransferprogrammesissomewhat
paternalistic:lefttothemselvesthepoordonotexertenougheffortinsendingtheirchildrento
school,healthclinics,immunizationcenters,etc.Sotransferprogrammestrytoinducethem
withcontingenttransfers.Thereisalargeadministrativecostinmonitoringandenforcingthe
stipulatedconditions.Inanycase,suchdemandsidedinterventions(inducingthepoorto

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demandtheservices)donotsolvethesupplysideproblemswhicharesevereinIndia:not
enoughschoolsorhealthclinics,facilities,qualityteachersordoctors,teacheranddoctor
absenteeism,etc.Ofcourse,onthesupplyside,ourbureaucracyisoftennotmindfulof(or
interestedin)thefactthatthegovernmentmaybethefinancierbutneednotbetheactual
supplierandcanworkoutallkindsofinnovativesolutions.Forexample,itcanfinancethe
educationservicesbutoutsourcesomeofthem(asinthecaseofcharterschoolsintheUS);just
asinthecaseofPDS,theFoodCorporationofIndiacanoutsourceitswarehousingtoprivate
companies,insteadoflettingitsprocuredgrainsrotoutside(aboutonequarterofthetotalin
recentmonths)forlackofpublicwarehousingspace.

IIIGovernanceIssuesinSocialProtection

Intheprevioussectionwediscussedtheprosandconsofdifferentapproachestosocial
protectionintheIndiancontext.Inthissectionwediscusssomegenericgovernanceissuesthat
ariseinanyschemeofsocialprotectionandareparticularlyacuteinIndia.First,letustakeup
thedeliverymechanismitself.Iftheservicesaretobeprovidedbythegovernment,arethere
enoughincentivesonthepartofthebureaucracy?IntheIndiancivilservice(whichhasoften
beendescribedasneithermuchserviceorientednorverycivil)rewardsarenotingeneral
performancebased,promotionsareoftenmainlysenioritybased.Frequenttransfers,
sometimesarbitrarilydeterminedbythepoliticalbosses,discouragethedevelopmentofany
stakeinanyparticularlocalityofservice.Badperformanceisveryseldompunished;inanycase
themeasurementofperformanceisnoisyparticularlywhenthequalityofserviceis
necessarilymultidimensional.Thispromotesarampantcultureofimpunity.Theschool
teachersanddoctorsandnursesarenotpunishedforthederelictionoftheirduties,their
salariesandpromotionsaredecidedfromabove,notbythelocalpeoplewhobearthebrunt.

Thisobviouslysuggeststheneedfordecentralizationandaccountabilitydownwards.Infact
thereissomeevidencethatinsomecases(e.g.inNagaland)whereevenaverysmallfractionof

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theteacherssalarywaspaidbythelocalpanchayatorvillagecouncil,itimmediatelyledtoa
significantimprovementinservices.ButinmostpartsofIndia,whilelocalelectionsarenow
regularlyheld,effectivedecentralizationismissing,onaccountofaseveredearthofdevolved
fundsordelegatedpowerorappropriateprofessionalpersonnel.Localelectionsareusually
foughtonsupralocalissues,andmoreoftenthannotthestatelevelpoliticiansand
bureaucratshijacktheprocessofmandateddevolution.Suchhijackingismadeeasierbythe
lackofinnerpartydemocracyinalmostallpoliticalparties,sothatlocalpoliticalleadersareat
themercyofthehighertierleadership.IthasnotbeenwidelyrecognizedinIndiahowthelack
ofinnerpartydemocracy,apartfrommakingpoliticalpartiesstructurallyundemocratic,hasthe
sideeffectofcorrodingthevitalsoflocaldemocracyinIndia.

Thesituationisparticularlyironicinthecities,wheretheelectedmunicipalgovernments,while
presidingoverareaswheremuchoftheboomingwealthofIndiaiscreated,haveneitherthe
autonomynortherevenuestosignificantlyimprovethequalityorquantityofmunicipal
services.Theelectoralprocessalsoencouragespoliticalclientelism,politiciansfinditeasierto
lurevoterswithpromisesofprivategoods(say,colorTVsetsorloanwaivers)thanthoseof
longtermimprovementofpublicservices(say,qualityofschools).Bothcapture(bythelocal
eliteandthestatelevelparties)andclientelismhaveensuredthatlocaldemocracyremainsthe
weakestpartofIndiandemocracy.

Therearesomeextraincentiveandstructuralissuesinhealthservices(qualitativelysome
similarissuesarisealsoineducationornutritionprogrammes).Atthemomenthealthcarein
Indiaisprimarilyprivate(andlargelyunregulated).Householdsurveydatasuggestthat85per
centofallvisitsforhealthcareinruralareas,evenbythepoorestpeople,aretoprivate
practitioners.Whilethepoorqualityofserviceinpublicclinicsandhospitals(andabsenteeism
bynursesanddoctors)oftendrivepatientstoprivatedoctors(someofthemquacksorcrooks),
insomecasesevenwhenthepublicservicesareavailable,thepatientsprefergoingtoprivate
medicalpractitionerswhomorereadilyobligethemwithunnecessaryantibioticsandsteroids.

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Thepublichealthdeliverysystemisafflictedbypoorproviderincentives,coupledwithlow
accountabilitytothepatients.Themedicalpersonnelarepaidafixedsalaryindependentofthe
numberofpatientsoroftheirvisits,sotheyhavenoeconomicincentivetoservetheminthe
publicclinic(theyhavealltheincentivetoaskpatientstocometotheirprivatechambersfor
paidserviceandsendthemforunnecessarydiagnostictestsatlabsinwhichtheyhavea
monetaryinterest).Thepoorhaveverylittleorganizedvoiceinsanctioningtheerrant
provider.Theyareassertiveinelections,butevenalocalelectionisabluntinstrumentof
sanctionforanyparticularservice:electoralplatformsaremultidimensionalwherespecific
grievancesaboutanyparticularpublicserviceprovidergetdiluted,oftenbylargerstatewide
issues.Inaddition,comparedtocurativemedicalservices,theIndiansystemisparticularly
deficientinsystematicplanninganddeliveryofpreventivepublichealthservicesorsustained
programmesoflargescalediseasecontrol(thepublichealthadministrationinTamilNadu,I
understand,isamajorexception).Oneofthecostviabilityproblemsforanypublichealth
insuranceserviceforthepoorinIndia(liketheasyetfledglingprogramme,RSBYRashtriya
SwasthyaBimaYojanathatissupposedtocoveruptoRs.30,000forhospitalizationrelated
expensesforBPLfamilies)isthatthepoorinmostcasesgoforhospitalizationwithillnesses
(likediarrhoeaortyphoidormalaria)whichcouldbepreventedbybasicpublichealth
programmeslikeprovisionofcleandrinkingwater,sanitation,spraying,etc.Thusthe
deficienciesofpublichealthadministrationinIndiaincarryingoutitsprimarydutiesmake
healthcareinsurancesocostly.

Outsideofgovernmentorprivateprovisionofhealthservicestherecanbeotheralternatives.
SeveralNGOsinIndia,aspartoftheirdevelopmentprogrammes,haveinitiatedcommunity
healthinsuranceschemesforpoorpeople,oftenlinkingupwithaninsurer(withalargerrisk
pool)andpurchasinghealthcarefromanexternalprovider.SEWAinGujaratisanimportant
exampleoforganizingcommunityhealthinsuranceforitsmembersandtheirfamiliesinthis
way.Thisandothersimilarmodelsneedtobestudiedandreplicatedinamuchlargerscalein
workerassociationsandcooperativesinIndia,particularlyintheinformalsector.Inthehistory
ofGermansocialwelfareprogramsworkerassociationsplayedaleadingrole.InIndiawhere
theinformalsectorismuchlarger,smallscaleassociationsneedtobemobilizedforsocial

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insurance,theNGOscanplayamediatingrolewithinsurersandhelpprocessingpaymentsof
premium(apartfromidentifyingbeneficiariesandgivingthemtherequisiteinformation),and
thegovernmentcanintroducesomeprovideraccreditationsystemstohelpthechoiceof
providers.

IVLivelihoodProtectionaspartofSocialProtection?

Whentheinformalsectorislargeandthemajorityofpeopleareselfemployedintinyfarmsor
firms,theboundarybetweenahouseholdandanenterpriseisblurred,whichmeanssocial
protectionprogrammesmayhavealsotoinvolvevariouskindsofprotectionoflivelihoods.
Theseincludeprovisionofcredit,developmentofmarketingnetworks,insuranceagainst
productionrisks(say,rainfallinsuranceinagriculture,rentingoutserviceforgeneratorsto
coverpoweroutagesinmanufacturingfirmsorrepairshops),roads,extensionservices,etc.For
thosewhoworkinthecasualwagelabormarketandfortheunemployed,skillformation,
vocationaltrainingandpublicfacilitiestoconnectthemupaftertrainingwithpotential
employerscanallbepartofageneralsocialprotectionprogram.

Ofcoursealltheseprogrammeswillcostagreatdealofmoney(apartfromorganizational
resources).Tosomeextentandtotheextentpoliticallyfeasible,somerestructuringofexisting
wastefulorineffectiveprogrammeswillsavesomemoney.Butultimately,astheEuropean
experienceshows,socialdemocracyisexpensiveonthepublicexchequer,itllbemoresoin
Indiawherepovertyanddeprivationaresomassive.IndiastaxtoGDPratioisatthelowerend
amongmajordevelopingcountries(muchlowerthaninChina).Whilekeepinginmindthat
highertaxratesoftenencouragemoretaxevasion,thereisalotofscopeforraisingthetaxto
GDPratio,particularlyfromcapitalgains,inheritance,andtheburgeoningrentalincomesof
variouskindsinrealestate(thecorruptpropertyassessmentsysteminourcitiesleavesout
muchoftheenormousriseinvalue),inruralandsemiurbanlandaroundinfrastructural
projects,andinminesandotherextractiveindustries.Thiswill,ofcourse,immediatelyraise

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loudscreamsfromIndiasrich,butsanerelementsofthelatterwillrealizethatsocial
protectionforthepoorwillultimatelyhelpthemaswell,particularlysincethehumancapital
chainsarepresentlybrokenwithoutwhichtheirbusinesscannotthrive.Aswehaveindicated
before,therearemanywaysequityandefficiencycangotogether.Ofcourse,thetaxing
governmenthastoimproveitscredibilitybyminimisingwastefulsocialprogrammes.Atthe
locallevelifpanchayatsandmunicipalitiescanraisepropertytaxes(assessedmaybeonarea
basednondiscretionaryratesasisbeingcurrentlytriedinMumbai,reducingthepowerofthe
assessorofficials)andiftherevenueisearmarkedforspendingontransparentandtimebound
specificlocalbenefitprojects(whichcanbepubliclydiscussedingramsabhasandward
meetings),thetaxpayersmaybemorewillingtocontribute.

Ifsocialprotectionhastoinvolvelivelihoodprotection,atsomepointonehastograpplewith
thecontroversialissueofhowmuchofthetraditionalextremelylowproductivitylivelihood
patternshavetobeprotectedagainsttheonslaughtofmarketsandcapitalistdevelopment.As
thelatterhasoftenbeenidentifiedwithdispossessionanddislocationofpeoplefromtheirland
anddespoliationofthelocalenvironment,therearenowstrongmovementsinIndiaagainst
acquisitionoflandfromfarmersandadivasisforthepurposeofindustrialandcommercial
developmentandmining.Idonothavethespaceheretogointothedetailsofthisimportant
controversyhere,Ishallonlyregisterhereapleaforsomebalancebetweentheneedfor
economicdevelopmentthatcreatesproductivejobsandenhancessocialsurplus(whichcan
potentiallyberedistributed)ontheonehand,andontheotherhandtheneedforminimising
(andadequatelycompensatingfor)thedislocationbymeansofaprocessinwhichthelocal
stakeholderscanbefullparticipants.Useoflandandmineralsbyprofitseekingcompaniesfor
nontraditionalhigherproductivityactivitiesisindispensableifwewantanychangeinthe
miserablewayoflifethatthefarmersandadivasishaveenduredforcenturiesastheMarxist
economistEmmanueloncewrote,thehorrorsofcapitalismfadeincomparisonwiththe
horrorsofprecapitalism,orasJoanRobinsonfamouslyremarked,whatisworsethanbeing
exploitedisnottobeexploitedatall.Thereistoomuchromanticizingofthetraditionallife
amongsomeotherwisewellintentionedactivistsandtoolittleinterestinassessingthe
complextradeoffsinvolved.Infactthereisalargersocialorganizationalissuehere.Voluntary

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groupsandNGOsmoreoftenthannotbeingessentiallysingleinterestadvocacylobbieslack
themechanismoftransactionalnegotiationsandgiveandtakeamongdiverseinterestgroups
aroundthosetradeoffsthatlargepartyorganizationsrepresentingandencompassingthese
diverseinterestscouldfacilitate.Thattheexistingpartyorganizationslackingininnerparty
democracydoabadjobofitdoesnotnegatethegeneralpoint.Ontheotherhand,aswehave
mentionedbefore,inthecurrentdispensationthesurplusgeneratedintheprocessof
developmentintheseareasisgrosslyinequitablydistributed,muchofitgrabbedbythe
corporateoligarchy,realestatetycoons,theminingmafia,andtheirpoliticalpatronsand
collaborators.Thereisneedfortransparentandcarefullymonitoredauctioningofminingrights
amongcompetingcompanies,andforasubstantialannuitypaidtothelocaldispossessed
peopleandforanenvironmentalimprovementfundoutofthemoneythusraisedandsharesof
thecompanies.Wehavetofindabalanced,equitable,andsustainablewayofdividingthe
surplusandminimisingtheloss(bothprivateandsocial,includingenvironmental).Inthis
balancingNGOscanplayanextremelyvaluableroleinespousingthecauseofthedeprived,
increasingtheirawarenessandinformation,catalyzingtheirorganizationsandactingas
watchdogsagainsttheabusesofstateandcorporatepower.

VSocialProtectionandDemocraticMobilization

Finally,thebigpuzzleinIndiandemocracyisthis:thenumericallylargepooraresoassertiveat
electiontime,andyetsocialprotectionforthemcontinuestobeweak,andelectionafter
electiontheyselect(orfailtopunish)leaderswhodosolittleforthemintermsofsocial
protection.Theremaybeseveralfactorsatplayhere:

(i) Itispossiblethatendemicpovertyandlackofsocialprotectionarewidelyregarded
amongcommonpeopleasacomplexphenomenonwithmultiplecauses,andthey
ascribeonlylimitedresponsibilitytothegovernmentinthismatter.Themeasuresof
governmentperformanceareinanycaserathernoisy,particularlysoinaworldof

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 illiteracyandlowlevelsofcivicorganizationandformalcommunicationonpublic
issues.Aperceivedslightinthespeechorbehaviourofapoliticalleaderfeltbya
particularethnicgroupwillusuallycausemuchmoreofanuproarthanifthesame
leaderspolicyneglectkeepsthousandsofchildrenseverelymalnourishedinthe
sameethnicgroup.

(ii) Thelattersuggeststhatwhatismoresalientthansocialprotectionisdignitypolitics.
Ofcourse,inalargersensesocialprotectionshouldincludedignityissues.Ifelecting
alowcasteleader,howevercorrupt,reducesthechancesofuppercastethugs
harassingorrapinglowcastewomen,thatsurelyshouldcountasagaininsocial
protection.

(iii) Sincethepoorusuallygetmobilizedoncasteandethniclines,themodalitiesofsuch
mobilizationareoftenmultidimensional,andpovertyalleviationorsocial
protectionisonlyoneofthemanyissuesthatgetarticulatedinthepublicdomain.
Also,theprocessofsuchethnicmobilizationisofteneasytobehijackedbytheelite
ofthesegroups,whochannelalionsshareofthebenefitstowardsthemselves.The
intendedpoorbeneficiariesareoftenunorganizedanduninformedabouttheir
entitlements,andtheyalsolacktheabilitytoevaluatethequalityoftheparticular
educationorhealthserviceprovided.

(iv) ItispossiblethattheobservedpreoccupationinNorthIndiawithsymbolicvictories
amongtheemerginglowercastepoliticalgroupsmaybejustamatteroftime.The
socialandpoliticalchangeshavecometoNorthIndiaratherlate;inSouthIndia,
wheresuchchangeshavetakenplaceseveraldecadesback,itmaynotbea
coincidencethattherehasbeenalotmoreeffectiveperformanceinthematterof
publicexpendituresonsocialprotectionprojectslikefood,health,education,
housinganddrinkingwater.ThisreflectsthefactthatinSouthIndiatherehasbeen
alonghistoryofsocialmovementagainstexclusionoflowercastesfromthepublic
sphere,againsttheireducationaldeprivation,etc.inawaymoresustainedand
broadbasedthaninNorthIndia.Onemayalsonotethattheuppercasteopposition

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 tosocialtransformationissomewhatstrongerinNorthIndia,asdemographically
uppercastesconstituteingeneralalargerpercentageofthepopulationthanhas
beenthecaseinmostpartsofSouthIndia.Sonewpoliticalvictoriesoflowercastes
inNorthIndiagetcelebratedintheformofdefiantsymbolsofsocialredemption
andrecognitionaimedatsolidifyingtheirasyettentativevictories,ratherthanin
committedattemptsatchangingtheeconomicstructureofdeprivation.

OnemajordifferencebetweenIndiandemocracyandtheWesternisthattheemphasis
hereismoreongrouprights,lessonindividualrights(whichareoftencrasslyviolatedwhen
thereisevenaremotechanceofsomegrouporothertakingoffence).Oneindicatorofthe
emphasisongrouprightsisthatreservationsareoftenthemostpopulartoolof
redistribution.Publicsectorjobreservationsforsomehistoricallydisadvantagedgroups,for
example,ferventlycatchthepublicimagination,eventhoughobjectivelytheoverwhelming
majorityofthepeopleinthesegroupsmayhavenochanceofeverlandingthosejobs,as
theyandtheirchildrenlargelydropoutofschoolbythefifthgrade.Attentionisthus
directedatsymbolicpolicies,andthepatronagebenefitsareprimarilyenjoyedbytheelite
ofthesegroups,deflectingpublicattentionawayfromthemoreurgentanddifficult
challengesofimprovingthedeliverystructureofbasicsocialservicesincludingeducation.
Reservationsoftenbecomeasurrogateforeffectiveactiononthesocialprotectionfront.

Thereisscopehereforimaginativepoliticalleadersbuildingongroupsolidaritiesof
hithertosubordinategroupstofocuspoliticalattentiononbasicsocialservicestheyare
denied,notjustinlobbyingwithhigherauthoritiesbutinmobilizinggroupfinancialand
organizationalresourcesforthispurpose(includingrevitalizingthevarioustraditional
groupbasedcharitableorganizations).Theemphasishastobeongroupbasedsocial
movementsthatemphasizeawarenessoftheirpublicentitlements,ofsomejudgmentand
adviceonthequalityofelementaryhealthcareandeducationalservicestheyreceivefrom
villageprivateprovidersofeducationandmedicalcare,oftheadverseeffectsof
superstition,ignoranceandfaithhealing(somewhatonthelinesofthehistorically
successfulpeoplessciencemovementinKerala),andofbasicsanitation,drinkingwater

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 purification,personalhygieneandenvironmentalpracticesthatimprovetheirlives.As
Indiabecomesmoreurbanized,thedifficultiesandcostsofsuchcommunityorganizations
andsocialmovementsshoulddeclinecomparedtothoseindispersedruralsociety.There
arealreadymanywardcommittees,residentsassociations,cooperativesandselfhelp
groups,whichcantrytointegratesocialinsuranceasapartoftheirgeneralactivities,at
leastinnegotiatingwiththeauthorities,processingpaperwork,monitoringandsocial
auditsofgovernmentwelfareprogrammes.Inruralareaswherelivelihoodscrucially
dependonthemanagementoflocalenvironmentalresources(forests,fisheries,irrigation,
grazinglands),historicallycommunityorganizations(panipanchayats,wateruser
associations,vanpanchayats,jointforestmanagementcommittees,etc.)havebeenactive.
Therearenowmanystudiesthathavetriedtounderstandtheconditionsunderwhichthey
succeedandwhentheyfail.Oneshouldderivetheappropriatelessonsfromthis
experience.Aboveall,socialprotectionhastoinvolvethebeneficiariesinactive
participation,awayfromthecurrentframeworkofdolegivingfromthetopbyan
insensitive,unmotivatedandcorruptbureaucracy.

Inconclusion,whilethediscussiononsocialdemocracyinWesterncountriesoftenputsthe
emphasisonitshighcosts(particularlyinviewoftheausteritiesnecessitatedbyintense
globalcompetition)andissuesofincentivesforworkandenterprise,inIndiahigh
inequality,massivepovertyandavastinformalsectormakethechallengeofimplementing
socialdemocracyextremelydauntingasmuchasitishighlyimperative.Theparticular
governanceissuesinIndia,withinept,corruptandunmotivatedpublicofficialsinchargeof
thedeliverysystem,makethemobilizationofsocialgroupsandcommunityorganizations
andvariousparticipatoryprocessesallthemoreimportant.Butthereisamore
fundamentalissueherethatinvolvestheinteractionoftheproductivesystemandthe
politicalculture.Aswehavementionedbefore,Europeansocialdemocracyistheoutcome
ofaclasscompromiseandasocialpact:theworkerswhoareelectorallypowerfulenough
toexpropriatethecapitalistsandendthecapitalistsystemhavechosennottodoso,they
havefiguredoutthatcapitalismistheonlyviablewayleftforadequatelyexpandingthepie,
sotheyarepreparedtobearsomecost(exploitation)andletthecapitalistshavea

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 reasonableshareofthatpiewhichinducesthelattertokeepontheireffortsatbringing
aboutdynamicinnovations.IamnotsureiftheIndianelectoratehasyetbeenconfronted
withthissocialpact,andifsoconfrontedhowtheyllreact.

AfterthedemiseoftheshortlivedSwatantraParty,Indiahasnothadafullscalepro
businessconservativeparty;eventherightwingpartiesarelargelypopulistonmany
economicissueswhentheygototheelectorate.Inspiteofthegreatfloweringof
entrepreneurialenergiesinrecentyearsthroughoutthecountry,Ibelievethereisastrong
anticapitalist(particularlyantibigcapital)streakinIndianpoliticalculture.Thisisnot
surprisinginacountrywheresmallpeople(smallandmiddlepeasants,selfemployed
artisansandshopkeepers,bazaarmerchantsandpettymiddlemen,clerks,schoolteachers
andserviceworkers)constituteanoverwhelmingmajorityofthepopulation,andtheir
ranksareswelledbytheinexorabledemographicpressureandbythetraditional
inheritancepracticesinvolvingsubdivisionofproperty.Thereisadeepsuspicionofmarket
competitionwherebythelargereconomicinterests,oftenutilizingtheiradvantagesof
economiesofscaleandbetterpoliticalconnections,candevourthesmall.Gandhijihad
givensensitiveandeloquentexpressiontothisantimarket,antibigcapital,smallis
beautifulpopulismandmobilizeditinthefreedommovementagainsttheBritish.Inrecent
decadesthosebearingthelegacyoftheGandhianmoralcritiqueofmarketexpansionand
competitionhavejoinedforceswiththoseespousingtheleftcritiqueofcapitalist
exploitationofworkers,peasants,andothersmallpeopleandtheirrightsovernatural
resources,inbuildingactivegrassrootsmovementsinmuchofthecountryforthe
protectionoftheenvironmentandofthetraditionallivelihoodoftheindigenouspeople,
againstthedepredationsofthecapitalistoligarchy.Eventhoughtheprivatecorporate
sectoristhrivinginIndiaandinsomesenseitshegemonylooksmorepervasivetodaythan
before,itisinvolvedintheworklifeoftoofewpeople(asitdirectlyemploysonlyabout2
percentoftheIndianworkforce),anditisnotclearthattheelectorateisstillreadyto
accepttheclasscompromiseliketheonebehindthesocialdemocracyenterpriseinthe
West.Ontheotherhand,thepopulistopposition,foralltheirstrengthinnumbers,have
notyetsucceededinpointingtoanyviable,incentivecompatible(i.e.notentirely

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 dependentonrevolutionaryormoralzealforsustenance),systemiceconomicalternative,
outsidetheesotericconfinesoftheirwishfulthinkingorutopiananarcho
communitarianism.Thepassionateintensityoftheirnegativecritiqueofcapitalismisnot
matchedbyaconvincingdemonstrationofasustainedpositivealternativesystemthatcan
generatethenecessarysurplus.Untilthistensionisresolved,thesocialdemocracyproject
inIndiawillremainsomewhattentative.

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