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FEBRUARY l8, 2012 | vol xlvii no 7

Corporatisation of the Media editorials


10 Rather than making information more of a "public good", the strategic Half StePs against Honour Crimes
association of Reliance Industries with Networki8 and the Eenadu groups A Lack of African Union?

raises fears of privatisation and commodification of information. National Libraries: A Mission Possible

Global Sustainable Development Goals: Rio+20 FROM 50 YEARS AGO 9


14 Patterns of natural resource use and the resulting standards of living have to commentary
be common for all so as to lead to a more prosperous and safer world. Corporatisation of the Media:
Implications of the RIL-Networki8-Eenadu Deal
Social Media Politics in Pakistan -Paranjoy Guha Thakurta,
, , . . . , , 1 J • 1 U Subi Chaturvedi

16 Unlike , , in . other countries . where social . , media became , a tool 1 used J mainly • 1 by U Globa, Sustainable
those who were pushing for change, in Pakistan its use is restricted by the The Unresolved Questions for Rio+20
status quoists and the pressures of real politics. -Mukul Sanwal

Social Media Politics in


Critiquing Landscape Urbanism -Afiya s zia

19 Landscape urbanism does not inh


emancipation, or ecologically saner
park shows. -Leon A Morenas
Political Cha

Political 9 , , , , -Jayanta Bandyopadhyay,


Challenge Tapas Roy

22 The Land Acquisition and Rehabil


an opportunity for the people and
process of land acquisition. - Tina Dutta , Parthapratim Pal

Politics Overpowering Welfare book reviews


26 The Unorganised Workers' Social Security Act 2008 was passed as a measure Making
r i- • 1 j • л л г , 1л .. ;fLop/trfl4ťúj has created Movement in In
of r political i- • 1 expediency j • ahead л л of г the 2009 general , elections; 1л .. it ;fLop/trfl4ťúj has created

few timelines or compulsions r for central and state governments. eorj ''"m
r From Financial Crisis to Global Recovery -
Perspective on the Financial Cr
Ecuador: Redefining Development and Quality of Life -YVReddy
37 Ecuador shows that despite continuing global turmoil and d
pushes, much can be done and the rest of the world has a l
this ongoing radical experiment. Redefining Development and Quality of Life:
New Economic Strategies in Ecuador

Affirmative Action, Cultural Fault Lines and the Constitution -Jayati Ghosh

45 The engagement of the discourses of castes, communities and cast


communities with the processes of democracy is indicative of the logic of
Indian Constitution being implicated with that of affirmative actio
- Vivek Prahladan

Cash Transfers and the


, . л , r j. i- г л - r*u System with Cash Transfers?
53 An analysis , . of л the , case for, r and j. against, replacing i- a reformed г л version - of r*u the peter Svedber
targeted public distribution system with a targeted and differentiated cash HowMarket-oLted peter Svedber Is Uni
transfer scheme. Farm Policy?
- С S С Sekhar , Yogesh Chandra Bhatt

How Market-Oriented Is United States7 Farm Policy?


63 The high level of domestic support for the us farm sector has implicati
production and export surpluses, and, in turn, for the world markets.
- Tanveer Ahmad Dar, Shumila Khaki

Inequalities in Literacy in Jammu and Kashmir discussion


73 The Finance Commission report and 2011 Census on low literacy levels in Post-'Post-mortem':
j&K should be taken as an urgent call for introducing legislation on par with A Response to Chattopadhyay and Somel
the Right of Children to Free and Compulsory Education Act. - Markar Melkonian

Post-'Post-mortem': A Response to Ch
77 The author of "A Marxist Post-mortem of Soviet Socialism" (epw, 28 May letters

2011) responds to Paresh Chattopadhyay's "On a Strange Misread


A Note" (epw, 24 September 2011) and Cem Somel's "On
mortem" (epw, 24 September 2011). notes for contributors

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Economic&PoliticalwEEKLY
ISSN OOI2-9976
Ever since the first issue in 1966,
Epw has been India's premier journal for Disturbing Media Trends Understanding Human
Development
comment on current affairs
and research in the social sciences.

It succeeded Economic Weekly (1949-1965),


which was launched and shepherded
Your Media"
Media"editorial
(epw, 28(epw, "Big2012)
January 28 January
com- Business 2012) Weds com- Big
by Sachin Chaudhuri,
who was also the founder- editor of epw. menting on the Reliance/Networki8 deal This Chakraborty's
Chakraborty'sletter has comment
comment reference on to the Achin India
on the India
As editor for thirty-five years (1969-2004) has raised one of the central issues re- Human Development Report (ihdr) 2011
Krishna Raj

gave epw the reputation it now enjoys. garding media pluralism and demo-
("Human Development: How Not to Inter-

EDITOR
pret Change", epw, 17 December 2011),
cracy in India, in particular, and modern
С RAMMANOHAR REDDY capitalist societies, in general. the response and rejoinder that followed
DEPUTY EDITOR
The regime of state control of radio and("A Rejoinder", epw, 28 January 2012).
BERNARD D'MELLO tv in India in the pre-1991 era allowed I wish to add briefly to these "conver-
WEB EDITOR manipulation by the central governmentsations". While Chakraborty is rightly
SUBHASH RAI of the form and content of news cover- concerned about the "serious mistakes
SENIOR ASSISTANT EDITORS age especially at critical moments in the in interpreting the change", my worry
LINA MATHIAS
ANIKET ALAM
country's recent political history such as is about the "conceptual framework
SRINIVASAN RAMANI the Emergency and Operation Blue Star around a feedback loop model" which
ASHIMA SOOD
BHARATI BHARGAVA
(see my "air and Doordarshan Coverage the authors of the report consider im-
of Punjab after Army Action", epw, portant for understanding the change.
COPY EDITORS

PRABHA PILLAI
8 September 1984). The authors sum up the model in a tri-
JYOTI SHETTY The post-1991 era of neo-liberal struc- angle with economic growth marked at
ASSISTANT EDITOR turing of Indian institutions is creating the top point of the triangle and human
P S LEELA
favourable conditions in the opposite capital formation and income poverty
PRODUCTION direction, i e, excessive control by big reduction on the two sides of the trian-
U RAGHUNATHAN
S LESLINE CORERA
business houses. Both types of media gle all connected in a mutually reinforc-
SUNEETHI NAIR regimes are against the values of plural- ing manner.
CIRCULATION
ism, dissent and democracy. Strictly speaking, this is neither in-
GAURAANG PRADHAN MANAGER Amartya Sen's work on famines has clusive growth nor social inclusion.
В S SHARMA
highlighted the important role of media When there is higher economic growth
ADVERTISEMENT MANAGER
freedom in prevention of famines and in an economy but a growing unequal
KAMAL G FANIBANDA
of media control in hiding and accentu- distribution of income and wealth,
GENERAL MANAGER & PUBLISHER

К VIJAYAKUMAR
ating famines. The Stalinist regimes reduction in income poverty is not a
EDITORIAL
smothered democracy through mono- socially inclusive process. Given the
edit@epw.in polist control of media by the State, subtitle of the report, "Social Inclusion",
CIRCULATION and many of the advanced capitalist a meaningful articulation is to provide
circulation@epw.in societies have witnessed the haemor- a definition and some discussion of the
ADVERTISING

advt@epw.in
concept. This is particularly important
rhage of democracy through the control
of media by big business. because there is a prolific and definitely
ECONOMIC AND POLITICAL WEEKLY
320-321, A TO Z INDUSTRIAL ESTATE
The Leveson Enquiry in the ик set profound
up literature including a long
GANPATRAO KADAM MARG, LOWER PAREL in the wake of phone hacking by big
essay by Amartya Sen in 2000 entitled
MUMBAI 4OO OI3
"Social Exclusion: Concept, Application
media empires such as Rupert Murdoch-
PHONE: (022) 4063 8282
FAX: (022) 2493 4515 owned News International is bringing
and Scrutiny".
The assumed nexus between econo-
to light the corrupting power of media
EPW RESEARCH FOUNDATION mic growth and income poverty reduc-
control in influencing politicians, police
epw Research Foundation, established in 1993, conducts
and the general
research on financial and macro-economic issues in India.
tion is a questionable (and indeed seri-
public, epw has correctly
drawn attention to the damaging roleously
of questioned) one. As Sen reminds
DIRECTOR

К KANAGASABAPATHY
Berlusconi control of media for Italian us, what is important is to focus on
С 212, AKURLI INDUSTRIAL ESTATE
politics and society. impoverished lives that people live
KANDIVALI (EAST), MUMBAI 4OO IOI
PHONES: (022) 2887 3038/41
The issues epw has raised in the edito- rather than on depleted wallets. Ordi-
FAX: (022) 2887 3038 rial deserve wide circulation and atten- nary readers may remain confused with
epwrf@vsnl.com
tion of all those interested in preventingthe report's summary of its concept:
Printed by К Vijayakumar at Modem Arts and Industries,
151, A-Z Industrial Estate, Ganpatrao Kadam Marg,
the weakening of democratic institutions
In the context of feedback loops, this Report
Lower Parel, Mumbai-400 013 and by the increasing trend of big business
published by him on behalf of Sameeksha Trust attempts to highlight whether certain sec-
control of media in India.
from 320-321, A-Z Industrial Estate, tions of Indian society suffer from multiple
Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013.Pritam Singh deprivations and hence fail to enjoy the
Editor: С Rammanohar Reddy. OXFORD
benefits of these feedback loops (India Human

4 February 18, 2012 vol XLVii no 7 E33S3 Economic & Political WEEKLY

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Development Report (2011): 2) (emphasis workers, and an assurance that striking
was originally established by M К Gandhi
added). after the Bombay textile strike of theworkers will not be fired and no deduc-

Again it is naïve to consider social in- 1920s, and the other is Mill Mazdoortion of wage for the strike period will be
clusion or inclusive growth as a binary Sabha, affiliated to the Hind Mazdoormade. The workers we met specifically
model, as between those who are in- stressed the abusive language of the
Sabha. The striking workers claim that
cluded and those who are not. The these unions are corrupt and act as
management staff.
"extended office of the management".
terms on which you are included are Disregarding all these demands, the
Every
more important than the head-counting three years, a settlement is management
bro- has resorted to the use of
of the included. kered between these two unions and the police, arrest, intimidation and dis-
the management, but workers do notinformation on the striking workers and
It is also not clear why the second re-
port of the iHDR makes no referenceevento get to know of the deal brokered.their leaders, and are now bringing in
the first National Human Development No notice is put up. Four years back,temporary workers from outside, paying
Report 2001 which inspired a seriesboth them Rs 400-500 per day, to show that
of these unions even agreed to accept
state-level reports in the past. that there will be no recess hour for the
the plant is running, though at much be-
M A Oommen workers to have tea. So the workers low its capacity.
THIRUVANANTHAPURAM were henceforth forced to have tea on Continuing with their anti-worker
the way to the bathroom, and in the stance, both the pro-management unions
Reliance Workers' Strike location of work in an unhygienic andwere against the strike, but the majority
dirty atmosphere, so that work is not of the workers emphasised the strong
disturbed and time "better managed". unity among the striking workforce. Sagar
Over tiletile5,000 Industries
Industries workersGujarat,
in Naroda, in Naroda, of Reliance Gujarat, Tex- Even so, the company website says Patii, a striking worker, said, "With
have been on strike since 2 February 2012 that it "endeavours to create a work- Rs 9.5 crore, the money we produced,
to protest a highly exploitative wage place where every person can realise his Nita Ambani bought an ipl team. They
structure and abysmal working condi- or her full potential". are making jalsa with our money, but it
tions. Spread over 120 acres and with as- Since workers went on strike from hurts them to even part a few thousands
sets of over Rs 300 crore, this plant is the second shift of 2 February 2012to us who produce their goods."
India's "most modern textile complex" the management has used all tricks to Unfortunately, no trade union or politi-
(according to the World Bank) and Reli- delegitimise the strike and break it.cal group or one of the huge number of
ance's first manufacturing facility set up Deployment of the police, intimidation, social sector organisations in Gujarat
by Dhirubhai Ambani in 1966. The com- arrest of workers' leaders and a media has even made a statement in favour of
pany posted its highest ever turnover of campaign which says that the workersthe workers till now, but the striking
over $44 billion and its net profit in- are only miffed for not being allowed toworkers continue with their struggle.
creased to $3.6 billion last year. carry mobile phones inside the factoryNayan, Parag
But on a recent visit to the plant in have all been used. Krantikari Naujawan Sabha
DELHI
Naroda, we heard workers in the factory On the first day of the strike itself,
say their lives are getting cheaper by the Chief Minister Narandra Modi's willing
day. There are about 1,100 permanent Bourbaki and Economics
police forced the striking workers away
and 4,000 contract workers in the from the factory gate, and when they
plant. The workers report that while the assembled in the shamshanghat complex,
company's profits have increased, thearound 20 minutes away, they were forcedК Destructive Vela Velupillai's
Destructive Influence onInfluence
the Math-article on "Bourbaki's the Math-
ematisation of Economics" (epw, 21 Jan-
wages for the workers and karigars haveout of there too. Declaring thé strike
remained more or less the same for years, illegal, and arresting the leaders, the
uary 2012) could have been clarified for
Indian economists with a note either
whereas the salary of the staff haspolice has posted itself in the factory gate.
increased many times. The workers, now organised as thein the text or as endnote on Bourbaki,
While the permanent workers earn a Reliance Employees Union, have sub-which the article did not have. It
paltry Rs 5,000-6,000 per month, the mitted a 16 -point demand list to the
became clear to me only after I read the
Wikipedia piece on Nicolas Bourbaki
contract workers are paid Rs 85-100 permanagement. Their demands include
and learnt what this group of French
day. No legality of payment in terms of a 60% hike in wages and régularisation
payslips, etc, is maintained, only aof contract workers besides double rate mathematicians was doing for about 50
voucher is signed. Overtime is paid in aovertime, a 20% increase in bonus, in- years. Indian economists are likely to
single rate, while strict surveillance is crease of the daily wage of contractknow fixed point theorems, Ramsey,
maintained and late entry into the fac-workers to Rs 200 per day, renewal of a Debreu, etc, but may not have heard
tory is severely punished. fixed salary system, tea-snacks in the of Bourbaki.
For the last two decades there have canteen, no fine for being 10 minutes late, U Kalpagam
been two unions in the plant. One accident
is forms to be filled up according G В Pant Social Science Institute
ALLAHABAD
to procedure, an end to harassment of
Majdoor Mahajan, part of the union that

Economic & Political weekly H3S3 February 18, 2012 vol xlvii no 7 5

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Economic&PoliticalwEEKLY
FEBRUARY l8, 2012

Half Steps against Honour Crimes


The Law Commission's bill on combating honour crimes falls short of what is required.

establish guilt because of the social sway that caste/clan


munity panchayats to annul or prohibit marriages, social panchayats hold over those involved in such crimes?
Honour boycotts munityboycotts
crimesandpanchayats
even murderandof couples
even --thehavemurder to illegal annul of decrees or couples prohibit - by have marriages, caste/clan/com- finally drawn social
finally drawn The Law Commission calls for protection of couples threatened
the attention of the State. A consultation paper released by the Law by the unlawful assemblies - with the collector and district
Commission contains a draft bill - The Prohibition of Unlawful magistrate empowered to do so - but it does not include the
Assembly (Interference with the Freedom of Matrimonial Alli- ncw's demand that the Special Marriage Act be amended to
ances) Bill, гон - that proposes declaring khaps as unlawful provide for the removal of the 30 -day waiting period for regis-
and suggests handing down punitive punishment for intimida-tering a marriage. Women activists have argued that this
tion of couples. A week after this paper was released on 24 Janu- change is required because it allows the couple to get married
ary, newspapers reported that a panel headed by the secretaryimmediately, provided there is mutual consent and both are
for women and child development in the central government above the legally permissible age.
had also demanded a stand-alone law against honour crimes. A A question that is asked is if a communal law which can trans-
similar draft circulated by the National Commission for Womengress individual civil liberties is necessary when law enforce-
(ncw) chairperson, Girija Vyas, and prepared by the All Indiament itself is so poor. Khap panchayats have enjoyed legitimacy
Democratic Women's Association about a year ago contained because of the support provided by the major political parties
stronger definitions of "honour killings" and suggested appro-and police administration in states like Haryana and Uttar
priate amendments to the Indian Penal Code (ipc). Pradesh where honour killings take place the most. Will a separate
The Law Commission's bill is, however, primarily concerned law that criminalises participation in assemblies that endorse
with the "unlawful assemblies" of khap panchayats and steers honour crimes deter them when the existing laws against murder,
clear of suggesting amendments to the ipc to define honour kill- abetment and conspiracy have not prevented them?
ings and proposing appropriate punishment. The commission There is a lot of weight in the gender activists' argument that
has chosen this option so as to avoid difficulties in defining andsuch legislation will indeed work. Special laws such as the Com-
interpreting such killings. However, by invoking criminal law in mission of Sati (Prevention) Act have helped in deterring such
the proposed bill the commission has taken a major decision.crimes and have aided social reformists in their efforts to eradicate
It has suggested that an entire assembly can be deemed to besuch practices. Honour crimes - a misnomer in itself - do fit the
unlawful and guilty if it sits to deliberate on any marriage thatcategory of special crimes as they take place with social sanction
is not prohibited by law. In other words, guilt will be communal and are very difficult to prove in court because of the social pres-
and not just individual. Guilt will also be assumed until the sures that are placed on the victims or those who want to get jus-
individuals who participate in such assemblies are proven to betice on their behalf. Specific and special laws that clearly define
innocent - what is called the "reverse onus" cause. Similar these crimes and declare assemblies unlawful will aid activists in
provisions about placing the burden of proof on the accused tostruggles against these crimes.
their
prove their innocence are present in the ncw draft as well, but
The Law Commission's bill tries to marry accepted principles
the latter extends to murders as well. of jurisprudence related to individual civil liberties with measures
While the Law Commission acknowledges that shiftingand thelaws specifically designed to counter honour crimes. The
burden of proving his/her innocence to the accused in thecommission
case could have stretched the principle of burden of
of murders or in their abetment would be against the cardinal
proof to cover what gender activists are demanding as well
principle of jurisprudence, it argues that a presumption ofin
guilt
order to provide justice to victims of honour killings. Yet it
in participation in unlawful assemblies is necessary because
is also true that without comprehensive social and economic
reforms that tackle caste hierarchy, patriarchy and skewed
obtaining eyewitnesses for the presence of individuals in those
assemblies is difficult. But why cannot such an assumptionlandownership,
hold the barbarity that is honour crimes cannot be
true in the case of an honour killing itself, difficult as it totally
is to eradicated from Indian society.

Economic & Political weekly ЕИШ February 18, 2012 vol xlvii no 7 7

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A Lack of African Union?

South Africa's ambition to dominate Africa opens up deep divisions in the continent.

in the elections was between the smaller African states and the
frontiers of the global rush for commodities. Whether it larger ones. South Africa's insistence on claiming the African
Africa frontiers is theishas, traditionalcommodities
the traditional of in the like
the oilglobal recentorcommodities
and copper new rush past, for emerged like commodities. oil and as one copper of Whether the or final new it Union Commission for itself overturned the unwritten rule in the
minerals like coltan, whether it is rich agricultural land or bio- au that the larger nations will not put up candidates to the chair.
diversity, Africa is again the centre of global attention. What is South Africa's "leadership" of the continent emerged from both
significant is that the "emerging powers" like China and India are its status as a large economy with a well-developed manufacturing
also leading contenders in this new phase of the race for Africa, and service sector, a powerful military and most crucially, the rul-
along with the older imperialist powers of Europe and North ing African National Congress government's moral authority after
America. What is also different this time is that a few African having struggled against and eventually triumphing over apart-
countries have emerged to take on the mantle of "representing" heid. This was a role which the new, post-apartheid South Africa
Africa on the global stage. South Africa, the continent's largest did play to some extent in the 1990s. The very formation of the
economy, is the pre-eminent power in Africa and its global pres- au 10 years ago, on the ashes of the Organisation of African Uni-
ence is underlined by its membership of such bodies as the Group ty, was under the stewardship of South Africa's then president
of 20 (g-2o) and the India-Brazil-South Africa (ibsa) forum. Thabo Mbeki. It was also the time when South Africa was not
As the scramble for African resources intensifies, South Africa only trying to rally the continent's diverse governments and
wants to position itself as the guardian and safe-keeper of the societies around a common plan of action but was also campaign-
continent's interests. It was in line with this that they made a pitch ing against exploitation by external powers. It was this which
to defeat Jean Ping of Gabon, the incumbent chair of the African got Mbeki to term Chinese agreements with African govern-
Union Commission, the body which is the real power in the African ments on access to natural resources as akin to colonialism.
Union (au), mandated with "driving the African integration and While even a decade ago South Africa may have seen itself
development process". However, in a loss of major significance, as primus inter pares among the African states, today its self-
South Africa has failed in its efforts to get its nominee, veteran anti- perception seems to be different. It wants to be a member of the
apartheid activist and present home minister of South Africa, leading global networks of power and privilege and thus its very
Nkosazana Dlamini-Zuma, elected to the post. What is even more view of the African continent seems to be changing too. Like its
telling is that the South African nominee's votes kept falling in other ibsa partners, it wants to become a permanent member of
each of the four rounds of polling done to decide the winner. Jean the United Nations Security Council.
Ping could not get the two-thirds majority he needed to continue, The promise of the au to provide an effective platform for African
but he did get more support than Dlamini-Zuma. unity to defend the common interests of its member-countries
This election which resulted in an unprecedented stalemate in against the pressures of the superpowers, both established and
the decade-old au has shown some of the deep fissures which di- emergent, seems to have been short-changed in just a decade.
vide the African countries and allow external influences to work This is primarily due to the rising great power ambitions of South
their ways. For starters, it brought out the division between Franco- Africa and others like Nigeria, who too seem to harbour such
phone and Anglophone Africa. But even within Anglophone aspirations. As the divisions emerge, so does the space for external
Africa, Nigeria in the west and Kenya in the east were not too powers to meddle, as France "supports" the Francophone states
comfortable with South Africa's claim to pre-eminence. Then like Gabon while South Africa gets "support" from the United
there is the divide between the countries of southern Africa, who Kingdom, European Union and even its brics partner, China. The
have a group of their own (South African Development Coopera- rise of the new powers is not a challenge to the established global
tion) and those of western and central Africa. Apart from that order called imperialism, rather it seemed to be merely an
there is the older division between Arab Africa and sub-Saharan attempt by upstarts like South Africa, Brazil and India, to wriggle
Africa. A further point of dissonance, if not rift, which appeared their way on to the high table of global power-mongering.

National Libraries: A Mission Possible

The National Mission on Libraries awaits government action.

and prepare an action plan. It set up the Working Group on


important concern in widening and deepening access to Libraries (wgl) which worked on the premise that improving
Zeroing knowledge,knowledge,
importanttheinNational
on concern the library
Knowledge National(nkc)in and widening information Knowledge and sciences deepening Commission (lis) access as (nkc) one to
Commission and updating the lis would truly help in overcoming "informa-
had in 2006 decided to review the current status in the area tion poverty". It also felt that the focus should change from
8 FEBRUARY 18, 2012 vol XLVii no 7 ЕШЕЭ Economic & Political weekly

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merely collecting books to ensuring access to all seekers of books". It is also proposed that not only should books be ordered
knowledge no matter which strata they hail from, with librarians according to local needs and tastes and the poor be given free
and staff being more sensitive to their needs. In its report, the membership, but that rural libraries should also be encouraged
wgl had recommended setting up a National Mission on Libraries to become knowledge centres.
(nml), conducting a census of all libraries, revamping lis It would be illustrative here to look at Kerala which not
training, establishing a central library fund, modernising li- only enjoys 100% literacy but also has the largest and most
brary management, encouraging greater community participa- widespread network of public libraries - an estimated 4,000.
tion and promoting information communication technology The Kerala Granthsala Sangham (kgs) started in 1945 went
application in all libraries. The then union culture minister an- about opening village libraries and its volunteers ran the ones
nounced that the nml would be set up by the end of 2007, but started by trade unions and farmers' organisations as part of
the proposal has remained on the back-burner all these years. their mass education programmes. Almost all of them held
Now, as a first step, in implementing the wgl's recommenda- night classes to spread literacy, doubled up as nurseries for
tions the government has announced a national census of li- the children of the poor and were the hub of the area's social
braries and a survey of reading habits. and intellectual life. They formed the backbone of the state's
The wgl had also made 10 detailed recommendations for literacy drive.
preparation of quality translations (including the translation
However, it is the waning of the reading habit itself which
of pedagogic materials from primary education onwards, is a source of much anxiety among educationists and parents.
The nkc too has expressed concern about this decline and
especially in the natural and social sciences) and the creation
of a National Translation Mission. A seminar "Libraries on the has taken it into consideration in its recommendations.
Agenda" jointly organised in 2008 by a number of institutions,Interestingly, young users of Delhi's central and community
including the nkc, set out an advocacy strategy for Indian libraries want the institutions to offer a platform for inter-
libraries. This covered preparation of an action plan that active programmes.
would take into account staff performance, include civil Beginning with the First Five-Year Plan, the creation of a
society and local self-government authorities in the establish-network of public libraries has engaged the government's
ment of libraries, make public libraries a public space for allattention and the Planning Commission set up a working
strata of society and integrate library services into people's group on libraries as far back as in 1964. Since then there have
daily lives. been a number of developments and an increase in the number
Students who rely on school and college libraries for prepar- of central, state and district level libraries. The need for a
ing academic assignments often complain of the poor condition growing amount of information signals the potential for a
of books and the abysmally inadequate number of copies. The larger role by academic and public libraries. Their present
inputs received by the discussion forums organised by the nkc role in fulfilling these needs is negligible as is the participa-
stressed the need to improve the quality and scope of lis educa- tion of the community in the public libraries. Clearly, going by
tion and training, networking and digitisation, linkage with the nkc's recommendations and the earlier initiatives by the
and access to libraries in the country and those abroad, and government, expert inputs and action plans are not lacking.
setting up community library and information centres in rural The recent announcement says that a new high level commit-
areas. As for public libraries (12 states have enacted library tee will advise the government on library sector issues, pro-
laws), while the scene differs from place to place, the overall mote partnership with the corporate, philanthropic and inter-
need is clearly for better funding and a more professional and national agencies and coordinate with related ministries.
less bureaucratic style of functioning. The recommendations in Considering the wealth of suggestions available, does the
this area stress the need to treat public libraries at different government need further advice from another committee to
levels differently rather than as places to "dump unwanted act on the nml?

FROM 50 YEARS AGO Whether the parliamentary system has new type of leadership is emerging which is

£№ economic ШеМд really been assimilated by the Indian people


may still be an open question. The big changes
9 3f our nal of Current économie anb political Affaire
country-bred and firmly rooted in the soil.
The all-India parties still dominate but they are
that have been effected in recent years mayin danger of losing their all-India character
VOL XIV, NO 7, FEBRUARY 1 7, 1ÇÓ2 all be said to have been brought about by the
with the change in leadership and the charac-
methods of agitational politics rather thanter of voting. Economic development of some
EDITORIALS
through Parliament. The Government's re- sort or other is going on all over the country
sponse to the people for modification or and to the extent that such development tends
India Goes to the Polls
change in policies has not been the result of
to aincrease inter-dependence, the forces of co-
How does the Indian voter behave? The an- series of by-elections. hesion have also a growing source to draw
swer to this question will be found in a week Whether the people are taking to the parlia-
upon. But this is not enough and, with the
or ten days' time. But what makes him be- mentary system or not, there is little doubtchanging character of the political processes
have the way he does is a question which still
that parliamentary politics is getting down at
to work, the task of converting Indian unity
awaits an answer and remains the subject theof people. The elections are being fought into a workable proposition of Government
speculation that it has been. . . more and more on concrete local issues and a and administration acquires greater urgency.

Economic & Political weekly В32Э February 18, 2012 vol xlvii no 7 9

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Corporatisation of the Media
following stakes in various etv channels:
100% in regional news channels operat-
ing in Uttar Pradesh, Madhya Pradesh
Implications of the RIL-Networki8- and Bihar, in etv Urdu, in entertainment

Eenadu Deal channels in the Marathi, Kannada, Bengali,


Gujarati and Oriya languages and 49%
in two Telugu channels, etv Telugu and
etv Telugu News. tvi8 Broadcast said it
PARANJOY GUHA THAKURTA, SUBI CHATURVEDI is acquiring 100% stake in etv's regional
news channels, 50% in non-Telugu enter-
The entry of Reliance Industries,
tainment channels and 24.5% interest
India'slargestled Reliancecorporate Industries (ril) - in two Telugu channels.
entity
On led India's 3 January, Relianceprivately-owned
India's biggest biggest the Industries Mukesh privately-owned Ambani- (ril) - The Networki8/Tvi8 group would
in the private sector, into the
corporate entity with a turnover of get control over the board of directors
country's media
Rs 2,58,651 crore in the financial year industry and theinmanagement of all the etv
that ended on
a major way with strategic 31 March 2011 - announ- news channels as well as etv's non-
associations cedwith
that it was entering into a complex, the NetworkiS Telugu entertainment channels. As if to
multilayered financial arrangement that assuage apprehensions that ril's asso-
group and the Eenadu group, has
involved selling its interests in the Hydera- ciation would exert an influence on edi-
been perceived
bad, Andhra as anEenadu
Pradesh-based instance ofissued by
torial policies, statements
consolidation in a sector in which
group founded by Ramoji Rao to the both groups stated that funding from
big players Networki8
have groupbeen
headed by Raghav ril would not alter promoter, manage-
steeped
Bahl and also funding the latter through ment or editorial control of Networki8
in debt and strapped for cash
a rights issue of shares. The deal will entities. In its media release, ril stated:
over the pastmake the few years.
combined conglomerate What
In- ...Bahl and his team will continue to have
the formation of the new
dia's biggest media group, according to full media
operational and management control
Bahl - bigger than media groups like of both the companies. . .Bahl and the current
conglomerate (arguably one
promoter of
entities of Networki8 and tvi8
star controlled by Rupert Murdoch and will continue to retain control over Networki8
the largest, if not the largest,
the Bennett, Coleman Company/Times and TV18...
in India) in ofthe shake-out also
India group (publishers of the Times
signifies is growing
of , amongRIL's Broadband Interests
concentration
India and the Economic Times
other newspapers
of ownership in an and owners of the The entire complex financial arrange-
oligopolistic
Times now television channel) control- ment is predicated on ril's broadband
market that could lead to loss of
led by the Jain family. subsidiary, Infotel Broadband Services,
media heterogeneity
Television^ - a company in the Net- entering into a memorandum of under-
and plurality.
works group - stated that its board of standing with TV18 and Networki8
directors had approved an outlay of up Media and Investments for preferential
to Rs 2,100 crore for the proposed ac- access - on a first-come-first-served basis
quisition of Eenadu tv's (etv) assets. as a most preferred customer - to all
ril, through an entity called the Inde- content (including programming and
pendent Media Trust (imt), would fund digital content on television, internet
the acquisition of shares in Networki8 and print) produced by the Networki8
and TV18 through rights issues. The group and its associates for distribution
two entities would raise approximatelythrough the broadband network being
Rs 4,000 crore, including Rs 1,700 crore set up by Infotel. ril stated:
from its promoters. Significantly, the
Infotel is setting up a pan-India world class
Paranjoy Guha Thakurta (paranjoy@gmail.com)
deal also provides for ril, which is cur- fourth generation broadband network us-
is an independent educator and journalist
rently setting up an all-India broadband ing state of the art technologies. Infotel ex-
whose work cuts across different media - print,
telecommunications network, to get pre- pects to take leadership position in content
radio, television, internet and documentary
ferential access to the content as well distribution through broadband technology
cinema. Subi Chaturvedi ( subichaturvedi@
through a host of devices.
as the distribution assets of
gmail.com) teaches journalism at the Lady Shri both the
Ram College for media groups.
Women, University ril said its
of subsidiary
Delhiwould access
and is a media and technology research scholar
ril said that its group companies, bydigital content on "entertainment, news,
at the Indian Institute of Technology Delhi.
investing Rs 2,600 crore, will hold thesports, music, weather, education and

10 FEBRUARY 18, 2012 vol XLVii no 7 Ш53 Economic & Political WEEKLY

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other genres" and added that this was with playing an important role in the rise publications have wondered whether
"one of many" partnerships being un- of the late N T Rama Rao as chief minister this deal entails ril buying back parts of
dertaken by Infotel. of Andhra Pradesh and thereafter, his son- its own assets, thereby raising issues of
The Networki8 group of televisionin-law N Chandrababu Naidu. A petitioncorporate governance. It has been re-
channels includes news channels like
had been filed in the court by the lateported that the regulator of the country's
chief minister Y S Rajasekhara Reddy'scapital markets, the Securities and Ex-
CNBC-TV18, CNBC Awaaz, cnn-ibn, IBN7
wife Y S Vijayalakshmi, a member of the change Board of India, was looking at
and iBN Lokmat, and non-news channels
such as Colors, mtv, vhi and Nick (in a legislative assembly, alleging that the deal to ascertain if adequate disclo-
state
us-had bailed out Ramoji Rao when his sures had been made by ril about its
joint venture between tvi8 and the ril
based Viacom). "The promoter compa- family-owned chit fund, Margadarsi, was holdings in Ushodaya. Questions that
nies of Networki8 and tvi8 and the in trouble and facing various inquiries have been raised include the following.
(Independent Media) Trust have entered(from, among others, the Reserve BankWhy were ril's investments in the Een-
into a 'term sheet' under which the Trust
of India). This, it was further alleged, adu group to the tune of Rs 2,600 crore
would be subscribing to the optionally was a quid pro quo for Chandrababumade through jm Financial not disclosed
convertible debentures to be issuedNaidu'sby "assistance" in enabling ril to to its own shareholders until recently?
the promoter companies", the ril state- sign a production sharing contract with Why has TV18 valued its stake in etv at
ment pointed out. the Union Ministry of Petroleum and Rs 2,100 crore with revenues of Rs 525
Networki8 had negative cash flow Natural Gas to extract natural gas fromcrore? Will ril eventually become a co-
the
over the last two fiscal years. During the Krishna- Godavar i basin off the coast promoter of corporate entities in the
half-year ending 30 September 2011, the of Andhra Pradesh. The Outlook (16 Jan- Networki8 group?
company disclosed an operating uary) loss suggested: "ril bailed out et v after The last few years have been difficult
and an interest burden of Rs 128 crore. a deal between Ushodaya and private for the media in India (and the world).
TV18, however, posted a profit for theequity investor Blackstone was scup- In the wake of the global recession,
half year ending September 2011 but thispered by the then Andhra см ysr. In- many advertisers have curtailed expen-
company also had an interest burden ofvestment banker Nimesh Kampani of jm ditures, thus squeezing media companies
Rs 55 crore. Clearly, this deal will help Financial then pumped in Rs 2,600 that are heavily dependent on advertis-
improve the group's financial position crore (he was hounded by ysr for his ing as their primary source of revenue.
dramatically. efforts). In 2008, ETV was transferred Consultancy firm kpmg's 2011 report on
ril had acknowledged in the High Court to RIL." deal activity in the media and entertain-
of Andhra Pradesh that its investments While ril has denied these allegations ment (m&e) industry has written that
in Ushodaya Enterprises, the holding in court, its association with the Eenadu whereas other sectors witnessed a re-
company of the Eenadu/ETV group pro- group has raised quite a few questions. bound in mergers and acquisitions activ-
moted by Ramoji Rao who is credited Financial analysts quoted by variousity and private equity funding during
201
Table 1: Top Media Deals in 2010-11
trend. Both the volume and value of
Month Investee Investor Stake % Deal Value Sector
transactions remained flat with 27 trans-
actions valued at $693 million.
Merg
September Sun Direct TV

July Digicable Reliance Communications Share TV Distribution Mergers and Acquisitions


swap

March Express Publications (Madurai) Jupiter Media and


One deal, Malaysia's Astro All Asia Net-
works acquiring stakes in ndtv Lifestyle,
September NDTV Lifestyle
GETIT Infoservices, Turmeric Vision and
May
Sun Direct tv contributed $175 million
July Turmeric Vision Astro All Asia Networks 80 26 TV Broadcast (or a quarter) of the total deal value in this
August GETIT Infoservices
sector in 2010. Other transactions that
June year included Blackstone pe's investment
January Fame India in Jagran Media ($49 million), Jagran's
January Fame India
subsequent acquisition of Midday Multi-
January Imagine Showbiz
media ($40 million) and the Rajeev
Private equity deals
Chandrashekhar-backed Jupiter Media
April

& Entertainment Ventures' investments in


September Asianet

Express Publications for $53 million


May

(Table 1). The kpmg report also mentions


February Valuable Media

April Associated Broadcasting


D E Shaw picking up a stake in Amar
Ujala (2006) and saif Partners picking
Source: up a 14% stake in TV9 (Chart
GT 1, p 12).
De

11
Economic & Political weekly B3Q February 18, 2012 vol xlvii no 7

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Chart 1: Type of Deal Activity (Rs million) quarter ended September, greater relevance after the disclosure
lower than a net loss of of the role played by some prominent
Rs 67.63 crore in the cor- journalists in the nexus between
responding quarter of the politics and big business in the Niira
previous fiscal year. Radia conversations.
NDTV is a broadcaster, The Union Ministry of Information
with three news channels, and Broadcasting (i&b) and the Telecom
NDTV 24 X 7 (English), Regulatory Authority of India (trai)
NDTV India (Hindi) and have made concerted efforts to promote
NDTV Profit (business). In digital addressable systems, such as
2007, the company laun- direct-to-home (dth), head-end in the
Source: GT Deal Tracker, Merger market.
ched its lifestyle offering, sky (hits), internet protocol television
The Times of India (10 November) re- ndtv Good Times, a lifestyle channel.(iptv) and digital addressable cable tele-
ported that the Srini Raju promoted Oswal, which had started as importers vision (dact) systems to improve the
iLabs Capital and private equity firm saif of synthetic and wool wastes, went intoquality of television services provided to
Partners had struck a deal to offload subscribers. What this has done is to
the manufacture of fertilisers and agro-
their 80% stake in Hyderabad-basedproducts. In 2005, Kribhco picked upbring the largely analog and non-
Associated Broadcasting Company (abcl), addressable cable and satellite television
Oswal's urea unit for Rs 1,900 crore. The
which runs the tvç chain of regional company has been promoted by Abhey sector under the purview of the law of the
news channels, to a "national mediaKumar Oswal whose daughter, inciden-land and made cable operators - there
house" and "a us fund" in a deal esti- tally, is married to industrialist and are an estimated 60,000 of them in India
Congress Member of Parliament (mp)at present - accountable by facilitating
mated at over Rs 500 crore. The Business
Standard (17 January 2012) has stated Naveen Jindal. enumeration and by plugging leakages
that the BCCL/Times group had shownIn comparison to the deals mentioned,of revenue. This has been done through
preliminary interest in buying out abcl the RiL-Network 18-Eenadu deal is far the Telecommunication (Broadcasting
and had also joined the race to pick up bigger.
a The newly formed media con- and Cable) Services (Fourth) (Address-
glomerate will not only have a major able Systems) Tariff Order, 2010 and the
majority stake in two sports channels con-
trolled by the Mumbai-based Nimbus presence in urban areas but a large foot- Cable Television Networks (Regulation)
Communications group, Neo Cricket print in rural areas and small (Tier и Amendment Act 2011, the latter seeking
and Neo Sports. and Tier in) cities where media penetra- to make full digitisation of cable tele-
tion levels are relatively low and the vision mandatory in three years.
On 21 December, Oswal Green Tech,
potential for growth in advertising high.
formerly Oswal Chemicals & Fertilisers, This new wave of consolidation threa-
acquired a 14.17% shareholding in New What is also unique about this particular tens, as Arvind Rajagopal points out in
Delhi Television in two separate block deal is the combination of readers/ his article in The Hindu (24 January
viewers that it offers which makes ad- 2012), to effectively disenfranchise a
deals from the investment arms of Merill
Lynch and Nomura Capital. The total number of Indian citizens as television
vertising in group media more attractive
for national advertisers.
deal was worth Rs 24.34 crore. Earlier, broadcasters and cable distributors inte-
in April 2011, Goldman Sachs Invest- grate their operations vertically, com-
ments Mauritius and gs Mace Holdings Key Concerns bining both hardware and software with-
had sold their stakes in ndtv in a deal The RiL-Networki8-Eenadu deal raises in the ambit of corporate conglomerates
worth Rs 70 crore; these shares wereseveral key concerns relating to consoli-with the same controlling interests.
dation within the media industry. With Thus, the star group controls cable
then picked up by Merrill Lynch Capital
Markets Espana and Nomura Mauritius. larger television broadcast networks, distributor Hathway, Zee controls Dish
In October, ndtv along with Kasturi & including Zee, Hirner/cNN, Viacom/MTVand the Sun group Sumangali Cable. He
Sons (which publishes The Hindu) deci- and Sony, expected to acquire/partnerpoints out that "with greater economies
ded to sell their combined stake in their regional networks, the commoditisation of scale for business promoters, and
joint venture Metronation Chennai Tele- of news seems almost inevitable but not far more viewing options for those who
vision to the Educational Trustee Com- necessarily desirable. In India as in thecan afford them" the issue of "afforda-
world over, large media corporations bility for the wider public... remains a
pany, promoters of the Tamil daily Dina
Thanthi for Rs 15 crore. At the end ofare today clearly playing a bigger role inbig question".
the political economy that they report
September, ndtv's promoters, Prannoy
on. Though a free media is fundamental TRAI 2009 Report
Roy, Radhika Roy and rrpr Holding were
holding 61.45% stake in the company, to the existence of a liberal democracy,According to the trai report of 25 Febru-
foreign institutional investors 18.08% concerns about the accountability andary 2009 on "Recommendations on Media
and retail investors 14.7%. ndtv had transparency of media companies remain.Ownership", vertical integration in the
In India, these concerns have acquiredmedia market has already resulted in
reported a net loss of Rs 22 crore in the
12 February 18, 2012 vol XLVii no 7 Q3S3 Economic & Political weekly

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numerous disputes being brought before paradoxically - by a shrinking in the
obtaining a disproportionately high share
the Telecom Disputes Settlement and Ap- of total advertising expenditure. Thenumber of traditional media operations
pellate Tribunal (tdsat) between broad- uniqueness of India's "mediascape" sug-in television and print.
casters and cable operators alleging denial gests that while restrictions may be de- In the last few years there has been
of content by other service providers. sirable, the safeguards deemed appro-growing consolidation of media organi-
New cases are being added regularly, priate may not precisely be those thatsations across the globe. In the political
which the trai regarded as "a clear indi- apply in other countries. The trai haseconomy of the media the world over
cation that the current market situation suggested that a detailed market analysisthere is clearly an alarming absence of
requires corrective measures". The trai be conducted by the i&b Ministry in ordernot-for-profit media organisations. Nei-
report further drew attention to the fact to ascertain which safeguards would bether subscription nor advertising revenue-
that all restrictions on vertical integration most appropriate in the Indian context. based models of the media have been
are currently placed on companies. How- able to limit this tendency of large sections
What Restrictions? of the corporate media to align with elite
ever, large conglomerates of the Indian
media are usually groups that own many interest groups. In not just economic
Restrictions on cross-media ownership
different companies. This allows them to terms, the media is perceived as an
and control will certainly be resisted
have controlling stakes both in broad- active
staunchly by the big conglomerates inpolitical collaborator as well, seek-
casting and distribution by acquiring ing to influence voters on the basis of al-
India which own properties across media
licences under their different subsidiary/ legiances of owners and editors. This
types and segments. These groups would
associate companies, totally bypassing can,
be vociferous in their criticism of and often does, constrain free and
any
current restrictions and defeating the step to move towards regulation offair
cor-exchanges of views to facilitate dem-
purpose of their existence. The trai report, porate "groups" or "conglomerates"ocratic
as decision-making processes.
therefore, suggested that the restrictions opposed to specific "entities" - they
no longer be placed on "companies" but Media Plurality?
would resist such moves tooth and nail.
on groups and conglomerates. There-
Any attempt to impose cross-media RiL deal has enabled Networki8,
If international best practices are to be strictions on ownership and control and the merged group to expand
Eenadu
followed, cross-media restrictions should would be dubbed as "heavy-handeditsgov-
offerings to benefit both its stakehold-
be put in place to prevent large groups ers and its advertising target audiences.
ernment censorship", "attempts to stifle
from owning stakes across several media, freedom of expression", "a return to theremains to be seen is whether clear
What

such as print, newspapers, television, bad days of the Emergency" and boundaries
a "re- can be etched between the
radio and the internet. In the us, restric- boardroom and the newsroom. The deal,
version to the infamous licence control
tions place a limit on the market-share raj". The government will invariably therefore,
be raises significant questions
available to one entity and that prevents about
accused of trying to constrain the media the diminishing levels of media
newspaper/broadcast cross-ownership in because the media is critical of those in
plurality in a multilingual and multicul-
the same market. In France and Canada, positions of power and authority.tural Thecountry. Most of the reportage on
a "two out of three" law prevails, where- the
argument that since cross-media restric- deal has focused on its business as-

by companies can only own two of three tions exist in advanced capitalist coun-
pects. Questions about the future nature
of the following: terrestrial television tries with developed media markets,ofsuch
editorial control remain unanswered.
services, radio services and daily news- The
restrictions should also exist in India, complicated holding structures and
will
papers. In the UK, the ownership of both investments
be countered by claims that since India is made through layers of sub-
newspapers and radio stations, and of sidiary
a developing country, any restrictions on companies make it difficult to
both television channels and newspapers ownership and control would stifle the the real "bosses" and the powers
discern
in the same area, is prohibited. media's growth potential. they wield.
The Indian media market differs from The real challenges that lie ahead for
The emergence of cartels and oligar-
those of developed countries in several the
chies could be symptomatic of an in- media in India are to ensure that
ways. For one, India is a developing creasingly globalised but homogenised concentration of ownership in
growing
country and all segments of the media communication landscape, despite anthe
oligopolistic market does not lead to
industry (including print and radio) are loss
growth of internet technology bringingof heterogeneity and plurality. In
still growing unlike in many developed the by
about a semblance of démocratisation absence of cross-media restrictions
countries. The media market in India and with government policies contribut-
allowing for more user-generated content
remains highly fragmented, due to the ing to further corporatisation, especially
by "prosumers" (producer- consumers).
While
large number of languages and the sheer the growth of the internet with
has respect to the television medium,
led
size of the country. The television broad-to a collapse of geospatial boundaries
diversity of news flows could be adversely
casting industry has, over the last two and lower levels of gate -keeping in contributing to the continuing
affected
decades, become particularly fragmented,checking information flows, theprivatisation
per- and commodification of in-
with low entry barriers and high carriageceived increase in diversity of formation
opinion instead of making it more of a
"public- good".
has been simultaneously accompanied
fees and the top two or three channels
Economic & Political weekly ЩЗЕЭ February 18, 2012 vol xlvii no 7 *3

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for action and global vision for the future.
Global Sustainable The divergence between countries centres
on whether the transition to global sus-
Development Goals tainability will be based on the economic
or on the social dimension of sustainable
The Unresolved Questions for Rio +20
development. Creation of new markets
will require making transparent the costs
of actions or inaction, with sustainable
MUKUL SANWAL
development considered a process and
not a goal.1 Future growth in developing
Preparations for the Rio+20 countries, because of the existence of
United Nations conference on conference on sustainable deve- ecological limits, poses the moral ques-
The lopment, conference
lopment,Rio+20 to on Unitedto
take sustainable
takeplaceplace
Nations in Rioin
deve- (un)Rio
de detion - if sustainability cannot be achieved
sustainable development have
through technological efficiency, how
Janeiro in June, does not aim to produce
begun, but the first roundmultilateral
of "hard law" agreements, unlike
much of the world's resources does any
preparatory meetings didthe not
Earth Summit in 1992, which among one nation or individual have a right to
other outcomes led to the un Framework for their well-being? The unresolved
address important issues such as
Convention on Climate Change (unfccc).question is whether developed countries
sustainable resource use,
Instead, the core of the draft outcome
will recognise the need to change parti-
production and consumption.
document produced by the un is a pro-
cular kinds of resource consumption for
posal to agree by 2015 to a set of sustain-
the sake of others' development.
able development goals, a framework In this context, defining the global
for reporting by large companies andgoals will be contentious. The shift to
the World Trade Organistion (wto) asgreener economies can be seen as a pro-
the means of implementation. The firstcess, augmenting ecosystem services
round of negotiations concluded on
and controlling environmental damage.
27 January 2012. It can also be considered a goal depen-
Humans have always altered their
dent on new technologies in all fields.
Attention will need to be focused on social
local environment; with industrialisation,
urbanisation, motorisation and increase
design and social innovation, especially
in incomes they have begun to alter thein cities where the majority of the human
planet. The emerging concern is that the
population will soon be living. Taking a
adverse effects of economic activities middle ground, a green economy should
exceed those of resource extraction. There be defined in terms of minimising the
is scientific evidence that the planet will adverse effects of economic activities on
soon be unable to absorb the waste carbon global ecosystem services depending on
dioxide of excessive consumption. The the stage of development, while using
lifestyle that comes with affluence, wit- innovative technology to provide equal
nessed in the industrialised countries with opportunity and prosperity for all.
high levels of natural resource consump-
tion, particularly energy and high levels of International Cooperation
waste, like carbon dioxide, threatens half There are three areas of major disagree-
of humanity which has yet to enjoy the ment between countries with respect to
benefits of increased incomes. Transform- international cooperation for the trans-
ing societies towards living in balance formation to sustainable development.
with the natural environment will alsoFirst, strong objections have been voiced
lead to more equity, even development on including in the outcome a rights-based
and coherence in the global agenda. approach under the principle of common
Mukul Sanwal ( sanwals@gmaiLcom ) has held but differentiated responsibilites that
senior policy positions in the Government
Defining a Green Economy
of India (1971-1993) and the United Nations
have shaped international cooperation
The theme of the Rio Conference is "green around the environment. Interestingly
(1993-2007). He was closely involved with the
economy
Rio Conference, 1992 and the World Summitin the context of sustainable enough this was also the last principle
on Sustainable Development in 2002. development
He is and eradication of poverty". reluctantly agreed upon in the negotia-
There
associated with think tanks in India, is as yet no consensus on the tions on the Rio Declaration in 1992 only
and has
been a visiting professor at the University of
definition of a green economy, principles because it was reproduced from a com-
International Business and Economics, Beijing.
of international cooperation, framework munique of ministers of environment of

И February i8, 2012 vol XLVii no 7 DEE3 Economic & Political weekly

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the Organisation for Economic Coopera- which should not be based on markets ascould provide a starting point for long-
tion and Development (oecd). ends in themselves generating greater term investor engagement and bench-
Differentiation, based on stages of deve- aggregate wealth, but rather on human marking through pricing risk and man-
lopment rather than historical respon- well-being achieved through access to agement quality. This is supplemented
sibility for environmental damage, is adequate ecosystem services. A techno- with suggestions for environmental pricing
important because a key role will need to logical transformation will not occur with- of national ecosystem goods and services,
be played by all governments as the trans- out a societal transformation driving it. while being silent on the services provided
formation cannot be left to market forces. Third, since international standards are by the global atmospheric commons.
Global ecosystem services are both a the basis for national measures with a Also unresolved is which upgraded
global good and are not priced by the global body, the Commission on Sustain-
global impact, a consensus is being sought
market, and policy is responsible for the on the wto as a means of implementation.able Development, the United Nations
creation of markets for new technologies Environment Programme or the wto
This will lead to using the Dispute Settle-
like wind and solar energy. Governments ment Understanding to secure competi- should provide an oversight of the policies
also play a major role in initiating research tiveness concerns of units in industrialised
and monitor progress of measures taken
on new technologies, because they serve at the national level. Here again, there is
countries in the face of the shift in global
a wider good and the benefits accrue to divergence of perspectives on whether
economic power, just as global rules were
society. In responding to a problem that used to create private rights under the
the objective of the annual reviews and
is global in nature and scale, ways have Convention on Biodiversity in 1992. Itdispute settlement should be to provide
to be found to deal with the distribution- will also lead to shift to technologies withinvestors with timely information on the
al challenge, as the costs will fall more state enforcement through the tradelinks between sustainability and economic
heavily on developing countries because performance at the micro- and macro-
regime by inserting intellectual property
of their low levels of income. For exam- rights in the wto in 1995 to support alevels and respond to competitiveness
ple, intellectual property rights also new engine of growth. concerns of the private sector. Or whether
have a "global goods" dimension. Developing countries must now take thegovernments need to know about shifts
Second, the suggested establishment leadership in evolving a new paradigm,
in consumption and production patterns
of a 10 -year "framework on sustainable with new global rules. In the coming years
so that they can exchange experiences and
consumption", which many consider to they will be making increasing demands
monitor progress of the joint research,
be the key element in the global transi- on limited ecosystem services provided
development and deployment of innova-
tion to sustainability, is relegated to the by the global commons, or carbon space, tive technologies to enable human well-
status of one amongst a number of pro- to absorb emissions of carbon dioxide, as
being for all within planetary limits.
grammes rather than the central ele- they consume vast quantities of steel, We now know that the degree to which
ment of the framework for action. At the cement, aluminium, chemicals and ferti-natural resource use affects ecosystem
World Summit on Sustainable Develop- lisers needed for infrastructure, urbani-
services and causes adverse impacts on
ment in 2002, the last paragraph to be sation and food security essential forthe environment does not depend on the
agreed upon was on sustainable con- growth in incomes. The global vision for
amount of resources used, but rather on
sumption and production. A consensus the 21st century must be defined inthe types of resources used and the ways
was possible only when developing coun- terms of achieving universal human
in which they are used. No doubt, a larg-
tries agreed to a "framework of program- well-being within the planetary limits
er and richer global population with ex-
mes", and that too at the national and panding consumption needs will place
by 2050 by limiting consumption, rather
regional level, but not at the global level. than by creating new markets. growing demands on natural systems
A focus on consumption, rather than for food, water and energy, but the de-
production patterns, as the driver of Framework for Action
velopment aspirations of the world's
change also means that the objective of The note circulated by the un to assist in are not in conflict with efforts to
poor
enhancing ecosystem services will be the negotiations2 suggests a new global
solve the climate, or the ecosystem scar-
met through different measures at dif- framework, focused on natural capital city problem because only certain longer-
ferent costs for individuals in different term trends, rather than middle-class
rather than on the eradication of poverty.
countries, because individual preferences The "zero draft" of the outcomes includes
lifestyles, need to be modified.
are shaped by societal forces and defini- provisions that governments agree on the
tions of the national interest. Therefore, Goals
need to develop a global policy framework
an analysis of patterns, trends and drivers The proposed outcomes of the conference
for "all listed and large private companies"
of natural resource use is needed to enable include
(the Secretary General's Panel has suggest- ensuring universal access to
governments to design policies that will ed a market capitalisation of more than
energy, doubling the rate of energy effi-
help societies, rather than individuals, ciency improvement and the share of
$100 million) to integrate sustainability
remain in balance with nature. This within the reporting cycle. It also suggests
renewable energy. It is, however, not con-
change in values will be reflected in the
the development of "green economy road
sidered a strategic goal. The hard lesson
way we define and measure progress,
maps" by global industry sectors, which
from the demise of the Kyoto Protocol is

Economic & Political weekly ESQ February 18, 2012 vol xlvii no 7 I5

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COMMENTARY ^eee ===

that targets are


essential for the eradication of poverty. developing countries over theonly
sharing of
are well defined,
For example, urbanisation the
in developing scarce ecosystem services, they (along
loopholes population shift with closed.
countries will involve aare the other bric countries like Brazil In
specifically states
that is more than five times larger than and Russia) have the responsibilitytha
to
be "a basic
what happened in developedminimum
countries, shape the global rules now being negoti- l
adequate level,
with its attendant requirement of natu- ated, because the un has orso far ignored gl
millennium
ral resources. Sustainable development distributional issues. The distinction that
developm
the ungoals should
in be centred on sustainable was made in thedid
2000, international coopera-no
as basic a
consumption and production human
and recog- tion with respect to investment, nee
trade,
did not recognise
nise stages of development. development and environment in the its
natural resource
The note recognises use
the limits to cur- way global rules were framed between
issue is whether
rent measures of gross domestic product, 1950 and 2002 needswe
to be reviewed bycan
reliance on coal in the absence of access which are suitable only for measuring recognising stages of development,
to innovative technologies that are com- economic activity. It does not include, in instead of a functional and territorial di-
mercially available at affordable cost. the framework for action, development vision. Patterns of natural resource use,
Beyond energy, real targets are being of solutions to the current invisibility of and the resulting standards of living,
sought for critical areas of "natural capi- natural capital and the effects of eco- have to be common for all so as to lead to
tal" such as food, forests and soils, as nomic activités on global ecosystem a more prosperous and safer world.
well as oceans and freshwater, equating services in standard growth models,
sustainability with a green economy where because that would imply modifying
NOTES
economic value creation is not coupled longer-term trends in developed coun-
1 United Nations' Secretary General's High Level
with environmental degradation. The tries and redistribution. Panel on Global Sustainability (30 January 2012),
formulation ignores different stages of China and India will soon become the Resilient People, Resilient Planet: A Future
Worth Choosing, New York, United Nations.
development, where natural resources are largest users of natural resources. In
2 United Nations (10 January 2012), The Future
needed for establishment of infrastructure the context of future conflict amongst We Want, New York, United Nations.

Social Media Politics in Pakistan neophyte activists, many of them armed


with fresh foreign university degrees, lap-
tops and Blackberries. One recalls a strik-
ing symbol of this connection between
AFIYA S ZIA
youth politics and social media at the
first emergency meeting in Karachi. The
The use of social media like blogs, more experienced activists were taken
Twitter, Facebook, etc, has Pakistan. This does not mean it is aback at the enthusiasm of these young
Social powerful,powerful,
Pakistan.widespread
media This widespread has does come not or mean of effective. age it in is
or effective. people who repeatedly stated how "awe-
come to define the new youth-
If anything, the difference between the some" street protests were. They also un-
driven politics in many countries
much-touted efficacy of social media as veiled their plan to paint the city walls
across the world. Much of this
a tool of activism has
during the Arab upris- not with political graffiti but instead
ings of 2011 and in Pakistan is that, in
fanned radical politics of protest with the symbol of "eject" (as in, on cd/
the latter context, the use of social dvd players) to express the subversive
and change and has been
media has been largely apolitical. demand for the removal of Musharraf's
unpredictable and viral in itsThis is not to imply that social media regime. So subtle, that the senior activ-
effects. This article looks atadvocatessocial
and users intend to be apolitical. ists just did not get it.
media activism in Pakistan,Quitewhich
the opposite. In 2007, various left- There were other suggestions that
leaning associations, women's groups and raised the eyebrows of the veterans, such
draws mainly on the urban youth,
non-governmental organisations (ngos) as the one that the People's Resistance
and tries to understand whycame to it
lend supporthas
to the nationwide (pr, as it was then named in Karachi)
not yet become a spark for Lawyers'
a more Movement to restore the chief should solicit corporate sponsorship to
generalised protest. justice of Pakistan (cjp) who was arbi- enable cell phone networking and other
trarily dismissed by the president, general technical assistance for the "revolution".
Pervez Musharraf. The intention was to The leftists put their collective feet
peg fledgling pro-democracy politics to down at this but, they were impressed
the more effective lawyers' protests. by how cell phone video footage of street
Afïya S Zia ( afiyaszia@yahoo.com ) is a feminist
This campaign attracted many young protests were flooding their inboxes
and researcher based in Karachi, Pakistan.
people in the urban centres who were and hanging their ancient desktops,
^ February 18, 2012 vol XLVii no 7 EQZ¡ Economic & Political WEEKLY

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even before they made it home from the also meant that many contemporary
calling for reform of the law. The Member
demonstrations. of Parliament, Sherry Rehman of the ppp,
youth have refrained from joining them.
Instead, the political consciousness attempted
of to move such a bill but given
Youth Politics Redefined the urban middle-class youth seems thetostirred passions, found herself at the
have found its strongest expression
Prior to general Zia-ul-Haq's military dicta- receiving
in end of legal petitions accusing
torship (1979-88), student politics cyberspace.
was Soon after the restorationherofof blasphemy and threats against her
life too. She also found herself disowned
premised on ideological differences. theZia'scjp in 2009, old-style activist groups
ban on student unions led to a general and distanced by her own party leader-
disassociated themselves with the cyber-
ship, which had decided to pursue short-
activists mainly due to a lack of consensus
depoliticisation of youth. Left student
term appeasement of the right-wing to
on issues of a secular identity, the army
politics became diluted as it went under-
ground due to Zia's concerted purging operation
of against the Taliban in Swatcool
and things down, rather than confront
the universities of socialist influence. Onpolitics of the new ruling party the
the (thebacklash of their obvious street power.
When interior minister, Rehman Malik,
Pakistan People's Party (ppp) under the
the other hand, his Islamisation campaign
made a public statement yielding that he
presidency of Asif Zardari). The major
patronised Jamaat-e-Islami student acti-
vism, as well as ethnic identity politics too would have murdered anyone who
ideological differences between the young
and the more experienced meant thatdefamed
of Urdu-speaking or Mohajir (refugee) the the Prophet, the liberals knew
that justice for Taseer was going to be
original activist groups went back to their
students who supported Zia's government
sacrificed for political expediency. They
old identities and politics and, simultane-
in Karachi. Subsequent successive govern-
mental lifting of and bans on studentously, were "unfriended" and removed also realised that reform of the Blasphemy
unions after 1988 led to bloodyfrom
and the list servers of virtual activism.
Law would gather no political traction in
armed contests in Karachi University and Parliament despite a ppp majority. The
Simulated vs Live Activism cfd members retreated and disappeared
to the Jamaat's stronghold over Punjab
in outer cyber-orbit.
It was only when the governor of Punjab,
University. The bloody contests between
Salmaan
the two forces dominated youth politics in Taseer,1 was murdered in 2011
Viral Success
allegedly for advocating blasphemy, that
Karachi in the 1980s and helped permeate
The low-cost, low-maintenance and time-
conservatism into Lahore academia. cyber activism resurged. This time, cyber
The cleavage between social and
leaders named the group, "Citizens for saving
De- nature of social media allows dor-
political-party activism has resulted mocracy"
in mant activists to reactivate themselves on
(cfd) and while this list retained
many
divergent paths for an entire generation of original members of the pr, more any issue, from anywhere and even, under
those who were politicised during the ofZia
the Lahore-based youth became active any identity. Not unlike banned religious
and vocal on this circuit.
years. Social activists gravitated towards groups, changing aliases for the same
NGOs while the political activists embed-This round of virtual conversation, cause is becoming a borrowed methodo-
however, was different. Partially, this logy
ded themselves within political parties. was for cyber social activists. As a cele-
More recently, some analysts have due brated product of globalisation, cyber-
sug-to the more complex issue of religious
activism allows overseas Pakistanis to
politics in itself. But also, the religio-
gested that Imran Khan's run for govern-
freely participate in domestic politics and
political parties had seized the opportu-
ment under his party, Tehreek-e-Insaf,
has contributed towards igniting youth support pressure groups without the
nity to collaborate for a collective, physical
interest in mainstream politics. Political"surge" on the streets over the issue kind
of of risks that "live" activists face.
religious law, which was clearly their turf.
spin aside, the fact is that given the history Very recently, a new cause galvanised
of student politics in Pakistan, this Theyis outnumbered and overpowered the social media activists once again.
these
clearly not an unprecedented engage- It was provided by Maya Khan, a woman
public imagination by real demonstrations
that were media worthy, rather than anchor
ment. In any case, more than on real the of a private tv channel, Samaa,
which is a sister channel of cnbc Pakistan.
passive and under-attended candlelit
issues, the activism of the Tehreek-e-Insaf
youth cadre has so far been limited vigils In January 2012, Khan decided to play
to or virtual protests by the liberals.
media trawling by its youth supporters moral
Civil society was outraged when several vigilante and armed with a camera
conservative
and the use of music and song as part of lawyers came out in crew,
support sneaked up on young couples in a
its electoral campaign. of Taseer's murderer Mumtaz Qadri,
public park to interrogate the nature of
On the other hand, social activism garlanding him for his "glorious" act. their relations and question their inten-
But
through NGO politics has been met by cyni- this outrage could not spill tions.
beyond She even asked some couples for
their nikah-namaas (marriage certificates)
virtual expression, hampered by a genu-
cism, largely from conservatives, nation-
ine sense of fear after the blatant day-
alist-purists and religio-political parties to prove the legitimacy of their relationship.
(colloquially referred to as the "ghairat When the show was broadcast nation-
light murder of the minister for minorities,
Shahbaz
(moral respectability) brigade" by liberal Bhatti (a Christian), just wide,
two for many, it was reminiscent of
media activists). At the same time,months
the after the Taseer murder. general Zia's state vigilantism of the 1980s.
Claimed
perception of ngos as being donor-driven, by the Taliban, it served This
as a horrified the liberals but more inter-
westernised, ineffectual and elitistchilling
has follow-up message to any voice
estingly, met with a muted, and sometimes

Economic & Political weekly ЩХЗ February 18, 2012 vol xlvii no 7 *7

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hostile, response from the conservatives. was accused by social media activists of meant lengthy and often, frustrating
None openly supported Maya Khan. In having Taseer's blood on her hands, yet, decision-making procedures as emails
many ways she represents a generation of unlike with Maya Khan, there were in- fly back and forth, distrust prevails, and
young urban Pakistanis who may not show numerable blogs posted in Bokhari's there is often failure to agree on how to
strict adherence to Islamic trappings but support. Nonetheless, the controversy convert cyber enthusiasm into practical
are nonetheless conservative and tend to resulted in her being fired but almost im- strategies. There is also the identity issue
be overly anxious about issues of morality. mediately she was re-employed by another of diasporic Pakistanis and the legitimacy
Interestingly, even conservative male big tv channel, where she still works. of their opinions.
journalists were scathing over Maya Khan's Therefore, euphoria over the success When zealots set up a fan page on Face-
unprofessionalism and invasive journa- and efficacy of social media activism book celebrating the "heroism" of Mumtaz
lism, linking it to her apparent hypocrisy, may be premature. The optimism over Qadri in 2011, the liberals welcomed the
given her own "modern" and "liberal life- its potential may need to be tempered in removal of the offensive page by Facebook
style", photos of which were soon posted all view of the limitations of virtual activism. the same day. But when in May 2010, Face-
over the internet in a manner of reprisal. The private sector appears to be a softer book refused to remove the pages of an
While there are many reasons for such target over issues of perceived breach of alleged drawing competition of the Prophet
a unanimous support for privacy of cou- ethics. It is also easier to let one anchor or of Islam, which was globally considered
ples in public places in an otherwise con- producer become the scapegoat for media by many Muslims to be an invitation to
servative and strongly gender-segregated excesses but difficult to raise deeper, struc- commit blasphemy, there were divisions
society, the religious right has been am- tural issues. As an example, cases of sexual among social media activists with some
bivalent over intrusion in domestic issues harassment within media organisations
demanding such a ban and others uphold-
and relations. They also often argue have been reported in the recent past but ing freedom of expression. Many support-
against legislation on domestic violence these have not turned viral on social media, ers of this ban were Pakistani-American
based on a similar premise. unlike what happened with Maya Khan. users of social media. Although the courts
Secondly, if the nature of "offence" con- lifted the ban on Facebook a few weeks
Containing the Viral travenes perceived religious sentiment, later, it left unresolved the debate over
The Lawyers' Movement saw the success- then social media has so far only been able freedom of expression, the care of moral
ful use of both mainstream and social to make benign interventions. The case of
sensibilities and the broader question
media as a tool of political activism, even Aamir Liaquat, a religious scholar who about political activism and social media.
if the latter remained secondary to the hosted a tv programme on Geo tv for What is interesting in Pakistan today is
live and sustained, nationwide, long many years, is exemplary of such limita- that while social media still remains at
marches and mass movements. tions. In 2009, on one particular show he the fringe of larger movements, the divi-
However, during the aftermath of openly declared Ahmedis as wajib ul qati sions of non-virtual world are replicated
Taseer's murder it became clear that social (worthy of death/liable to be killed). His
with sharp divides between the liberal-
media, like mainstream media, could comments were believed to have provoked radicals and the religious-conservatives.
create an on-air controversy over Taseer's the murder of two Ahmedis within hours Unlike in other countries where social
efforts at defending a Christian woman of the broadcast. Interestingly, Liaquat is media became a tool used mainly by
and encourage the perception that he an adept user of social media himself and those who were pushing for change, in
himself was a blasphemer. After his so he engaged with his critics via twitter, Pakistan its use remains circumscribed
murder, social media activism was muted continued to host his show on Geo tv, left
by the significant presence of the status
in the face of the aggressive backlash of the channel in 2010 and is now head of the quoists and by the pressures of real politics.
the religious right, who cast anyone who religious channel (Quran tv) run by ary.
note
supported reform in the Blasphemy Law, The efficacy of virtual media cuts both
1 The governor of Punjab, party-member
as a legitimate target of reprisal. ways and is dependent on the actual pow- PPP, was shot 25 times by one of his own gu
in January 2011. The murderer, Qadri, cl
In the aftermath of such a "defeat", the er of those behind the computer screens.
he was motivated out of religious duty to
"vigil aunty" case of Samaa tv's Maya Lastly, social media activists are not Taseer for indirectly defaming the Proph
Khan seems to have boosted the confi- necessarily ideologically aligned. This has his pursuit of the cause of defending a
Christian woman imprisoned for blasphem
dence of cyber activists who claim that
their online activism pressurised the tv Training workshop on
channel into making the anchor apologise Computer Applications in Social Sciences
and then, fire her. What seems to have
The Centre is organizing its 25th annual training course on Co
been forgotten is that just prior to the
in Social Sciences (CASS) from May 8 to May 19, 2012 w
Taseer murder, another woman anchor support of ICSSR, New Delhi. Interested candidates are re
from the same channel, Mehr Bokhari, website http://css.ac.in to download the application form. For
came under severe criticism for fanning you can write to The Course Director, CASS, Centre for
hysteria over Taseer's support of the Narmad South Gujarat University campus, Udhna Magd
395007. Email: info@css.ac.in or vimaltrivedee@yahoo
Christian woman. At that time, Bokhari
18
February i8, 2012 vol XLVii no 7 Ш1 Economic & Political weekly

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Critiquing Landscape Urbanism
press and my architect peers. As I stood
about 30 feet above the ground (Friends
of High Line 2010), among verdant vege-
A View on New York's High Line tation and planting beds, it was easy to be
spellbound by this oasis of green. The park
offered panoramic views of the Hudson
LEON A MORENAS River in between run-down warehouses
with graffiti-embellished walls. I did not
Given the growing interest in know it at the time, but the park was a
landscape urbanism in Indian in recent months in introducing the quintessential example of landscape ur-
There Indian in recent
Indianseems architectural
architectural monthsto to be in growing introducing community interest the to
community banism. To me, there were two particular
architectural discourse, this
landscape urbanism. The Journal of Land- design features that were alluring: (1) the
article critically examines the
scape Architecture (la Journal) dedicated intelligent use of the train tracks that
history and impact of its most
its entire June 2011 issue to this subject, carved meandering pathways through the
while the introductory Indian issue of
prominent embodiment, New planting beds and flora, and (2) the crea-
the international architectural magazine tive use of the changing urban context.
York's High Line public park.
Domus in November 2011 featured six large These two points were linked, and as I
Landscape urbanism has not
glossy pages, with illustrations, on the eventually found out through my re-
contributed to social justice,
High Line, a public park built over a former search, told a much larger, much more
political emancipation, or elevated rail line in Manhattan, New York, complicated story.
deeming it the most visible success of this
ecologically saner designs, as its High Line's History and the
movement (Ciorra 2011). Landscape ur-
proponents have argued. Instead,
banism, as the guest editor of la Journal Ideology of Landscape Urbanism
while small privately developed
writes (Paul 2011: 30), "may play an im- Originally designed in 1929 and functional
portant role in theorising and conceiving
parks like the High Line have in 1934, the High Line was an elevated
the character and morphology of its [In- freight railway system 13 miles long, used
cornered most resources flowing
dia's] future development". This commen- to transport produce from the Meatpack-
to New York's parklands, far
tary attempts to unpack the claims of land- ing district without disturbing street-level
larger parks in poorer areas
scape urbanism by examining the writings traffic (Friends of High Line 2010). At that

face a decline due to of some of its earliest progenitors and by


dwindling time, the project cost over $150 million
presenting the lesser-known narratives of (the equivalent of $2 billion today), but
public investment.
its "impact" on New York's urban context. given the growth of interstate trucking, the
Landscape urbanism is a discipline that High Line lay abandoned from 1980
attempts to combine the art of landscape onwards (ibid). Then, in 2004, a non-profit
architecture with urban planning. It pro- organisation called the Friends of High
mises to integrate ecology with the tradi- Line selected James Comer Field Opera-
tionaly engineered, iniras tructur al systems tions and Dillier Scofidio+Renfro to design
that drive urban development. Given the reuse of this section of the line (ibid).
India's increasing urbanisation, the disci- Charles Waldheim, founder of the land-
pline can provide a potential model of scape urbanism movement, describes the
organising our urban environments. It has emergent practice, of which this project
been argued that landscape urbanism "has is emblematic, as (2006: 39):
allowed landscape architects to fill a pro- [T]he use of infrastructural systems and the
fessional void, as planning has largely opt- public landscapes they engender as the very
ed out of responsibility for proposing phys- ordering mechanisms of the urban field itself,
ical designs" (Waldheim 2006: 39). Profes- shaping and shifting the organisation of urban
settlement and its inevitable indeterminate
sional voids may have been filled, but the
economic, political and social futures.
question is: does landscape urbanism fill
(or create) other voids left by planning? So how is the reuse and redesign of the
It was a damp day in late July 2009, abandoned freight line used to "shape"
when I got to experience the $152 million and "shift" the organisation of the urban
High Line, called the "great West Side sto- setdement of West Side Manhattan
ry" (Pögrebin 2009: 6).1 Since its inaugura- around it? And what kind of "indetermi-
Leon A Morenas Qeon.a.morenas@gmail.com )
tion by New York's Mayor Michael nate" yet "inevitable" economic, political
is visiting faculty at the School of Planning and and social future for New York did the
Bloomberg in early June, the High Line
Architecture, Delhi.
had been receiving accolades from the High Line engender?

Economic & Political weekly »»avi February 18, 2012 vol xlvii no 7 19

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FACULTY POSITIONS
Applications in the prescribed applic
form are invited from the eligible can
for appointment to the posts of Assi
Professor in the Pay Band of ? 1 5600
in various Departments in the Facult
Arts, Applied Social Science & Huma
Commerce, Science, Education,
Inter-Disciplinary & Applied Scienc
Law, Management Studies, Mathem
Sciences, Music & Fine Arts & Soc
Sciences as per University rules
The last date for receipt of applicati
1.3.2012. For details, please see t
University website
www.du.ac.in/opportunities.
Application may be sent
through email at
dr_rec@admin.du.ac.in or
estabiv@yahoo.co.in
REGISTRAR

20 February 18, 2012 vol XLVii no ^ QBE! Economic & Political WEEKLY

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=: = COMMENTARY

In
ansports,
article titled
barbeques, picnics and walks. Their capital accumulation, backed by class priv-
High growing
Line's alterity is evidenced by at leastilege and
designe gross inequalities of political-
self two-mutually reinforcing factors: (1) the economic
(2006: 28) power" (2006: 28). The
argHigh
urbanism Line has in fact become "a huge magnet
"suggest
lack of public funding of social infrastruc-
away ture from
and human resources, and (2) the pri-for development"
the with more than
ob30 new
(whether vatisation of successful parks formal
eliminating projects already commissioned or partially o
tems that condition the distribution and cross-subsidisation to support other parks.5 constructed at the time of its inaugura-
density of urban form". In i960, the time of retirement of New tion (Kilgannon 2010). It is beginning to
And yet, there is a tendency among York's infamous "master builder" Robert resemble that predictable form of gentri-
those disciplines dealing with "nature" -Moses, the New York Department of Parks fication where "shopping malls, multi-
landscape architecture included - to com- and Recreation was the largest urbanplexes and box stores proliferate" as part
press complex phenomena into "a flat, parks system in the United States (us). Itof "a 'new urbanism' movement that
colourless cartoon" (Cronon 1995: 35), boasted over 35,000 acres of land and re-touts the sale of community and bou-
ignoring the social, political, economic andceived 1.4% of the city's funds for parks' tique lifestyles to fulfil (bourgeois) ur-
cultural particularities of the context in- maintenance and operations. Under May-ban dreams" (Lindsay 2010: 5).
volved.2 Corner challenges this view in hisor Bloomberg's gigantic 2010 city budget In his critique of landscape urbanism,
article, citing Marxist geographer, Davidof $63.6 billion, the fraction allocated to- American urban designer Graham Shane
Harvey (quoted in Corner 2006: 28) :3 wards New York City's parks was a paltry asserts that landscape urbanism is a res-
'the struggle' for (landscape) designers and 0.37% (or $239 million) (Arden 2010: 11, ponse to a particular type of American
planners lies not with spatial form and aes- 12). 6 These budget cuts have resulted inurbanism, typical to Detroit, characterised
thetic appearances alone but with the ad-
vancement of 'more socially just, politically the downgrading of the park's workforce by "Henry Ford's myopia, racism and anti-
emancipatory, and ecologically sane mix(es) to around 3,000 employees: around halfurbanism" (Shane 2003: 7). In embracing
of spatio-temporal production processes, the number that was employed in 1970. Solandscape urbanism for its small-scale and
rather than the capitulation to those processes,
while lower income parks like Canarsie bottom-up approaches, we should not lose
imposed by uncontrolled capital accumula-
tion, backed by class privilege and gross in- and Flatlands have just one dedicated sight of the fact that other cities - in the us
equalities of political-economic power.' maintenance worker each for 1,200 acresand elsewhere - are not organised along
In other words, the breathtaking de- of parkland, the 2.8 acres of the High Linethese principles and may not require a
sign of the High Line was only part ofare tended to by a team of maintenancelandscape urbanist response. He goes on
the job of the landscape urbanist; other workers including gardeners, custodians to remind us that "the foundations of a true
responsibilities included creating sociallyand bathroom attendants (ibid). In the urbanity" are social justice and equality.
just, politically emancipatory and eco- Bronx, 6,970 acres are patrolled by five-to- Visions for India's urban future have
logically balanced designs. six security officers, while the High Line is often drawn on models proposed by the
So did the landscape urbanism of the patrolled by double the number (ibid). west - the 1962 Master Plan of Delhi, for
High Line fulfil these other responsibilities? In the past, it was customary for parks example, is an outstanding example of
Sadly, not according to me, and certainly to pay close to 20% of their concessions American regionalism. Vision 2021 now
not according to the man that Corner uses revenues to build and maintain the parks envisages Delhi as "a global metropolis
to justify the practice of landscape urban- system, but with the increasing reliance on and a world-class city" and just like . New
ism. In 2010, David Harvey was quoted asprivate-public partnership models, "specialYork, there have been disturbing trends
commenting that (Lindsay 2010: 6): arrangements" are made so that the per-and increasing evidence of the city's poor
the billionaire mayor, Michael Bloomberg, is centage of revenues paid to the city areexperiencing growing spatial and social
reshaping the city along lines favourable to greatly reduced (ibid: 40). One "special injustice (Dupont 2011). Before we drink
developers.... and promoting the city as an
arrangement" is that the Friends of High the landscape urbanism Kool Aid that
optimal location for high-value businesses
and a fantastic destination for tourists..., in Line keep all of the money from park con- proposes "moving from both modernist
effect, turning Manhattan into one vast cessions. In diverting what was tradition- and New Urbanist models of ordering
gated community for the rich. ally city income that could have been re- the city . . .to more open-ended, strategic
Bloomberg is charged with "lever-distributed to other neighbourhood parks, models" (Corner 2006: 28), it may serve
age [ing] public land and money to turnthese profits have ended up as handsomeus well to critically examine - using the
parks into self-sustaining enterprises", ulti- rewards to philanthropically inclinedHigh Line as a template - whose strate-
mately creating a "two-tier parks system" individuals. Robert Hammond, the foundergies and whose ends are being served,
(Arden 2010: 6). On one tier are specta-of Friends of High Line, pocketed overand at whose expense.
cular, exclusive and expensive parks like$1.2 million over a 10-year period (ibid).
the High Line,4 Madison Square Park and notes

1 As
Union Square Park while on the other are Conclusions half
neighbourhood parks like Canarsie and It could be argued that parts of the move- Side
gres
Flatlands in Southeast Brooklyn, thatment have contributed to just what Corner the
provide space for plebeian activities like wished it would oppose: "uncontrolled run

2
Economic & Political weekly ВЗЯ February 18, 2012 vol xlvii no 7

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West 30th Street. The urban park then loops speaker of the New York City Council and "a lead- Editorial (2008): "Ms Quinn and the Potemkin Ac-
around the West Side rail yards, along 12th Avenue ing supporter of the High Line project" during her counts", New York Times , 5 April. Viewed on 1
veering close to the Hudson River terminating controversial third-term council re-election, re- January 2012: http://www.nytimes.c0m/2008/
on West 34th Street. From Friends of High Line ceived $54,343 campaign funding from the 04/05/0pini0n/05sat2.html
(2010): "High Line Maps". Viewed on 1 January Friends of High Line board members. While this Friends of High Line (2010): "High Line History",
2012: http://www.thehighline.org/about/maps practice of receiving campaign funding from pri- The High Line, viewed on 1 January 2012: http://
2 In order to answer the aforementioned ques- vate parties with vested interests is not consid- www.thehighline.org/about/high-line-history
ered illegal in the US, it is perceived as bribery in
tions, I will be drawing from the largely interdis- Harvey, David (1998): "Spaces of Insurgency" in
ciplinary fields of the humanities, detailed by most other countries of the world. In April 2008, J Beverley, P Cohen and D Harvey, Subculture
the New York Times unearthed a scheme that al-
Cronon in his 1995 work. He reminds us that and Homogenisation (Barcelona: Fundació
scholars from the humanities, which include an- lowed Quinn, "to hand out funds for pet projects Antoni Tàpies).
throughout the year". In 2008 alone, $4.5 million
thropologists, ethnographers, and literary theo- Kilgannon, Corey (2010): "High Line's Next Phase:
of public money, and $17.4 million since 2001, was
rists, have demonstrated that "the natural world Less Glitz, More Intimacy", New York Times ,
handed out in political favours, receiving only
is far more dynamic, far more changeable, and 19 December, viewed on 1 January 2012: http://
meek criticism that public funding was being "be-
far more entangled with human history" (1995: cityr00m.bl0gs.nytimes.c0m/2010/12/19/high-
stowed without accountability" (Editorial 2008).
24) than traditionally acknowledged. So what lines-next-phase-less-glitz-more-intimacy/?
6 Arden (2010: 12) also points out that the city of sudsredirect=true ,
the humanities offer, in addition to a shifting of
Chicago spends almost $150 million more on
focus from product to process, is an embedding Lindsay, Greg (2010): "David Harvey's Urban Mani-
approximately 14,000 acres of parkland.
of these products and processes within the larger festo: Down with Suburbia; Down with Bloom-
context of human history. berg's New York", Fast Company , 21 July, viewed
3 Note that Corner (2006) mis-cites the Harvey REFERENCES on 1 January 2012: http://www.fastcompany.
source. The quote is from Harvey (1998: 56). Arden, com/ 1673037/david-harveys-urban-manifes-
Patrick (2010)
Do to-down- with-suburbia-down-with-bloomb-
Public-Private P
4 Mayor Bloomberg's support of the High Line as
part of his larger agenda of encouraging public- Exploit ergs-new-york
Them?", Nex
private partnerships to renew the city was in- Viewed Paul, Rahul (2011):
on 1 "Landscape
January Urbanism", Journal
strumental in its creation. The High Line, a paltry org/buzz/entry/240
of Landscape Architecture, 31: 27-31.
2.8 acres of a partially completed park, cost a Ciorra, Pippo (2011):
Pogrebin, Robin (2009): "Renovated High Line Now
whopping $86 million in city, state, federal and Domus, 1(1): 76-81.
Open for Strolling", New York Times, 8 June, viewed
private donations (of which the philanthro-capi- Corner, on 1 January 2012: http://www.nytimes
James (2006 com/
talist group Friends of High Line contributed a im (ed.), 2oo9/o6/o9/arts/design/o9highline-RO.
The Landsc html
little over half) (Kilgannon 2010: 19). York: Princeton
Shane, Graham (2003): "The Emergence Arch
of Land-
5 In light of the current Commonwealth Games Cronon, scape Urbanism: Reflections of Stalking De-
William (1
scandal and the issues of corruption plaguing the of Nature" in W Cronon (ed.), Uncommon troit", Harvard Design Magazine, 2003(19): 1-8.
country, there is a third factor worth mentioning. Viewed on 1 January 2012: http://crtl-i.com/
Ground: Rethinking the Human Place in Nature
This involves the unholy nexus between private (New York: WW Norton & Company). PDF/GrahamShane_OnLandscape.pdf
interests and elected representatives who reallo- Dupont, Veronique (2011): "The Dream of Delhi as Waldheim, Charles (2006): "Landscape as Urbanism"
cate dwindling public funds towards the more a Global City", International Journal of Urban in С Waldheim (ed.), The Landscape Urbanism
exclusive parks. Christine Quinn, the current and Regional Research, 35 (3): 533-54- Reader (New York: Princeton Architectural Press).

Political Challenge of an
requires immediate and wise interven-
tion. With limited land and unlimited as-

Intensifying Conflict over Land


pirations to owning it, the question of how
the government and society address the is-
sue of land acquisition and ownership
will have very important ramifications,
JAYANTA BANDYOPADHYAY, TAPAS ROY including political ones.
The British introduced the Land Acqui-
How much of the benefits of
sition Act in 1894 for legal takeover of
economic growth greater conflicts in the history of private
accrue lands for public purposes.
direct The
to farmers and workers who lose
Nothing humanity greater
humanity conflicts has
than the tussle than
overprobably in the the tussle history caused over of present Land Acquisition (Amendment)
land. In the Mahabharata, turning down Act, 1984 is a modified version of this. Its
their livelihoods when agricultural a proposal to give his cousins part of the use in independent India has triggered
land is taken over for development?kingdom, Duryodhana says he will not part hundreds of popular protests, including
with any land, not even the extent a needle those over the 2005 proposal to establish
If handled properly, the Land
can stand on, without a fight. 513 special economic zones (sezs). The
Acquisition and Rehabilitation dismal record of the State in rehabilitat-
In present-day India, the pressure on
and Resettlement Bill 2011 offers ing and resettling those involuntarily dis-
land has multiplied, as have the intensity of
an opportunity for equitably conflicts over it. Establishing control over placed by land acquisition inspires very
little public confidence.
addressing the interests of diverseland, with the help of the Land Acquisition
(Amendment) Act, 1984 or otherwise, A Land Acquisition and Rehabilitation
sections affected by the land and Resettlement Bill, 2011 (hereafter
continues to generate widespread social
acquisition process. tensions. Land-related conflicts, whether Land Bill) was approved by the cabinet
in the forested heartland of the country, and introduced in Parliament on 7 Sep-
Jayanta Bandyopadhyay (jayanta@iimcalacAn )
is at the Centre for Development and Environment
the bauxite-rich areas of Odisha or the ag- tember 2011 by the minister of rural deve-
Policy, Indian Institute of Management, ricultural hinterlands of West Bengal, have lopment. It was referred to the Standing
Kolkata and Tapas Roy ( email2roys@gmail . become all too common. From the point Committee on Rural Development on
com) is at the Indian Institute of Planning and 15 September "for examination and
of view of governance, this issue, which
Management, Kolkata Research Centre.
touches the largest number of people, report". The Land Bill, meant to replace

22 February 18, 2012 vol XLVii no 7 ЦШ Economic & Political weekly

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= COMMENTARY

the Land Acquisition Act, 1894, being a distant and passive observer multi-crop irrigated land for public pur-
proposes
a unified legislation for acquisition of purchases of land are made pose to allowing acquisition of irrigated
while direct
land and rehabilitation mechanisms for by industry.4 Even for state government multi-crop land up to 5% of the total land
all affected persons. projects, land acquisition is to be recom- area in a district.
mended only if there is the consent of all Opinion on land acquisition is divided
Urgency of Land Bill 2011 the landowners concerned. among bodies representing industry
While the displaced victims of past land In contrast, the National Advisory such as the Federation of Indian Cham-
acquisition processes have been protest- Council (nac) wants the states to get bers of Commerce and Industry (ficci)
ing against ill-implemented or inadequate involved when "other less-displacing al- and the Confederation of Indian Indus-
rehabilitation and resettlement (r&r) ternatives are not available" and "the try (си). While the en has taken the stand
provisions, those getting the acquired acquisition (is) only for public purposes".5 that the government cannot relieve itself
land, e g, industrialists, are no less un- The nac does not exclude private indus- of the responsibility of acquiring land for
happy, albeit from a different perspec- try from the definition of "public purpose" industry, the ficci holds that market-
based land acquisition will be transpar-
tive. A recent study reveals that delays in if the benefits are to largely accrue to the
land acquisition for industrial projects common people. However, the Land Bill ent and more favourable to farmers.8
are likely to endanger investments stipulates that it is essential to have the The National Alliance of People's
worth $100 billion in India in the near consent of at least 80% of the landowners Movements (napm) has opposed the ap-
term. Eighteen delayed projects, which in an area to be acquired. There are dif- plication of the principle of eminent do-
will have an investment amounting to ferences even on returning unused ac- main if the government is acquiring land
Rs 2,44,815.5 crore ($49>3i7.3 million), quired land to the original landowners for private corporations and demanded
are reportedly stuck at the stage of mem- with the governments of Uttar Pradesh, the extension of r&r packages to all sell-
orandums of understanding (mous).1 Tamil Nadu and West Bengal enacting ers (including past ones) even if the ex-
Large-scale land acquisition for indus- divergent legislations. According to Sec- change is at market price. It has also said
trialisation has always been projected by tion 48В in Tamil Nadu, the government the Land Bill should be titled the "Devel-
economists as essential for economic can return land to the original owners opment Planning, Resettlement and
development and, therefore, eradication under certain circumstances. In West Rehabilitation Bill", ensuring no forcible
of poverty. But industrialists, concerned Bengal, the Singur Land Rehabilitation
acquisition and protecting the rights of
with the cost and opportunity aspect andofDevelopment Bill, 2011, passed by thecommunities over their land and every-
assembly, permits returning landthing
their investment plans, in general desire to attached to it. The napm holds that
unwilling
almost off-the-shelf acquisition of acqui- farmers who refused to take
the focus should be on development, not
red land. Their interest in the human just acquisition, recognising that those
money during the acquisition.6 However,
problem of r&r and the cost incurred in who surrender land are investors in the
by Uttar Pradesh, the Urban Planning
and Development Amendment Bill, 2011
the displaced are limited to a few corporate development process, not victims of it.9
prevents farmers from reclaiming their
social responsibility initiatives. The rest In the post-liberalisation year of 1996,
is left to the government to sort out. land once it is acquired.7 the Supreme Court observed, "Publication
of declaration (by the government) under
The Land Bill 2011 follows the guideline
Divided Opinion All Round provided in the nac recommendations Section 6 is conclusive evidence of public
on "public purpose", a position criticised
The legislative assembly elections in Uttar purpose".10 However, in 2011, it remarked
Pradesh have been an important factor by industry. The union government has, that "the application of the concept of
behind the Land Bill 2011 being tabled however,
in been quite pro-industry in 'Public
de- Purpose* must be consistent with
Parliament at this time. After serious criti-
fining "fair price" and reduced the com-
the constitutional ethos and especially with
cism from the judiciary as well as the op- the Fundamental Rights and Directive
pensation liability in the Land Bill, which
prescribes four times the market value
position parties, in 2011 the Uttar Pradesh Principles of the Indian Constitution".11
All this has generated cönfusion and
instead of six times as suggested by the
government radically enhanced the quan-
tum of compensation for acquired land nac. has added to the many difficulties of
to It has also shifted from its original
draft of restricting acquisition of any
placate farmers who were to be displaced.2 arriving at a consensus, only pointing to
The ruling Trinamool Congress in West High-quality research papers are invited for a volume to come out of a seminar on
Bengal, which opposed land acquisition the topic titled, "Changing Forms of Communalism and Future of India's
in Singur and Nandigram by the formerMinorities", to be held on March 13-14, 2012 @ Mir Anis Hall, Jamia Millia Islamia,
New Delhi. Preference will be given to papers with a focus on Muslims from
state government, has taken the positionnon-North India, Christians, Sikhs, Jains and other minorities dealing with themes
that there will be no involvement of the such as role of the state, media, civil society in the understanding of communalism
government in the process of land acquisi- and secularism. Editor's decision is final and binding. Deadlines May 2012.
For details, contact
tion for private industry.3 In a recent lec- Mujibur Rehman (smujib2000@yahoo.com)
ture deíivered in Kolkata, Nobel laureate Volume Editor

economist Joseph Stiglitz expressed Dr К R Narayanan, Centre for Dalit and Minorities Studies,
doubts about the practicality of the state

Economic & Political weekly QBS9 February 18, 2012 vol xlvii no 7 23

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COMMENTARY E

the need of a new Act that clarifies and from agriculture to industry, and has reforms, landholding in India is quite
reconciles all these issues. neglected the issue of land altogether.12 skewed. The All-India Report on Agricul-
In the Land Bill 2011, there are con- ture Census 1991-2000 reveals that in
Sharing of Prosperity cerns about food security and the acqui- 1995-96, as many as 61.2% the holdings in
At the present stage of India's economic sition of multi-crop land for industry hasthe country accounted for only 17.2% of
development, agriculture is a distant thirdbeen restricted to a maximum of 5% of the total operational landholdings, con-
in the creation of value through the usethe total land in a district. firming a high degree of fragmentation.14
of land. The service sector generates the The question India faces is how much As a result, over decades, a large number
highest value per unit area of land, fol- of the benefits of economic developmentof marginal farmers have moved into the
lowed by manufacturing. Thus, from a will accrue directly to farmers who lose "absolute landless" or "mere landless"
narrow economic point of view, it makes their land and livelihood. For too long, (owning up to 0.002 acres) categories.
sense to transfer scarce land from agri-poor people have been hearing about the Rich peasants, on the other hand, have
culture to industry or the service sector. percolation theory and inclusive growth largely moved to urban areas and employ
But such a mechanical calculation would from policymakers, which do not reflect migrant agricultural labourers for farming.
stir up the politically-sensitive debate the reality they face. But to achieve the During the same period a new group,
over using fertile land for industrialgovernment target of rapid economic which earns a significant income from
purposes and. the threat to food security. growth, there may not be much choice non-farming , activities, has emerged in
However, in this era of wider inter- other than transferring large areas of rural India and this has created a new po-
national trade, such a shift may not cause land from agriculture to industry. Thelitical alignment. With its economic and
food insecurity. Land Bill 2011 provides an opportunity social clout, this group occupies the polit-
That industrialisation may lead to food for the government to ensure that there ical space partially vacated by rich absen-
shortages is an alarmist view. The fractionreally is inclusive growth while doing so. tee landlords and the landless and mere
of agricultural land required for industrial landless look to it for economic and social
production is too small to make more Importance of Rural Voters support. Thè rise of caste-based politics in
than a dent on overall food production. Of the 1.21 billion people in India, nearly north India is an indicator of this shift.
For this reason, the literature on eco- 69%13 live in villages and depend onWith its large numbers, this new alliance
nomic development has paid almost ex- agriculture for a livelihood, directly or in- has been demanding far more than what
clusive attention to the transfer of labour directly. Due to the lack of effective landthe present Land Acquisition Act offers.

Forced Migration
^ Tenth Annual Forced Orientation 2012
Migration 2012 Course on
Applications are invited for the Tenth Annual Orientation Course on Forced Migration to be held in Kolkata,
India (1-15 October 2012)
The Course, certified by the UNHCR and Calcutta Research Group, will be preceded by a two and a half month long
Ifrogramme of distance education. It will consist of workshops, lectures, other interactive exercises, and field visit. The
workshops will be based on assignments sent to the selected participants two months prior to the programme for necessary
preparation. The programme is intended for human rights activists, policy makers, academics, refugee rights activists and
others working in the field of human rights and humanitarian assistance for victims of forced migration. The curriculum deals
with themes of nationalism, ethnicity, partition, and partition-refugees, national regimes and the international regime of
protection, issues relating to regional patterns of forced migration in South Asia, internal displacement, the gendered nature
of forced migration and protection framework, resource politics, climatè change and environmental degradation, and several
other themes related to the forced displacement of people. Selected candidates will have to complete assignments based
on the workshop themes before they join the programme in Kolkata, India.
Applicants must have (a) 5 years experience in the work of protection of the victims of forced displacement, OR (b)
experience in research work or policy studies on forced migration, (c) proficiency in English. Besides giving all necessary
particulars, application must be accompanied by two appropriate recommendation letters and a 500-1 000 word write-up on
how the programme is relevant to the applicant's work and may benefit the applicant.
There is a bursary for participants from the countries of South Asia. However, this will not apply to any candidaté applying
from outside South Asia. Therefore, the candidates selected from South Asia will have to pay INR7000/ US $150 each as
registration fee, while those from outside South Asia will have to pay US $1200. Inquiries relating to the application procedure
are welcome. Selected participants will not be required to pay for anything else besides the registration fee.
Applications, addressed to the Course Coordinator, can be sent by e-mail to forcedmigrationdesk@mcrg.ac.in or by post
to the following address and must reach CRG not later than April 10, 2012: Mahanirban Calcutta Research Group, GC 45,
Sector 3, Salt Lake, Kolkata 700 106, West Bengal, India. Phone: +91 (33) 2337 0408
For information on past courses pleáse visit http://www.mcrg.ac.in/winter.htm

24 FEBRUARY 18, 2012 vol XLVii no 7 Q3S1 Economic & Political WEEKLY

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This has created a serious dilemma for There are more complications in theowner for industrialisation unless vest-
way of actual implementation of com-ed through the acquisition process of the
the ruling elite when it comes to choosing
between growth and equity. pensation packages. Today, the price of state. In Singur, land so acquired consti-
land in suburban areas begins increas- tuted a major part of the 400 acres of
Context of Land Bill 2011
ing as soon as there is a rumour that an disputed land acquired for Tata Motors'
industry or business may come to theproposed automobile plant.
Electoral arithmetic pushes the political
vicinity.
elite to present a farmer-friendly face on Speculators with greater access
Conclusions
the land acquisition issue. At the to
sameinformation quickly get hold of large
time, the economic policies of the areas
unionof land. When construction for an The Land Bill offers an opportunity for
government require otherwise. automobile
It is plant at Singur, West Bengal,equitably addressing the interests of
Land the land price in and around thediverse sections involved in the land
against this background that the began,
Bill гон has been placed in Parliament.
site rose by more than 10 times the highestacquisition process. Industrialisation in
The bill makes an attempt to address
ever
twosale price in that locality. Such spec-countries such as India needs to be sup-
of the three most contentious issues in the transactions can easily make losersported by a more innovative and equita-
ulative
Land Acquisition Act, 1894, leaving the
of evictees in the post-acquisition scenarioble framework for land acquisition and
third unanswered. These are (1) deter-
and add to dissension. The r&r packager&r. Close attention also has to be paid
in the Land Bill, which provides theto the public purpose in proposals for
mining a clear definition of fair compen-
sation; (2) defining the scope and limits
option of employment to losers of landland acquisition. A large section of the
of public purpose for acquisition; and a qualifying clause (minimum rural population is fully dependent on
without
(3) acquiring land under litigationland
in aarea) for eligibility, is another pos-agriculture for its livelihood and cash
proposed project site. sible source of disputes. In a country withcompensation for land is not an attrac-
a highly fragmented landholding patterntive option to it. This makes land for
Fair Compensation and a high level of unemployment, suchland an important alternative. The up-
After using the unfair compensationlegislation may have serious negativecoming discussions in Parliament on the
packages outlined in the Land Acquisi- implications for any investment proposal. Land Bill 2011 will have to recognise that
tion Act 1894 for decades, electoral calcu- development and democracy have arrived
lations seem to have pushed the politicalPublic Purpose at the crossroads on the land question
elite to enhance the level of compensationApart from the developmental and strate- and keep public interest in mind, rising
in the Land Bill to give it a farmer-friend- gic needs of the government, land is also above narrow electoral interests.

ly image. However, the control of the needed by the private sector. As per the
urban rich over the political machinery has Land Bill, 80% of the affected families in notes

ensured that the cash compensation patha project area have to agree to any pro- 1 As
tion
remains wide open. No justification or ref-posal to acquire their land. It is not clear
2 "UP
erence is given to vindicate the multiplier,how such quantitative assessments will The H
which is paid over and above an inflation-be made. The definition of "affected peo- 3 "St
Proje
resistant annuity for 20 years. The land-ple" is also open to interpretation. 2011.

owning population in rural India is small In today's world, the distinction bet- 4 "Hands-off Land Policy May Not Work:
in number. With more than 60% of the Stiglitz", Times of India, 12 January 2012.
ween private industry and public interest
5 National Advisory Council, "Land Acquisition,
rural population being either landless orhas become a complex issue that can at Resettlement and Rehabilitation", 25 May 2011.
mere landless, they will hardly benefittimes be politically manipulated. In India, 6 "Governor's Assent to Singur Land Rehabilita-
tion and Development Bill, 2011", GK Today:
from such liberal compensation. the United Progressive Alliance (upa) Legal Current Affairs, 1 August 2011.
The issue of compensation for thosegovernment tabled the Land Acquisition 7 "UP Changes Land Law, Farmers The Worst
Hit", Times of India, Kolkata, 12 August 2011.
who do not lose land as a result of acqui- (Amendment) Bill, 2007 in Parliament to
8 "FICCI, СИ Split Over NAC Land Acquisition Rec-
sition, but lose their livelihoods is not ad-
redefine the very definition of public pur- ommendations", at http://www.domain-b.com/
economy/general/20110606, dated 6 June 2011.
dressed in the present Land Acquisitionpose after the widespread protests over
9 Submission on Land Acquisition before Parlia-
(Amendment) Act, 1984. There are some land acquisition for sezs. But it lapsed in mentary Standing Committee by National Alii-
provisions in the Land Bill for compen-2009 when the 14th Lok Sabha was dis- ' ance of People's Movement, 2 November 2011;
see napm-india.org/node/524.
sating those indirectly affected in the ac-
solved. This only underlines how urgent a 10 Scindia Employees Union vs State of Maharash-
quisition process. But in the present sce-clear description of public purpose is, tra and Others, reported in 10 SCC 150, 1996.
1 1 Dev Sharon and Others vs State of UP and Others,
especially in the use of eminent domain.
nario of using migrant labourers for culti- 7 March 2011, Supreme Court of India.
vation, it is difficult to prepare an accurate 12 Ghatak, Maitreesh and Parikshit Ghosh (2011):
list of such people and there is no clearAcquisition of Litigated Land "The Land Acquisition Bill: A Critique and a Pro-
posal", Economic & Political Weekly, Vol 46, No 41.
There is no attempt to address the issue 13 Census of India; see http://censusindia;gov.
direction in the bill for identifying them.
This will make any list a subject of con-of acquiring land under litigation in in/2oii-prov-results/paper2/data files/india.
14 "Land Use and Ownership in India"; at http://
tinuing disputes and provide the politicalthe bill despite the fact that no litigated www.empowerpoor.org/backgrounder.asp?
elite opportunities for oné-upmanship. land can be acquired by an individual report=i62.

Economic & Political weekly иш February 18, 2012 vol xlvii no 7 25

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All use subject to https://about.jstor.org/terms
Politics Overpowering Welfare
for particular types of work, employment
relationships, sizes and establishments.
Only a handful are applicable universally
Unorganised Workers' Social or cover a broader swathe of the work-
force. Thus, there is grave need for laws
Security Act 2008 to ensure "comprehensive protection"
to informal workers. Besides the dearth
of legal machinery exclusively for unor-
TINA PUTTA, PARTHAPRATIM PAL ganised workers, the implementation of
existing piecemeal laws such as the Mini-
An analysis
mum Wages Actof 1948, Equal Remunera- th
Workers' Security Act (uwssa) 2008 was tion Act 1976 and so on has been utterly
Social S
2008 The publicised
shows Security
publicisedUnorganised Act as
as a grand initiative a
by(uwssa) grand Workers' initiative 2008 Social was by disappointing.
its dis
the incumbent government to bring the Owing to the long-standing need for
original
hitherto neglected unorganised workers Nationa
strong legislation to support unorganised
Enterprises
into the mainstream of Indian economy workers, the nceus in
recommended several th
through provision of social security bene- measures to ensure "minimum conditions
Sector proposal.
fits almost at par with organised sector of work", including "national minimum
measure of polit
workers. But a deeper analysis of the social security benefits" to hitherto de-
ahead
uwssa unmasks a game of politics rather of the 200
prived and marginalised unorganised
than a move towards welfare. The uwssa
elections, the
workers.1 A five-year timeline and aleg
federal

few is too loose to serve any benefits of theorganisational model were proposed, with
timelines or
target population, and too weak to not bethe State Social Security and Welfare
central and state
manipulated by central and state govern- Board handling the responsibilities of
provide
* ments trying to avoid their for unor
responsi-implementation with the assistance of the
Current schemes
bilities. In fact, unlike other importantWorker's Facilitation Centre, and supervi-
welfare acts such as the Mahatma Gandhi
sion of National Social Security and Wel-
Act's ambit focu
National Rural Employment Guarantee fare Board. A 13-point action plan to cover
poverty line wor
Act (mgnrega), the uwssa in effect both agricultural sector (the marginal and
to leave
makes none of the promises toout a lar
the bene- small farmers) and non-agricultural sector
vulnerable
ficiaries that it has claimed. workf
and its workers was also envisaged.
This analysis broadly reviews the While there was consensus on the
Social Security Bill 2006 submitted by need for concerted effort regarding social
the National Commission for Enterprises security for unorganised workers, some
in the Unorganised Sector (nceus), criti- commentators recommended extension
cally details the uwssa as it took shape, of the various ongoing social security
and notes reactions to the legislation schemes instead of legislation (Jose 2006).
and the present status. Others raised grave doubts about India's
capability to go on to such an ambitious
Proposal to Act path (O'Keefe and Palacios 2006: 3483),
A report on Social Security for Unorga- given its present levels of "income, urbani-
nised Workers (nceus 2006) and Condi- sation and institutional capacity". Rao et al
tions of Work and Promotion of Liveli- also emphasised the absence of "viable
hood in the Unorganised Sector (nceus enterprises", "poverty alleviation pro-
2007) were presented by the nceus in grammes" and "congenial macro policies"
2006-07. These documents recognised the and claimed that social security is a matter
livelihood problems of nearly 92% of of "putting the cart before non-existent
India's total workforce as a national horse" (2006: 3488).
problem. The focus was on the existingThe logic behind differentiating unor-
ganised workers between below poverty
disparity between the organised and un-
organised sector workers with respectline
to (bpl) and above poverty line (apl)
minimum wages, social security benefits
was to exploit the beneficiaries' potential to
Tina and decent working conditions.
Dutta ( contribute for their social security bene-
tinad09@i
Parthapratim fits to
The nceus report on conditions of work the fullest extent. For
Pal (example,
par the
areat the Indian Instit
proposal suggested a user-contributory
for unorganised sector workers argues that
Calcutta.
_ most labour laws in India are applicable
social security scheme for apl unorganised

26 FEBRUARY 18, 2012 vol XLVii no 7 ESE3 Economic & Political weekly

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workers. The proposal was criticised for schemes are the Indira Gandhi National
registration of unorganised workers and
not giving due attention to India's unpaid issuance of identity cards and so on. How-Old Age Pension Scheme (ignoaps),
women workers' social security needs National Family Benefit Scheme (nfbs),
ever, they are envisaged only as advisory
(Neetha 2006). However, given that iden- Janani Suraksha Yojana (jsy), Handloom
boards with no binding authority on the
tification and quantification of women's Weavers' Comprehensive Welfare Scheme
central and state governments. The boards
work in India is very difficult, a nascent may be well equipped and well staffed but(hwcws), Handicraft Artisans Compre-
social security bill may not have been hensive Welfare Scheme (hacws), Pension
have no power to compel the government
well equipped to deal with these complex to undertake suggested programmes. to Master Craft Persons (pmcp), National
issues immediately. The proposal bestowed substantial Scheme for Welfare of Fishermen and
However, an overall analysis of the Training and Extension (nswfte), Jana-
responsibility upon the Workers Facilita-
proposal made it clear that the proposal's tion Centres (wfcs). However, there are
shree Bima Yojana (jby), Aam Aadmi Bima
objectives were relevant, needed and Yojana (aaby) and the Rashtriya Swasthya
no concrete plans, guidelines or a time-
much awaited, though limited institu- Bima Yojana (rsby).
line for setting up of wfcs in the uwssa
tional capacity was the major hurdle in (goi 2008: 6). The uwssa allows the However, many scholars have debated
the path of universal social security. registration of all the workers aged 14 andthe necessity of the uwssa when it just
Based on the proposal, the uwssa 2008 above who will give a self-declaration ofpulls together a bunch of existing social
was unveiled on 30 December. However, their unorganised working status. How- security schemes. At the Indian Labour
the journey from bill to uwssa was not ever, it is not clear how the registering au-Conference 2009 the trade union repre-
straightforward. The whole idea of the thorities will avoid moral hazard. sentatives criticised the uwssa for being
bill - facilitating a right-based system of just an amalgamation of all existing social
The Sum of Its Parts security schemes with no new benefits.2
social security for unorganised workers -
seemed to be lost in the new legislation. A close look at the listed social security
The uwssa lists all the 10 ongoing social
While the social security proposal at- schemes shows that some are targeted at
security schemes and six related sup-
tracted considerable scholarly attention, porting Acts under its ambit. These
specific groups only (such as hwcws,
the uwssa received little scholarly atten-
Table 1 : State-wise Coverage of RSBY Scheme till 29 March 2011
tion after it came into effect in May 2009,
State

with the exception of a commentary Selected (1) Enrolment Enrolment in Total BPL BPL Families % Coverage
(Goswami 2009) in the Economic &
Political Weekly and one on the official Andhra Pradesh

website of the Communist Party of India


Arunachal Pradesh

(cpi) (Shankar 2009).


Assam

Bihar 37 23 10 92,12,275 50,54,337 54.87


The uwssa promises little and leaves
Chandigarh

the majority of the provisions to the whims Chhattisgarh 18 8 8 15,08,002 12,17,829 80.76
of the central and state governments, put- Delhi

ting little compulsion to formulate suitable Goa

policies within some definite time limit Gujarat 27 21 5 29,53,347 19,19,086 64.98
(goi 2008: 2-3). The uwssa is even weaker Haryana

when it comes to defining the responsi- Himachal Pradesh

bilities of state government (ibid: 3). Jammuand Kashmir

The only strong requirement is the Jharkhand

constitution of a National Social Security


Karnataka

Board (nssb) and State Social Security


Kerala

Board (sssb). However, the timeline for


Madhya Pradesh

Maharashtra

forming these boards is missing. There are


Manipur

fine details given about the composition Meghalaya

and functions of the boards. However, the Mizoram

sssb excludes an important component, Nagaland

i e, the representation of municipal bodies Orissa

and village panchayats, and local level Punjab

government machineries in its structure. Rajasthan

These boards will recommend to the Tamil Nadu

concerned governments suitable schemes


Tripura

for unorganised workers, advise in the


Uttar Pradesh

administration and review schemes formu-


Uttarakhand

West Bengal

lated by the government, the record- Total

keeping at state and district levels and the Source: http://www.rsb

Economic & Political weekly H3S3 February 18, 2012 vol xlvii no 7 27

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COMMENTARY = ^
as contract labourers and other in- Nadu
hacwSjsuch pmcp, and Goa, the scheme has zero
nswfte),
category (2) the provision of min- coverage. Thus there is large
formal workers,workers withi interstate
more imum conditions of work such as timelyvariation in the coverage ofOthe
specifically. the scheme.
generalwages, working
names hours, minimum wages, But a more crucial question is that even
(ignoaps,
aaby, holidays, etc, (3) the
and provision of unem-if the coverage
rsby) are of the bpl families
also had
bpl ployment allowance (as is mgnrega),beenof
categories 100%, how many unorganised
unorg
only. (4) grievance redressai the
While mechanisms,workers would fall into the category and
Social Secu
had and (5) special provisions for women
security be able to avail this facility?
provisions f
APL workers regarding sexual harassment,
unorganised worker
completely etc. Below Poverty Line?
security issues, wage gap,neglected the
hurt thoseMost state governments
workers in the 2010We carried out an exercise to see to what
who a
above Indian Labour Conference
the poverty claimed to extent the unorganised working
line. popula- M
absencehave initiated
of the rsby proper
in their states as tion is being covered by these bpl tar-
legislat
a stand-in for the uwssa.3
contracts, even Under the geted social
apl security schemes.
unor If in a
are rsby (launched on 1 exploited
largely October 2007), family of five, one or two person(s)
in th
The families of two adults and up to three
original work(s) and get(s) the minimum stipu-
proposal re
dependants are issued "smart cards" for lated wages, in how many
user-contributory days would
social
for aplavailing cashless hospitalisation and the family cross bpl criteria?
workers, which
and medication facilities up to Rs 30,000
feasible, but in The bpl criteria
has for the family have
not
space ina year. Table
the the state- been derived for the
1 (p 27) presentsfinal following two cases
docume
In coverage status of the scheme as (goi 2009):the
thatwise respect, (1) by doubling individual-
uwss
since it documented
covers in its official website.4 level bpl income, assuming
just a two earning
fract
ganised Up to
workforce.
29 March 2011, 376 districts had members in the family, and (2) by tripling
There been selected and around
are many 53% bpl fami- individual-level income, assuming three
other as
security lies enrolled under
left the scheme. Amongcompletel
earning members in the family. Clearly
the uwssa (Shankar 2009; Goswami the states, Tripura, Himachal Pradesh the latter case lifts the bpl level very
2009) (1) agricultural labour unorgan- and Chhattisgarh lead the race with high and the poverty ratio at the family
ised workers in the organised sector above 80% coverage; in Rajasthan, Tamil level increases substantially. However,
Table 2.1 : Calculation of Number of Days of Work for a Family to Cross the BPL Criteria, 2008-09y Rural
States Minimum Wages (Rs Per Day) BPL Criteria 2004-05 (Rs Per Month) for

2006-07* 2008-09# lndividual+ Family 2 Family 3 Family 2 OneMember TwoMembers Family 3 OneMember TwoMembers
(Two Members (Three Members 2008-09# Works Work 2008-09# Works Work

Andhra Pradesh

Assam

Bihar

Chhattisgarh

Delhi

Goa

Gujarat

Haryana

Himachal Pradesh

Jammu and Kashmir

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Orissa

Punjab

Rajasthan

Tamil Nadu

Uttar Pradesh

Uttarakhand

West Bengal

India

Family 2: BPL criteria for


# Figures for 2008-09 are
The CPI-RL growth rate
Source: * indiastat.com +

28 February i8, 2012 vol XLVii no 7 цш Economic & Political WEEKLY

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Table 2.2: Calculation of Number of Days of Workfor a Family to Cross the BPL Criteria, 2010-11, Urban
States Minimum Wages (Rs Per Day) BPL Criteria 2004-05 (Rs Per Month) for

2006-07* 2010# Individuals- Family 2 Family 3 Family 2 OneMember TwoMembers Family 3 OneMember TwoMembers
(Two Members (Three Members 2010# Works Work 2010# Works Work

Andhra Pradesh

Assam

Bihar

Chhattisgarh

Delhi

Goa

Gujarat

Haryana

Himachal Pradesh

Jammuand Kashmir

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra 65 93.01 631.85 1,263.7 1,895.55 1,999.40

Orissa

Punjab

Rajasthan

Tamil Nadu

Uttar Pradesh

Uttarakhand

West Bengal

India

Family 2: BPL criteria fo


# Figures for 2010 are
The CPI-IW growth rat
Source: *indiastat.com

this is considered as an extreme case. number of days varies widely across same time. Thus, they could cross the
the states. The median number of daysofficial poverty line very easily, but given
The figures have been updated using the
consumer price index for industrial
comes out to be 13 if one family membertheir large family sizes, socio-economic
works and seven if two family membersstatus and poor access to social sector
workers (cpi-iw) for urban areas, and with
cpi for rural labourers (cpi-rl) for rural
work under the first case; and 19.5 andservices, their living conditions remain
areas. Further to calculate the number 10 under the second case. Thus, even poor. The calculations demonstrate that
considering the high-level bpl criteriathe majority of the unorganised workers
of days, two cases are considered: (i) one
person in the family is employed, and for families, on an average 10-20 days ofand their families are deprived of much
(2) two persons are employed and receiveemployment in a month push familiesneeded social security facilities just
the minimum wages for unskilled work.5 outside the poverty line. because they lie above the poverty line.
Table 2.2 presents similar calculations
The wages for unskilled jobs are the lowest
among all types of works and these are for urban areas. At all-India level, urbanReaction and the Politics
used to calculate the maximum number of Welfare
families cross the bpl mark if one family
member works for 11 days or two mem-Most unorganised workers battle fears
of days of work/employment in a month
for crossing the poverty lines. The refer- bers work for six days under the firstof uncertainty and failure in their daily
ence years for rural and urban areas arecase. The corresponding figures are 16life. There were large expectations from
2008-09 and 2010-11 respectively, de-and eight days for the second case. Giventhe social security package, but the legis-
pending on the availability of the data. the high cost of living in urban areas,lation turned out to be weak, leading to
Table 2.1 (p 28) shows that in rural more numerous job opportunities andwidespread dissatisfaction. Unorganised
areas, at an all-India level, a familyhigher wages than in rural areas, it isworkers - construction labourers, sweep-
crosses the poverty line (in case 1) if onevery unlikely that the sole breadwinner ofers, dhobis, coconut tree-climbers, child-
member works for only nine days or twoa family would work for only 16 days andcare providers, hand-embroidery artisans,
members work for only five days in atwo workers from a family would work for bead makers and small shop vendors -
led a demonstration with the Unorgan-
only six to eight days in a month.
month. In case 2, i e, with a relatively high
BPL criterion, a family goes above the In fact to meet their daily expenses,ised Workers' Federation in Chennai in
poverty line in only 13 days if one memberthese poor workers work for more daysJuly 2009 ( The Hindu 2009). In addition
is employed and in seven days if two in a month and also engage in part-timeto the gap in coverage of health schemes,
members are employed. The calculatedjobs and multiple assignments at the another grievance raised by these workers

Economic & Political weekly Щ32Я February 18, 2012 vol xlvii no 7 29

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COMMENTARY ==

was the issuance of cards by( Business Standard 2010). No new schemes 2 Summary Record of Discussions of the 42nd
the village
Session of Indian Labour Conference held on
seem
administrative officers only to to be in
the the pipeline to address the
agri- 20-21 February 2009 in New Delhi. Last viewed
issues
cultural labourers in a family andsuggested
not toby the bill or at least to on 26 January 2012: labour.nic.in/lc/42ilc/Re-
cordNoteofDiscussions.pdf
other unorganised workers.justify the title of the uwssa. 3 Summary Record of Discussions of the 43rd
In March 2010, a demonstration rally
A detailed analysis of the uwssa makes Session of Indian Labour Conference held on
23-24 November 2010 in New Delhi, viewed on
under the banner of Karnataka State it clear that the government is not at all 15 January 2011: http://labour.nic.in/lc/43ilc/
willing to guarantee any social security
Tailors Association (ksta) in Mangalore RecordNoteofDiscussionAmendedbyMOLE.pdf
4 Last viewed on 26 January 2012: http://www.
( The Hindu 2010a) wanted the uwssa to
benefits to the unorganised workers. rsby.gov. in/
include welfare funds for tailors, soft Then
loans why hurry up to bring out such an 5 "Minimum Wages (2006-07)", viewed on 12 Jan-
uary 2011: www.Indiastat.com
incomplete, unstructured, loose-ended
for housing, children's education, health-
legislation? The answer can be found
care benefits and old-age pension facilities.
REFERENCES
While making provisions for each specific
looking at the context in which the govern-
Business Sta
group of unorganised workers may be got the legislation passed. The bill
ment Security B
difficult, the ambit of the uwssa could
reached the floor during the last phase Business Sta
ary 2on:ht
have easily been broadened to include
of the United Progressive Alliance (upa) india/news/
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GOI (2008): "
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New Delhi.
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scheduled for April-May 2009. So just six
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to pressurise the government to extend
months before the election, the upa gov- the Methodology for Estimation of Poverty",
the benefits of the uwssa to each and ernment hastily declared the uwssa, un- viewed on 30 March 2011, Planning Commission,
Government of India: (http://www.planning-
every unorganised worker. The demon-
doubtedly, in a political move to lure the commission.gov.in/reports/genrep/rep_pov.pdf)
stration and strike were fairly sup-
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Unorganised Workers' Social Security Act",
ported by organised workers ( The Hindu
Experience tells us that schemes launched Economic & Political Weekly, 44(11): 17-18.
2010b, c). primarily to fulfil the requirement of votes Jose, A V (2006): "Is Legislation the Only Solution?",
Economic & Political Weekly, 41(32): 3480-83.
and populist agendas, without political
NCEUS (2006): "Report on Social Security for
Populist Move will, are difficult to sustain. Rao et al Unorganised Sorkers", Government of India,
New Delhi.
What can be expected from a legislation (2006) cite as an example the National
- (2007): "Conditions of Work and Promotion of
that leaves everything to the whim of the Social Security Scheme 2004, hastily Livelihood in the Unorganised Sector", Govern-
government? In the absence of any time- launched by the then central government ment of India, New Delhi.
- (2009) : "The Challenge of Employment in India:
line, compulsion or penalty, little progress as a pilot project in 50 chosen districts. An Informal Economy Perspective" (New Delhi:
has been made since the enactment of the Though the uwssa is a constitutional NCEUS, Government of India).
Neetha,N (2006): "Invisibility Continues?", Economic
law. Recently, a National Social Security legislation and not a governmental wel- & Political Weekly, 41(32): 3497-99.
Fund (nssf) has been made operational fare scheme, it needs serious amend- O'Keefe, Philip and Robert Palacios (2006): "Evalu-
ating NCEUS Social Security Proposals in Light
to fund the schemes. Budget 2010-11 de- ment to become more meaningful.
of International Experience", Economic & Polit-
clared an allocation of Rs 1,000 crore for ical Weekly, 41(32): 3483-87.
Rao, V M, D Rajasekhar and J Y Suchitra (2006):
financing the schemes, mainly targeting NOTES
"Putting the Cart before a Non-Existent Horse",
weavers, toddy tappers, rickshaw pullers 1 NCEUS (2009:181) recommends as minimum
Economic & Political Weekly, 41(32): 3488-91.
conditions of work: (1) working day of eight
Shankar, V (2009): "Unorganised Workers' Social
and bidi workers (Sen 2010). However,
hours including half-hour break, (2) Security
one paidAct 2008: A Beginning for Bigger
the fund amount is minuscule, consid- leave per week, (3) extension of Minimum Wages viewed on 19 November 2010:
Struggles!",
Act 1948 to all the employments, (4) piece-rate
http://www.cpiml.0rg/liberati0n/year_2009/
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wage to time rate wage, (5) equal remuneration
feb_09/commentary_3 .html.
workers (around 423 million). Accord- to women, (6) penalty for deferred payment
Sen, Amitiof(2010): "Social Security Schemes Set
wages, (7) imposition of fines in case of deduc-
to Get Off the Ground Faster", Economic Times,
ing to the Centre for Budget and Gov-
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November,
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articles.economictimes.indiatimes.com/2oio-
of Rs 22,841 crore (i e, 0.39% of gdp as use of safety equipment, (11) protection from
ii-03/news/28452274_i_labour-ministry-
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unorganised-workers-social-security.
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security coverage" (cited by Sen 2010). 2009/07/07/st0ries/2009070759i20400.htm.
tion benefit for the worker and his/her family to
Initiatives at the state level have been - (2010a):
the tune of Rs 15,000 per year, sickness "Tailors Seek Welfare Benefits", The
allow-
Hindu, 2 March, viewed on 27 January 2012:
ance for 15 days beyond 3 days of hospitalisa-
very slow. In the conference of the state http://www.hindu.c0m/2010/03/02/st0ries/
tion at Rs 50 per day, maternity benefit to the
labour ministers at New Delhi, on 22 Jan- 2010030259130300.htm.
extent of Rs 1,000 to the worker/spouse of
worker. (2) Life and disability cover -for
(2010b):
all the"Bandh Will Have Impact: AITUC",
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dis- 26 August, viewed on 27 January
Nadu, Karnataka, Jharkhand, Haryana, ability insurance to the tune of Rs 30,000
2012: http://www.thehindu.com/todays-paper/
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death or
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age of
ment formed its state social security board 60 years and provident fund for other htm.workers.

ЗО February 18, 2012 vol XLVii no 7 Ш Economic & Political WEEKLY

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Whatever de Soyza's political project
History in the Making may be, the rejoinder to Roberts came
from Charles Sarvan, trained as a liter-
ary critic. Sarvan retorted that the er-
NELOUFER DE MEL rors in the book are so many they are
laughable; that the work of memory can
be disjointed and need not necessarily
that declares at the outset be the work of duplicity; and that writ-
What what that can declares
what it is we not?itsayis
Why not?
at about the Why
does a outset book
doesRitu Making a Difference: Memoirs from the
Ritu ers may tell lies - fiction - in order to tell
Women's Movement in India editd by Ritu Menon
Menon, editor of Making a Difference:
(Delhi: Women Unlimited), 201 1; pp412, Rs 350.
larger truths. Certainly, many renowned
Memoirs from the Women's Movement in writers blur the distinction between the

India , open with a statement of disavow- imaginary and the real in order to
al: "Perhaps I should begin by saying undermine the very confidence with
has been raging in Sri Lanka about an
what this book is not"? Is this defensive autobiography entitled Tamil Tigresswhich we differentiate the two. I am re-
minded of Salman Rushdie's Saleem in
or defiant in tone? To me it is both, and written by an ех-ьттЕ female cadre
well placed and necessary. It is defiant under the nom de plume Niromi de Midnight's Children or the small "errors"
because the project of collecting memoirs Soyza (interestingly a Sinhala name).Michael Ondaatje makes in Running in
from the Indian women's movement to- Michael Roberts, a Sri Lankan born his-
the Family , or his latest novel-memoir
wards an autobiography of a "collective torian asked in a recent review of the The Cat's Table precisely I think to alert
subject" is a brave one. In a movement as book, whether Tamil Tigress was poised
us to a faltering memory, or a different
diverse as this, there will always be - to enter the "house of literary infamy"impact of an event on the character.
like elsewhere, and common to all socialjoining other such "tales of lies" mas-
movements - questions over the "collec- querading as autobiography.1 He notedFetish of Veracity
tivising", over the politics of inclusion that Niromi de Soyza But we live today, in an age which fetish-
and exclusion. I am struck, therefore, by considers her tale 'unique' because she wasises veracity. One register of this plays
how courageous a project this is - yet it a female fighter and a 'child soldier' at that, out as our passports and identity cards,
also follows a certain self-confidence, a albeit much like the many young Tamils whoetc, are checked at various borders by
were ready to sacrifice their life for a just
belief that the women's movement in the State; and our identity is whittled
cause. Completing the tale, she adds, was
India has come of age. Certainly, the 'cathartic' for her. Thus, we could say thatdown to the status of an object so that it
women activists, scholars and artists she presents herself as a driven force tellingcan be stabilised, and "known", and recog-
the world her truths.
showcased in this book have led the way nised through bureaucratic rationalisa-
in south Asian feminist politics and been Herein lies the rub: the work of memorytion. Therefore the disciplinary tussle
an inspiration to us all in the rest of - the basic ingredient for any memoirthat I have just referred to between the
south Asia; and this book poses a chal- or autobiography - is, for this historianliterary critic and a certain kind of histo-
(and I suspect for many general readers),rian (because there are other methodo-
lenge to us all: that it is time to collect
the memoirs from our own movements about retrieving and portraying the truth.logies within history which are more at
for their own specificities, debates andFrom this perspective Roberts goes on tohome with the work of memory and rep-
locations - all of which outweigh the parse Niromi de Soyza's book for bothresentation) is, I think, important to flag
limitations such projects entail. The de-large and small errors. A significant errorbecause it calls into question this very
fiance, then, is in the self-confidencenoted by him is the interpolation in therelationship between identity which is
that comes from the recognition that this book of the Sri Lanka army for the Indiancomplex and diverse, and identification
group of women, these groups of organi-Peace Keeping Force (ipkf) in a ruthlessthat reduces it into something easily
sations, and activities constitute whatbattle fought in December 1987. (Thisknowable. Within the framework of the
the editor of the volume terms, "historywas the author's inaugural battle.) Rob-book Making a Difference , this lens of
in the making". erts sees in this manoeuvre a deliberate identification would be to take the fal-
The defensiveness, however, is also attempt to blacken the Sri Lanka armytering memory, the play of imagination,
well placed because it is an insistence because he surmises that Niromi de or the variable impact of events on the
against misreading: against looking forSoyza would surely have known shewomen
was who describe them as distortions
of the truth.
an exhaustive account, or accounting offighting the ipkf and not the Sri Lanka
the Indian women's movement within army at the time. The consequence of It is because of such claims and

these pages. Menon is right to be on counterclaims to accuracy and truth


such an interpolation is, for Roberts,
her guard. For there is also a further which characterises how readers res-
a covert reinforcement of the current,
danger, of memoirs and autobiographycontroversial allegations against thepond
Sri to what is now increasingly being
being regarded as the truth. A debate
Lanka security forces of war crimes. called "life writing" that Ritu Menon, as

Economic & Political weekly Ш2Э February 18, 2012 vol xlvii no 7 31

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editor and curator of the voices in this constantly mobile. To a Sri Lankan,impact,
the however, because of their effect
volume, is wary from the outset: That, as onof
context these stories move in is one us as readers. Events I had read about
she says - yes - memoirs are subjective familiarity to the women concerned.such as Emergency under Indira Gandhi,
and susceptible to falsification, they are or the 1984 violence against the Sikhs
Each chapter spoke of friends, places,
constructed, shaped and mediated by after
streets, junctions, marches, slogans andher killing, or a particular women's
language; and so, that a memoir is studies conference at which I may have
songs that are not necessarily explained
already in the realm of affect - also be- been present appear in this volume as
to the outsider. They could be reminis-
cause of "where and at what stage we cences that take place in someone'skey events which changed these authors'
happen to be in our lives when we recall" lives and led them to new directions
drawing room. In these conversations
(p xxv). Given that the volume, as a of research and activism. Read this way,
with each other, there is some nostalgia
project, sets out very consciously to cap- (the phrase "things seemed simplerthe events themselves take on added
ture diverse strands, events, and en- meanings, not only as the governmen-
then" runs like a refrain throughout),
trances into the Indian women's move- but also humour, and a racy pace as or pogroms of a state - but also as
tality
deeply moving engagements of women
in Gabriele Dietrich's piece with which
ment, many of its narratives are about
how, as Stacy Holman Jones writesthe volume proper begins. This with
is athat state, with violence in their
of what she terms "autoethnography",good beginning not only because it
communities, and with their inner selves.
"selves [which] are constructed, dis- points to the inclusiveness of the Indian
Having the privilege to know, or have
met some of the authors in this volume
women's movement in acknowledging
closed, and implicated in the telling of
myself,
personal narratives". They are also aboutthe commitment made by a woman of the revelation of how these
"how these narratives move in and German descent to life and work in macro events changed their lives in very
India, but also because it is a more liter-
change the contexts of their telling" fundamental ways will change the con-
(Holman Jones 2005: 767). ary piece than the others and so, drawstext in which I will, after this, review the
The narratives in this volume are attention to the function of narrative larger events themselves. This is also
in memorising.
striking, therefore, for how they "move because the revelations are honest and
should be valued above all else for their
The stories that changed the context
in and change the contexts of their tell-
through
ing", which also points to how "truth" is their telling have a greater self-reflexivity.

Summer Workshop on Quantitative Methods in Political Science


Lokniti - Programme for Comparative Democracy , Centre for the Study of Developing Societies (CSDS), Delhi, in collaboration
with Jain University, Bengal uru, invites applications for the Summer Workshop on ' Analyzing Quantitative Data on indián
Politics' io be held in Bengaluru from Thursday, 10th May 2012 to Tuesday, 22nd May 2012.
This is the sixth Summer School being organized by Lokniti-CSDS. Some of the leading scholars working on empirical methods
in Political Science have been involved in designing this summer school. In this Summer School there will be a special emphasis
on making sense of quantitative data on Indian politics. We plan to bring together a group of political scientists with the aim of
providing them an opportunity to improve their skills in quantitative analysis. The selected participants will be given a set of
readings before they come to attend the workshop and will be expected to attend lectures and practical data analysis sessions.
Pradeep Chhibber (University of California at Berkeley) Irfan Nooruddin (Ohio State University) and Yogendra Yadav (CSDS) will
be the main resource persons for the workshop while other resource persons will include Siddharth Swaminathan (ISEC, Bengaluru),
Divya Vaid (CSDS), Sandeep Shastri (Jain University), Sanjay Kumar (CSDS) and Suhas Palshikar (University of Pune).
We invite the following categories of candidates to apply for this workshop (preference will be given to young researchers):
a. Teachers of Political Science in colleges and Universities who are working on empirical subjects and would benefit from
further training.
b. Research students of Political Science who are working on empirical themes for their M.Phil, or Ph.D. dissertations and
can benefit from further training.
c. Any other person (including those from outside Political Science and outside academia) who are interested in making sense of
politics by analyzing quantitative data.
Please send your detailed CV with a statement of research interest (those already registered for M.Phil, or Ph.D. should clearly
mention the topic of dissertation along with a brief summary of the objectives and methodologies used) in about 500 words.
Applicants should also visit our website http://www.lokniti.org/index.htm; access the questionnaire used for National Election
Study 2009 and write a 500 word Note on a research question that interests them; based on this questionnaire. Selection for
the workshop will be made on the basis of these two write-ups submitted by candidates. The last date for receiving the
application is Saturday 17th March 2012.
Please note that this is a full time residential training course and candidates admitted to the workshop are expected to stay
at the Institute and engage in full time work on all days during this period.
Apart from taking care of the accommodation and food for all the participants for the entire duration of the workshop, participants
will be reimbursed their travel expenses from their place of residence to Bengaluru and back (Train AC III or its equivalent).
Please send your applications by email to summerschool@csds.in or by snail mail to:
Director, Lokniti, Centre for the Study of Developing Societies
29 Rajpur Road, Delhi 110 054

32 February 18, 2012 vol XLVii no 7 ЕШЕЗ Economic & Political weekly

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Autoethnography play of/on photographs as integral toRoshmi
her Goswami's memoir. Given that
Stacy Holman Jones (p 765) notes, that work on women and violence. much of her early activism was in the
the field of "autoethnography" is about As for what we take out of this volume north-east of India, Goswami recollects
"setting a scene, telling a story, weaving in the context of our own belonging - or the founding moments of the North-East
intricate connections among life and art, sense of belonging - to our respective Network or nen, and marks the shift in its
experience and theory, evocation and movements, I want to mark two areas I work from women's needs to rights in the
explanation... and then letting go, hop- find significant. The first is that of self- context of armed conflict, and violence
ing for readers who will bring the same reflection. Over and over again I was against women by both the state and
careful attention to your words in the struck by the self-reflexivity incorporated armed militants. This has resonance for us
context of their own lives".2 This "letting in the act of writing these memoirs. Be- because women's groups in Sri Lanka such
go" is always difficult because, as I tried cause the memoirs come across as a re- as the Suriya Women's Development Cent-
to show with my example of the Tamil laxed conversation amongst friends er
- in Batticoloa, or Women and Media Col-
Tigress controversy, readers' responses even the controversies and debates with- lective in Colombo, or the Sri Lanka Wom-
are contingent and subject to alteration in the movement, of nomenclature, of en's NGO Forum engaged in similar work.
with historical change. So how a reader strategy, of focus, etc - are not hidden, It strikes me, therefore, that even if
pays attention, or not, to what you write but spoken about in the open. Feminism the issues of armed conflict, militancy,
and how you write is somewhat beyond itself as a bone of contention is referred prevention of terrorism laws, etc, are
our control. But there are readers out to. The limitations of the movement are present for Indian women as they are for
there who will pay attention to howspelt out. Its inequalities, and the bound- those of us in Sri Lanka, there is a slight
these memoirs are crafted, because of
aries to its achievements are clearly but nevertheless arresting difference in
how they resonate with our own livesmarked.3 The fights in Beijing at the 1995 India on focus and priority. Uma Chakra-
un women's conference are not shied
and movements. Personally I was struck varti noted this in an essay entitled "The
with how Kamla Bhasin's account begins
away from. Life writing often takes the Burdens of Nationalism" published in the
- as if her own history itself now beginsnarrative form of going inward, exploring festschrift I edited with Selvy Thirucha-
vulnerability in the inner self, in order ndran
- with the tragic loss in her personal life. to in honour of Sri Lankan feminist
I was struck by how in the majority move
of scholar Kumari Jayawardena (De Mel
the story out to the level of social
these accounts, mothers and grand- and Thiruchandran 2007: 4). Chakra-
and political relations. Many of the narra-
tives contained in this book follow this
mothers - either because we fought with varti wrote that in Sri Lanka, "women's
them or did not - are upheld as inspira-
form, of a descent into interiority in orderinterrogations of state power from a fem-
tional, paving the way to our entrances
to ask a larger question. The disclosuresinist perspective preceded many other
into feminist consciousness and the therefore come from deep introspectioncountries in the region". While she ac-
women's movement. and this is what I wish to take back the knowledged the many discussions, in fo-
As someone who teaches and has most in order to assess our own selves rums such as the epw, on the civil and
and our
worked in the theatre, I was also struck byrespective movements and their
democratic rights movements in Assam,
how integral a role the creative artsin-south Asia today.
places or women's groups which went up to
whether of creative song, street theatre, or Kashmir and issued reports of the status
photography - play in the movement Differences
as it vs Commonalities of women there, etc, she noted this did
is documented in the pages of Making a
The second aspect of Making a Difference
not lead to feminist interrogations of the
Difference. (This is the one place which
wherestruck
I nation
me as significant in the con-state in the context of armed con-
would disagree with the editor whotext
writes
of our own lives in Sri Lanka, isflict
that until much later. She provocatively
the differences
in her preface that every now and then the in focus of the Sri Lankan
and courageously put this down to what
women's movement and the Indian one
movement "replenished" or "recharged" she termed the "burdens" of nationalism
that infused the Indian women's move-
are greater than the commonalities we
itself and its campaigns through cultural
work, p xix.) Rather than treating used to often assume. Yes, both have suc-
creative ment at the time. For us in Sri Lanka, on
work as extraneous, the accounts cessfully
by Uma campaigned for laws against the other hand, preoccupied with the
Chakravarti, Sheba Chhachhi, Kamla
domestic violence (the Domestic Violence
war, women campaigned against the
Bhasin and many others show how songs, Act came into effect in Sri Lanka in 2005).
Prevention of Terrorism Act (рта), gen-
photographs and street theatre were Both have campaigned for various nation- der-based violence, a political solution to
turned to as important pedagogical tools al committees on women, and submitted
the armed conflict, and women's repre-
with which to communicate the move- sentation in peace negotiations and deci-
reports on the status of women. But given
ment's message. For example, Chakravartithe 30-year war in Sri Lanka, the preoc-sion-making committees, but lagged be-
cupation of many Sri Lankan women'shind the achievements of the Indian
writes of the street play От Swaha crafted
in order to address and communicate women's movement in the fields of envi-
groups has been violence against women
in the context of armed conflict. In Mak- ronmental and ecological conservation,
more directly the issue of dowry murders,
etc. Through her photo essay Chhachhi the rights of fishing communities, trade
ing a Difference this focus is most overtly
similarly acknowledges the interactive
present as a sustained narrative only in unions, and minority rights. Nor did we

Economic & Political weekly ццш February 18, 2012 vol xlvii no 7 33

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succeed, given that all our universities doing so they validate the women and Norma Kouri and Helen Demidenko?" The
Island , 3 September 2011.
are state ones, under-resourced, and fair- their movement, and what and how they
2 Stacy Holman Jones, Autoethnography: Making
ly well entrenched in the status quo, in say about the act of making history. the Personal Political, Sage Handbook of Auali-
tative Research.
establishing women's studies courses,
3 Eg Saheli's statement that although they felt
faculty and research that fed the move- Neloufer de Mel ( nelouferdemel@yahoo.co.uk ) united as women, over the last two decades
ment as it did in India. is with the department of English, University "women's experiences and oppressions have
of Colombo, Sri Lanka. become clearer than ever - linked as they are
These memoirs are, then, an index not just to religious identity, but as powerfully
of the times. They spark off charged to class and caste, sexual orientation and other
hierarchies that produce countless inequalities
moments of connection and difference. NOTES
amongst us", p 252.
They present self and culture, and selfi Roberts wrote, "The literary world is now
poised on the brink wondering if the Tamil Ti-
and politics as a delicate balancing act. REFERENCES
gress (Allen and Unwin 2011) is going to join
They draw on multiple forms - journalism, Forbidden Love (Random House 2003) De and
Mel,The
Neloufer and Selvy Thiruchandran (20
Hand That Signed the Paper (Allen and AtUnwin
the Cutting Edge: Essays in Honour ofKuma
photography, diarising, literary criti-
2000) in the house of literary infamy. Jayawardena
Has the (Delhi: Women Unlimited).
cism, social science and history - to cap- Tamil lady who uses the nom de plume Niromi
Holman Jones, Stacy (2005): "Autoethnograph
de Soyza woven an autobiographical tale of lies the Personal Political", The Sage Hand
Making
ture and convey the voices and memo-
book of Qualitative Research, Thousand Oa
that match those coined by Norma Toliopoulos
ries of a renowned group of women. By and Helen Darville who wrote their memoirs
(London,as Delhi, Singapore: Sage), pp 763-91.

Perspective on the Financial


ment of banks Crisis
of banks and replacement of manage-
was never explored, pre-
sumably as the author almost approv-
ingly quotes us Senator Barney Frank's
Y V REDDY
statement "You can't go out and shoot
the bankers" and "But you have no op-
From Financial Crisis to Global Recovery by tion but to live with these people", while
on the global financial crisis. The Padma Desai (New York, USA: Columbia University Press), recognising that "People are angry.
There value on thevaluehasofofanother
global book
another
on thebeensub-financial a plethora book on crisis. of the books sub- The 2011; pp XVI + 254, $27.50.
They're furious" (p 20).
ject is prima facie suspect, but Padma
Desai's book is an exception. in dealing with regulation, a bit of heavy Stress Tests
The book is unique in many respects. reading. After going through the book, The next chapter titled "Banking Sector
It provides a broader view than the oth- the reader will concede the claim made Stress Tests: United States versus Euro-
ers from several perspectives, and is not by the author in the Preface - "This book pean Union" provides a detailed account
confined to the exclusive concerns of is different" (p 9). of the stress tests conducted, but there
financial markets, economic theorists or Chapter 1 describes the origin of the are three highlights of the analysis that
policymakers. It gives a balanced view financial crisis, essentially in terms ofwarrant the attention of the reader.
on policy actions and the current dilem- interactions between monetary and reg- First, the contrast between the us and
mas confronted by the systemically ulatory policies of the us, partly facili- Europe in regard to the swiftness and
most important countries, especially tated by flows of savings from outside, quality of stress tests; second, the con-
the United States (us). It also makes use- mainly China. This is followed by a trast between the hands-on role in man-
ful comparisons where appropriate, in detailed account of efforts at avoiding agement in regard to Chrysler and Gen-
particular between the experience with Great Depression 2.0. The narration eral Motors compared to the banks; and,
the Great Depression and the current reads like a play where none was a third, the contrast between the ap-
financial crisis. The chapters of great villain but everyone misjudged reality, proach of the us and the United King-
interest for the global economy relate to and a catastrophe was avoided by swift dom (uk) on exercising the option of na-
the future of the dollar and of American and determined actions through a proc- tionalisation. The author holds that in
capitalism. Desai as professor of com- ess described by the author as "timely her view nationalising the troubled us
parative economic systems in Columbia but ironic show of generosity in favour banks would have been "a colossal mis-
University is well placed to share her of the bankers" (p 20). The cartoons pro- take" (p 26). An unexplored area in this
deep knowledge and accumulated wis- vide a welcome addition to the essential- regard is the teeth that the option of na-
dom on these two critical questions ly non-technical, but authentic account tionalisation would have given to stimu-
within the overall context of her over- of events in the us. The domestic politi-
lating and directing credit to the large
view of both the current crisis and ele- cal economy factors and the external domestic economy of the us. On the
ments of recovery. Above all, the narra- global financial architecture that may downside, nationalisation would have
tive is a mix of easy flow in a conversa- explain these events are available, to been the end of the position of the us
tional style and impressive detail on cur- some extent, in the succeeding chapters. as the ultimate upholder of the faith
rent policies which is, at times, especially Obviously, the option of nationalisation that governs capitalism and globalised

February 18, 2012 vol XLVii no 7 0353 Economic & Political weekly

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finance. In that sense, Desai may be through contagion, in particular to
reforms in the us captures the market
right in her observations. Referring to Europe, Asia, North and South America.view, the regulators' view and the polit-
the Federal Reserve's Troubled Asset- The narration is brief in relation to the ical economy view, and is hence very
discussion of the us, but the regions andvaluable. The assessment of the new
Banked Loan Facility to encourage some
countries covered are appropriate. The regulatory provisions by the author is
types of lending and the us Treasury's
sets of challenges for policy frameworks somewhat brief and tentative for justifi-
Public-Private Investment Program, the
and outcomes are well articulated and
author rightly concludes that "the gam- able reasons. The value of the chapter
bits were off the mark" (p 44). the author's considerable attention to lies in its excellent account of the com-
the issues in regard to the Euro stands
Chapter 3 asks the question which, peting considerations in regulatory
vindicated by subsequent events. Des-
perhaps, still remains somewhat unans- reform; complexities in the process of
wered: "Is the us Economy on the a rebalancing of the system from the
pite their resilience to the crisis, and
significant contribution to the global
Mend?". The chapter details the policy deficient present to one that is closer to
recovery, Asian economies receive less
dilemmas, policy initiatives, and policy the optimal, and the importance of
attention in the narrative than others.
outcomes in the threefold agenda that a synchronised approach to changing
the us put for itself. These relate toThe
as- country ranking and analyticalregulation of institutions, instruments
sessing and relieving stress in Wall framework and assessment of recoveryand incentives in markets as well as
prospects (Figure 4.5 in p 107 and Sec- regulatory structures to implement
Street banks, the fiscal stimulus and
tion ix in p 108) are very informative, public policy.
monetary easing. The account is factual
while comments on "financial globalisa- Assuming that the regulatory over-
and objective, characterised by a full
tion" are music to this reviewer.
appreciation of the complexities in con- haul will move forward, the author is
Chapter 5, "Hedge Funds and Deriva- optimistic of the future "if the regulatory
duct of policy. There is a welcome men-
tives, Credit Default Swaps and Rating provisions relating to capital require-
tion of a poll of expectations of outcomes
Agencies", sets for itself an ambitious ments by banks and transparent opera-
by economists, contrasted with the gen-
eral public, and, not unsurprisingly, agenda.
the It seeks to explain these to "an tions of derivatives are consistently and
economics student who is a Wall Street
current state of the us economy is closer vigilantly applied" (p 172). The "if" in
to what the general public expected
outsider" (p 110). It largely succeeds inthat statement is, indeed, a big "if".
that effort given the complex issues that "The us Dollar's Future as a Global
than what the economists had predicted.
Desai spends the largest segment of it seeks to address, such as problems Reserve Currency" is the theme of
the
discussion on the problems and pros-
posed by them for regulators, and theChapter 7. It is an excellent, comprehen-
pects of the real economy. Concedingneed to regulate them "selectively andsive and objective account of the origins
that the threefold set of measures re-prudently" (p 110). The explanation of and evolution of the recent debate on
flects "an encouraging record", the au-some recent developments in policies the us dollar as a reserve currency, con-
thor traces "the troubling features ofrelating to short-selling, high frequency sequent to the financial crisis in 2008.
the real economy that these policies trading, flash orders and dark pools, The analytical framework is provided
were calculated to overcome" (p 47). should be very informative to uninitiatedthrough a succinct recall of contribu-
The academic value of the chapter is economists. tions of Robert Triffin on the subject.
enhanced by the policy proposals that The exchange rate policy of China, in
were considered but not implemented, Reforms in Regulation particular during the years preceding
such as a fee on big banks and the The next chapter gives an exhaustivethe crisis, is placed within the overall
overview
healthcare plan, as also by the descrip- of the reforms in the regu-
macro-policy objectives of China, while
tion of political processes involved inlation of the financial sector in the us noting that active debate was triggered
the magnitude and composition of the and an account of regulatory proposals
by the statement by the governor of Chi-
fiscal stimulus. The concluding sectionin the European Union (eu). These arena's central bank in 2009. The chapter
which captures the author's assessment interesting comparisons, though limited details in a lucid manner the major con-
of the us ends by eliminating the pros-by the underlying diversity in challeng- tours of policy compulsions, voices and
pects of the recession but is cautionary stances of the us and China in regard to
es. For the eu, the priority is to address
on the prospects for the real economy. problems of excessive leverage in banks the reserve currency. The reader will
The author gets the whole picture rightand lack of arrangements for coordina-
benefit immensely by the well-informed
with the statement: "More than any
tion in regulation across the jurisdic-articulation of their respective positions.
tions in the Union. In the us, the priorityThe author discounts the possibility of
other consideration, the us employment
the renminbi becoming a reserve cur-
is to retain its supremacy as a major cen-
rate would continue to figure as a strate-
gic input in the policy decisions at thetre for globalised finance while restrain-
rency, though it is possible that it will be
highest level (p 79). ing the unhealthy aspects of financial"an important currency for bilateral trans-
Chapter 4 proceeds from an accountmarket innovations and the too large toactions" (p 186). At the same time, despite
fail banks, and enhancing consumer
of the us where the crisis originated, to the support for use of Special Drawing
the global economy to which it spread Right (sdr) in several countries, the
protection. The detailed treatment of the

Economic & Political weekly Щ5ЕЗ February 18, 2012 vol xlvii no 7 35

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author holds that "the sdr becoming an the efficiency and stability of gloablisa- market system, with special reference to
international reserve currency is neither tion of financial markets? the banking system. Similarly, Keynes'
likely nor desirable" (p 187). Recognising The first part of the chapter titled view of the links between macroeco-

the infirmities of the current monetary "The Great Depression and the Current nomic aspects and microeconomic deci-
system, the author concludes "The res- Financial Crisis" is a succinct summary sion-making, and his account of the role
ponsibility for maintaining the dollar's of the origins, symptoms, policies, insti- of markets and animal spirits are laid
status as a reserve currency must tutional build-up, etc, in regard to both. out clearly.
remain with the decision-makers in This narrative leads to the more interest- The author's intention may be to pro-
ing observations on the differences in vide the intellectual framework that
Washington rather than in Beijing"
(p 191). There are several issues onthe
this
origins of the crisis and impacts on should witness reforms of capitalism in
the real economy, as also similarities America. Reforms will require rebalanc-
subject that are worth exploring further.
What are the merits, demerits and feasi-
and contrasts in policy responses. The ing warranted by the crisis, between the
bility of having a single country's
chapter ends with a narration of the state and the market, real and financial
political
currency as a global currency, for the environment in the us now, sectors, including leverage, short and
global economy? What are the advan-
under the leadership of President Barack long-term, and macro- and micro-aspects.
Obama, compared to under Franklin The rest of the chapter is devoted to the
tages and limits to the exorbitant privi-
lege enjoyed by a single country reserve
Roosevelt. The author appears to believe features of and prospects for regulatory
that both the crisis and the solutions
currency and what are the concomitant reform of the financial sector in the us.
have been and have to be centred
services rendered by it such as those The success of the regulatory reform of
facilitating international payments? the us.
around which the author is optimistic is con-
How can either binding rules or market sidered critical for preserving American
Future
discipline be incorporated in such a single of US Capitalism? corporate arrangements, and conse-
The concluding chapter is titled "The quently the survival and success of
country reserve currency? Will network
externalities permit survival of several
Future of American Capitalism", and American capitalism.
reserve currencies without any of them
naturally the primary focus is on the us The book is a welcome and a valuable
dominating? and not much on the lessons that could addition to the existing literature and
The sdr may help diversification of be drawn from other advanced econo- should be of interest to academics,
risks emanating from the dominance of mies or the emerging and developingpolicymakers, market participants and
a single currency but does it eliminate interested laypersons. No wonder the
countries that demonstrated impressive
the inherent infirmities of a currency of growth and resilience during the crisis.book has received wholesome endorse-
a country operating as a global reserve Further, the chapter proceeds on thements from a wide spectrum of eminent
currency? Above all, how does the assumption that rebalancing the marketpersons including George A Akerlof,
existence of a non-system in the inter- Alan S Blinder and Nicholas Stern.
and regulation in the financial sector is
nationally monetary framework, through the key to the future of American capi-
the predominance of single currency, talism. The value of the narration lies in
YVReddy ( dryvr@gmailcom ) is former
namely, the dollar, have an impact on an incisive overview of Adam Smith's governor of the Reserve Bank of India.

Economic&PoliticalwEEKLY
REVIEW OF RURAL AFFAIRS
January 28, 2012

Agrarian Transition and Emerging Challenges in Asian Agriculture: - P К Viswanathan, Gopal В Thapa,
A Critical Assessment Jayant К Routray ■ Mokbul M Ahmad
Institutional and Policy Aspects of Punjab Agriculture: A Smallholder Pe
Khap Panchayats: A Socio-Historical Overview - Ajay Kumar
Rural Water Access: Governance and Contestation in a Semi-Arid
Watershed in Udaipur, Rajasthan -NC Narayanan , Lalitha Kamath
Panchayat Finances and the Need for Devolutions from the State Government - Anand Sahasranaman
Temporary and Seasonal Migration: Regional Pattern,
Characteristics and Associated Factors - Кипа! Keshri, R В Bhagat
For copies write to:
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36 FEBRUARY 18, 2012 vol XLVii no 7 Ш2ЕЭ Economic & Political weekly

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Redefining Development
operating under numerous constraints in
uncertain economic times, if there is suf-

and Quality of Life


ficient political will and popular support.

Background
New Economic Strategies in Ecuador Ecuador is a relatively small country, with
slightly more than 14 million people, more
than two-thirds of whom are urban

JAYATI GHOSH
residents. But it is also one of the most
varied and biodiverse regions of the
For those who believe that we are world, with physical terrain ranging from

not necessarily condemned to the of the global economy stumbles lush tropical coastline to the Andean
At of and last, the falls somefurther
and falls globalintofurther good economy news. into a As trajectory stumbles the rest
a trajectory plateau and mountains that contain
gloomy status quo and that
of stagnation or decline of incomes and several active volcanoes. The territory
societies can do things differently, employment mixed with financial vola- also includes the famous Galapagos
what is happening in Ecuador tility, one region provides some source Islands, now a protected area that still

provides inspiration and even of optimism. In the past decade, a number contains many of the animal species
of Latin American governments have identified by Charles Darwin, as well
guidance. Ecuador could be one
embarked upon alternative economic as several other ecologically rich and
of the most exciting places on and social strategies that benefit people varied nature reserves.

earth at present, in terms of new rather than capital. While the various Ecuador has been a poor country, suf-

thinking about and actively left-of-centre governments in the region fering for much of its independent history
vary greatly in terms of actual policies, features similar to other Latin American
working towards an alternative
they have broadly heterodox economic countries, such as political instability
development paradigm based on approaches, which effectively question punctuated by bouts of military rule,
new relationships between and reject the mainstream thinking that economic backwardness and very high
continues to dominate the rest of the disparities of income and assets. The ever-
economy, society and nature. This
world, from the United States (us) to
looming impact of the us on its domestic
article gives an account of
policies and politics made it a quint
Europe to Asia. But there is more. These
Ecuador which is particularly are regimes that, in different ways,essential "banana republic" - and in fact,
important because it shows how it happens to be the world's largest ex-
move beyond tired ideas of all kinds, not
much can be achieved if there is just those prevalent in the mainstream.porter of bananas. It experienced external
debt crises and subsequent structural ad-
Thus, they also transcend the traditional
sufficient political will and
socialist paradigm, with its emphasis on
justment, along with the rest of the region.
popular support, even by a small centralised government control over an Even as recently as 10 years ago, Ecua-
country operating under undifferentiated mass of workers, todor was seen as more or less a basket case,
numerous constraints in incorporate more explicit emphasis on
with large balance of payments deficits
and external dependence despite its oil
the rights and concerns of women, ethnic
uncertain economic times.
minorities, indigenous communities andreserves, high inflation and domestic
other marginalised groups, as well aspolitical and economic volatility. In the
decade until 2007, Ecuador was ruled by
recognition of ecological constraints and
the social necessity to respect nature. five successive governments, all pursu-
Within Latin America, one of the lessing relatively similar economic policies
mandated by the globally dominant
talked about countries may well provide
the most interesting economic model. mainstream neo-liberal economic model.
Ecuador could be one of the most excit-
This had created a fairly typical inter-
ing places on earth at present, in terms nally disarticulated economy, with a
of thinking about and actively workingsmall primary export sector (for oil and
towards an alternative developmenthacienda crops like bananas and coffee)
paradigm based on new relationships controlled by multinational companies
Jayati Ghosh (jayatijnu@gmail.com ) is with between economy, society and nature. or local elites, hardly any manufacturing,
the Centre for Economic Studies and Planning,The example of Ecuador is particularly and a largely backward domestic economy
School of Social Sciences, Jawaharlal Nehru important because it shows how much based on peasant production and low
University, New Delhi.
can be achieved even by a small country grade services.

Economic & Political weekly «aavi February 18, 2012 vol xlvii no 7 37

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In 2000, as a response to hyperinfla- The popular support explicitly expres-
• To foster participation and social moni-
tion and external payments problems, the sed through such referenda has giventoring, acknowledging diverse identities
then government dollarised the economy, the government the political abilityand
to promoting their equitable represen-
replacing the sucre with the dollar as le- take on major vested interests and
tation, at all stages of governance.
gal tender. This subdued inflation, by powerful lobbies. • To restore and conserve nature and

containing inflationary expectations and maintain a healthy and sustainable


Having brought in a new constitution
forcing real wages down. But it did noth- environment ensuring for persons and
in 2008 and convincingly won the next
ing to address the core economic prob- communities equitable, permanent and
elections held in 2009, the government
lems, and further constrained domestic is now the most stable in recent times. It
quality access to water, air and land, and
policy space by making domestic mone- will soon become the longest servingtointhe benefits of ground resources and
tary policies completely dependent on natural assets.
Ecuador's tumultuous history. The presi-
the level of the dollar reserves. The econ- • To guarantee national sovereignty,
dent's approval ratings in polls in the past
omy continued to lurch on in chaotic year have been around 70%, even after promote Latin American integration and
manner, buffeted by global winds and five years of rule, and he is widely boost
expected strategic insertion into the global
unable to achieve stable development. to win the next election due within a context, which contributes to peace and
a democratic, equitable world system.
A turning point came when the econo- year. This expresses popular support for
mist Rafael Correa Delgado was elected the significant reorientation of the gov-• To promote balanced, equitable land
as president in late 2006. He won the ernment's approach, which in turn derives use planning, integrating and coordinating
run-off election against Alvaro Noboa, from a new constitution remarkable for sociocultural, administrative, economic
the richest man in Ecuador and owner of its recognition of human rights and the and management activities and bolster-
the Noboa Group, a Fortune 500 company. rights of nature, and its acceptance of
ing the unity of the State.
Noboa was typical of what was known plurality and cultural diversity. • To protect and promote cultural diver-
as the "partidocracia", or oligarchic sity and to respect its spaces of repro-
New Constitution duction and exchange; to restore, pre-
political system characterised by what
even Michel Camdessus of the Inter- and 'Good Living' serve and enhance social memory and
The constitution that was approved
national Monetary Fund (imf) had called in
cultural heritage.
"an incestuous relationship between The constitution explicidy incorporates
October 2008 was the 20th in the country's
the inalienable human right to water, as
history, but it was marked by many signi-
bankers, political-financial pressure groups
ficant changes. Its preamble noteswell
and corrupt government officials" (quoted thatas to "healthy, sufficient and nutri-
in Bürbach 2008). tional food, preferably produced locally
the goal is to build a "new form of public
Correa had served briefly as the and in keeping with their various identi-
coexistence, in diversity and in harmony
tiesofand cultural traditions", which
with nature, to achieve the good way
minister of economy in an earlier govern-
ment, but was thrown out after two means that the goal of food sovereignty
living, the sumak kawsay" and "a society
becomes
that respects, in all its dimensions,
months for trying to overturn neo-liberal the an obligation of the Ecuadorian
policies. His election as president wasdignity of individuals and community state. It affirms the rights of citizens to
backed by indigenous and social move- groups". The good way of living (knownfree education (at all levels) as well as to
ments, several small political partiesinonSpanish as el buen vivir but more health services. It recognises that all citi-
the Left and a broad mass of Forajidos zens have the right to "safe and healthy
effectively translated from the original
Kichwa as "life to the fullest") is both
rebelling against the established system. a and adequate and decent housing,
habitat
This combination influenced subsequentphilosophical-ethical approach and a
regardless of their social and economic
material concept, rooted not just status".
policies. Despite the low-key changeover, in a The emphasis on free access has
broad humanitarian tradition, butimportant
this election effectively became an eco- also implications, requiring public
nomic and political game-changerinofthe specific outlook of Kichwa-speak- provision rather than private delivery
dramatic dimensions. Correa's position based on user charges.
ing people and other indigenous groups.
when he took over in January 2007 was Labour rights are explicitly dealt with
This focus on "the good way of living"
involves a development structure in
initially weak, with no real party struc- Articles 33 and 34:
with
ture and little backing in the elected the following objectives: Work is a right and a social duty, as well as an
economic right, source of personal fulfilment
• To improve the quality of life and life
assembly. He called for a popular referen-
and the basis for the economy. The State
dum on fresh elections to the assembly expectancy, and enhance the capacities
shall guarantee full respect for the dignity of
as well as the people's desire for a newand potential of the population. working persons, a decent life, fair pay and
constitution. The answer to both ques- • To build a fair, democratic, produc-
retribution, and performance of a healthy job
tions was a resounding "yes" vote. A mutually supportive and sustainable
tive, that is freely chosen and accepted. The right
to social security is a right of all persons and
hallmark of the economic and political
economic system based on the egalitarian
it cannot be waived, and it shall be the State
distribution of the benefits of development
changes that have occurred since then that must bear the prime duty and responsi-
is that most major policies have first
and the means of production, and on the bility for this right... which includes persons
who carry out unpaid work in households,
creation of decent, stable employment.
been put through the referendum process.

38 February 18, 2012 vol XLVii no 7 ЕП25Э Economic & Political weekly

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livelihood activities in the rural sector, all forms The National Plan Figure 1: Real Annual GDP Growth Rates (in %)
of self-employed and who are unemployed. 2009-13 (SENPLADES
There is also explicit recognition of the 2009) contains a com-
rights of the elderly, children and young prehensive and persua-
people, persons with disabilities. The sive critique of the im-
acceptance of the rights of indigenous pact of neo-liberal eco-
peoples, communities and nations cre- nomic policies on Ecua-
ates the notion of a "plurinational" state. dor's economy. The
A significant feature is the recognition plan eschews gross do-
of the rights of nature. Environmental con- mestic product (gdp) as Sou ree: Preliminary Overview of the Economies of Latin America and the Caribbean 20 1 1,

servation, the protection of ecosystems, the only explicit goal, ECLAC, Santiago, Chile.

biodiversity and the integrity of the and instead, emphasises Figure 2: Investment Rates (GFCF as % of GDP)

country's genetic assets, the prevention of universal satisfaction of


environmental damage, and the recovery basic needs. Macroeco-
of degraded natural spaces are declared nomically, the intention
matters of public interest. Articles 71 to is to move Ecuador away
73 focus on the specific rights of nature. from being a primary
Nature, or Pacha Mama, where life is repro- producer, in four phases.
duced and occurs, has the right to integral In the first phase, the
respect for its existence and for the mainte- emphasis is on redistri-
nance and regeneration of its life cycles,
bution, selective importSource: Preliminary Overview of the Economies of Latin America and the Caribbean 201 1,
structure, functions and evolutionary proc- ECLAC, Santiago, Chile.
substitution, diversifica-
esses. All persons, communities, peoples and
nations can call upon public authorities to and consumption and reduce Ecuador's
tion in the form of ecotourism and strategic
enforce the rights of nature... The State shall public investment. In the second phase,
import dependence.
give incentives to natural persons and legal the focus is on changing the energy ma- The macroeconomics of such a strategy
entities and to communities to protect nature
are far from simple, especially since
trix, reducing fossil fuel dependence and
and to promote respect for all the elements
comprising an ecosystem. Nature has the right
expanding clean energy and bioenergyEcuador still maintains a dollarised econo-
to be restored..., apart from the obligation of production and consumption, and con-my that does not allow using the ex-
the State and natural persons or legal entities solidation of domestic tourism and indus-
change rate as a policy instrument and
to compensate individuals and communities try. In the third phase, export diversifica-
severely constrains monetary policy. In
that depend on affected natural systems.
tion away from primary production, andother countries, these would be seen as
All this, in turn, puts significant obliga- insurmountable obstacles. In Ecuador's
in the fourth phase, the launch of more
tions upon the state. The Ecuadorian knowledge-intensive products, including
recent past, these have been sought to be
state is meant, inter alia, to guarantee bio-services. Overall, the objective of this
overcome through creative strategies
the rights of people, communities and with respect to external economic inte-
strategy is to generate wealth to satisfy
nature; to produce goods, to create and the basic needs of population, but on the
gration and domestic fiscal policies.
maintain infrastructure, and to provide basis of an intergenerational sustainable
public services; and to boost the develop- Renegotiating the Terms
process that simultaneously results in
ment of economic activities and promote democratising its benefits. of External Engagement:
and bolster science and technology, the As Figure i shows, even though theOil and Public Debt
arts, ancestral wisdom and the creative One major source of inspiration for
government's explicit focus has not been
initiative of communities, associations,
gdp growth, in fact, this strategy has much of the developing world must be
cooperatives and the private sector. been associated with reasonably highthe way in which Ecuador's government
rates of aggregate income growth, gen- has managed to change the terms of ex-
Plan and Macroeconomic
erally slightly higher than for the regionternal engagement with forces that are
Achievements
as a whole. Figure 2 suggests that one generally seen to be much more power-
important reason for this is because of
All this is very well, but of course, having ful. This has been particularly evident in
two areas: oil rents of transnational
higher investment rates, enabled by
a progressive constitution is not enough.
Constitutions can be good in them-
significantly higher public investment companies; and the external debt held
selves, but inadequately implemented
whichinhas also drawn forth more private
by the government.
investment in a crowding-in process. Ecuador is an oil exporter with oil ex-
letter or in spirit - the Indian Constitution
being a case in point. In Ecuador, however,
The purpose of such public investment is
ports accounting for around 60% of ex-
the development planning process
nothas
simply to provide much-needed infra-
ports and 30% of government revenues on
been explicitly aligned to constitutional
structure, especially transport links and
average in the past few years (Weisbrot
requirements, and there has already beento electricity, but also to contri-
access and Sandoval 2009). It is often supposed
some progress in the past four years.
bute to the diversification of production
that Ecuador's ability to bring about
Economic & Political weekly QEE3 February i8, 2012 vol xlvii no 7 39

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positive macroeconomic changes is essen- population as a whole, which is at the Ecuadorian fields. As a result, the gov-
tially the result of the fact that it has been heart of the improved performance. ernment was in a position to benefit
an oil exporting country in a period of The first important element of this much more substantially from any in-
high and rising global oil prices. But oil strategy was the renegotiation of oil crease in global oil prices. State revenues
exports alone do not guarantee much contracts with multinational companies. increased by $870 million in 2011 from
economic progress, as the obvious ex- Ecuador had benefited relatively little this source alone. (Incidentally, while
ample of Nigeria shows among many from its oil exports because of the high this led to substantially increased hydro-
others. The presence of natural resources shares of oil sales that went to foreigncarbon royalties for the state it also meant
can even generate opposite outcomes, oil companies. A new law in July 2010 lower tax revenues from this source.)
associated with the "resource curse", as dramatically reversed the terms of the External debt service was previously
high export prices generate "Dutch dis- contracts, increasing the Government of a major drain on the government's
ease" effects that discourage diversifica- Ecuador's share from 13% to 87% (on and country's resources. The Correa
tion of production, and the economic rents average) of the gross oil revenues. This government declared that it would not
from these resources are appropriated was met with anger and consternation continue to service and repay debt that
by a small minority of the population. in the international industry. Seven out had been contracted by unelected re-
Indeed, until recently, Ecuador displayed of the 16 foreign oil companies operat-gimes on unfair terms for the country.
both of these tendencies quite sharply. It ing in the country decided to pull out, This has involved a complicated process
is not the presence of oil resources per and their fields were taken over by the of auditing the external debt and rene-
se, but rather the recent ability of the state oil companies. But the others gotiating and/or repudiating illegitimate
government to transform the nature of stayed on, finding it profitable to operate external debt, as more than 90% of bonds
control over oil and use these rents for even on these new terms because of the were withdrawn from the market. The
improving material conditions for the relatively low costs of extraction in mostprocess led to a dramatic reduction in debt

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A few months ago EPWRF introduced an online database service christened as 'India Time Series', www.epwrfits.in. The projec
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in a manner convenient for research and analytical work. This is targeted to benefit particularly students, research scholars, professional
and the academic community, both in India and abroad.

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Social Sciences (TISS), Mumbai and the Economic and Political Weekly (EPW).
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Modules released so far Following modules will be added soon


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3) Domestic Product of States of India (SDP) 3) Finances of Government of India
4) Agricultural Statistics 4) Finances of State Governments
5) Price Indices 5) Industrial Production
6) Power Sector 6) External Trade
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4° FEBRUARY 18, 2012 vol XLVii no 7 ЕИЗЕЭ Economic & Political weekly

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= INSIGHT

combined with strict


service payments, saving an estimated Figure 3: Government Revenues and Expenditures (as % of GDP)

$7.5 billion for the public exchequer.measures to punish


tax evaders. Since
Public Finance April 2006, the sri has
What is remarkable is that the govern-
required companies to
submit a range of de-
ment has confronted not just powerful
tailed information on
external forces, but also dominant
monthly vat filings,
domestic lobbies that were deeply embed-
ded in the domestic political structure.
financial yields, credit-
The clearest example of this is incard movements and Source: Preliminary Overview of the Economies of Latin America and the Caribbean 2011,
fiscal
policies, particularly revenue mobilisa- tax withhold-
income ECLAC, Santiago, Chile.

ings. Despite complaints from business-


tion strategies that have involved directly These increased government revenues
es
taking on the large domestic bourgeoi- about the time and difficulty of filling were put to good use in infrastructure
oil forms, these have proved to be investment and social spending. Figure 3
sie. Despite the very large increaseininthese
revenues, the public exchequer hasveryactu-useful in curbing tax evasion. The shows that government expenditure
ally reduced its dependence on oil dur-used this information to monitor rose to more than 30% of gdp in the
sri has
ing the Correa regime. The share exports,
of oil imports, purchases, sales, void- recent period, once again contrasting with
ed receipts and withholdings in general.
revenues in total government revenues the regional average. Ecuador now has
has come down from 30.4% in theThis has allowed it to come up with
peri- the highest proportion of public invest-
much
od 2001-05 to only 26.1% in 2006-10 - inmore systematic (and higher) esti- ment to gdp (10%) in Latin America and
other words, non-oil revenues now mates
ac-of the revenues due to it. Once the Caribbean. The largest increases
these
count from nearly three quarters of gov-estimates have been made, compa-have been in social spending, which has
nies
ernment revenues. This is mainly be- have been forced to pay up their doubled since 2006, to 10% of gdp. This
taxes, and the estimated arrears. Com- has enabled real progress towards the
cause of a massive effort towards effi-
mercial outlets and private professional constitutional goals of free education at
cient tax collection, which has caused
more than doubling of tax revenues in of proven tax evaders in most all levels and access to free healthcare
offices
five years. Total tax collection rosemain
from cities have been shuttered until for all citizens. Investment in health has
their
$4.67 million in 2006 to $9.56 million in tax obligations are met. The proc- increased by 129%, and the education
ofstill only partially complete, and budget has also more than tripled, from
ess is
2011. As a result, from around 35%
government revenue collection, direct estimates that there is much
the sri $235 million over 2003-06 to $941 million
taxes - mainly corporation taxes -more
havepotential to increase tax revenuesin 2007-10. There has also been a major
increased to account for more than 40%. further tightening and furtherexpansion in public housing, conform-
through
Tax authorities in Ecuador note that in
compliance. The stick of more stringenting to the constitution's affirmation of
and
the case of corporation taxes, this dideffective enforcement has been the right of all citizens to dignified hous-
not involve any increase in rates. combined
Carlos with the carrot of lower rates ing with proper amenities. Direct invest-
Marx Carrasco, the head of the Internal ment in public housing for the poor has
- corporation tax rates are to be lowered
Revenue Service (sri), argues that 22% from the current 25%. Partly as been
to this a complemented by increased home
en-of the tax enforcement drive, gov-loans by a public housing bank.
result
success is due primarily to better
ernment
forcement, collection of tax arrears and revenues in Ecuador increased These substantial increases in public
reducing tax avoidance, which, insignificantly turn, expenditure were not accompanied by
as share of gdp, as indicated
in Figure
Table 1: Fiscal Balance and Public Debt (as % of GDP) 3, even while they were any increase in either fiscal deficit or
falling
in the region as a whole. public debt ratios, precisely because they
Fiscal balance LAC -0.5 -1.2 -3.4 -2.3
This process has been effective but is were largely funded by increased reve-
Fiscal balance Ecuador -0.1 -1.1 -5.1 -2 -1.5
still only partially complete, suggestingnues from oil and taxes. Table 1 shows
Public debt LAC
that there is even more scope for extract-that the government's fiscal balance has
Public debt Ecuador 277 22.9 18.2 23 20
ing such revenue in the near future.been extremely low (except in the crisis
Sou ree: Preliminary Overview of the Economies of Latin America

Remarkably, the government did thisyear 2009) and the public debt to gdp ratio
and the Caribbean (LAC) 2011, ECLAC, Santiago, Chile.

without
has only been possible because of break-any adverse effects on either theis much smaller than the Latin American
rate
ing the cosy political nexus that had investment (which kept increas-average and minuscule when compared
of ex-
ingadmin-
isted in the past between the tax to most countries in the world.
over the period and is now a healthy
26% of
istration and the large businesses gdp) or the aggregate growth
that
Other Measures
reaped most of the benefit of rate (expected to be as high as 8% in
domestic
economic growth in the past.2011).
The So srithe usual arguments againstThere are numerous other measures
such use
achieved this through systematic of- that it will affect "investorthat have already been taken, which
a drive
confidence",
information technology and more detailed amount to an impressive amount of ac-
and therefore, investment
- clearly have not been relevant.
reporting requirements for companies, tivity in five years, especially in policies

Economic & Political weekly Ш February 18, 2012 vol xlvii no 7 41

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that affect the conditions of workers. of surplus labour. The Figure 4: Minimum Wages, Employment and Unemployment Rates

The expansion of public employment same ituc report notes


has occurred not just because of moreapprovingly that "the
people hired to deliver public services,government makes sig-
but by eliminating contractors and out-nificant efforts to ad-
dress the problems of
sourcing of public employment, thereby
providing around half a million previ-disabled persons".
ously outsourced workers with more Figure 4 shows that
stable conditions and better wages. Thereal minimum wages
legal minimum wages have been increased
have increased through-
and - even more importantly - sought toOUt the past decade, Source: Economic Survey of Latin America and the Car

be rigorously enforced. A law in 2007and the rate of increase accelerated after reform of the justice system, which is
made it mandatory for all employers to2006. It is estimated that real minimum
another major source of social and
provide social security coverage for
wages have increased by more than one- political friction at present.
third between 2006 and 2011. Urban un-
their workers, with the penalty of two
years' imprisonment for infringement. employment rates do remain high, how- The Economy and Nature
Thereafter, social security coverage hasever, and the recent decline may have One exciting recent initiative is the
increased from 39% of all workers tomore to do with the decline in the em- Yasuni-iTT biosphere reserve, perhaps the
more than 55%. Women working in
ployment rate than with expanding em- world's first attempt to create a mecha-
domestic service have also been covered
ployment opportunities. What is to be nism of net avoided greenhouse emissions
by minimum wage laws and are increas- noted, however, is that the increase inby leaving oil underground. The initiative
ingly sought to be affiliated to the Socialminimum wages and their enforcementis designed to keep underground in per-
Security Institute, to enable them to and the attempts at formalisation of the petuity an estimated 850 million barrels
receive pensions and other benefits. Ofworkforce have not been associated with of oil under two lakh hectares of rainforest
course, there is still a long way to go insignificantly higher unemployment rates, inside the Yasuni National Park, which is
terms of providing workers adequate as is generally argued by opponents ofa protected biosphere reserve. The initia-
protection or even their labour rights: Thesuch policies. tive would keep over 400 million tonnes
International Trade Union Confederation There have been attempts to reduce of carbon dioxide from being released
(ituc) report of November 2011 notes dependence on oil exports and diversify to the atmosphere. In exchange for its
that "the law limits the rights to organise, trade partners. Exports to the us now commitment, the Government of Ecuador
collectively bargain and strike" and that account for only 35% of total exports, seeks $350 million a year from govern-
"in practice, women and persons of compared to 53% in 2006. The plethora ments as well as private donors over the
indigenous and Afro-Ecuadorian origin of bilateral investment agreements that next 10 years, which is approximately
face discrimination in employment". How- had been signed by earlier governments half of what it would have made if it
ever, the direction of change is impor- has been examined, and some of them had allowed oil drilling in the Yasuni.
tant, especially given the overall context have been rejected. Current efforts include This not only protects the extraordinary

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EE^EEE INSIGHT

biodiversity of the area, but also theand water concessions that it felt went
lives The expansion of trade and investment
against the spirit of the constitution, relations with other developing coun-
and habitats of its indigenous peoples.
they were briefly banned before more tries has been important in generating
The scheme proposes to use ecotourism
public pressure caused a revoking of the some more autonomy. The government
to make human activity compatible
with nature. ban. There have been objections to the is clear that greater regional integration
This is a daring, and therefore, difficult government's attempts at media man- is crucial for a small open economy such
initiative. One source of concern is the agement, in a context of the domination as that of Ecuador and is actively look-
lack of interest shown by governments of of privately-owned media that oppose ing at the several regional arrange-
rich countries, who have thus far shown most of the government's policies. ments that are being considered and
very little inclination to put their money One obvious question that arises is: negotiated in Latin America to see
where their mouth is in the climate talks, how did the government manage to get the ways in which they can be used to
by supporting this initiative. But without away with so much, taking on both advance the progressive agenda within
some of that solidarity, the government internal and external vested interests the country.
is likely to find it hard to resist pressures without facing more extreme and vicious For those who believe that we are not

for drilling in the region, and in fact, resistance from previously entrenchednecessarily condemned to the gloomy
there are already complaints about some groups? This is a complex question andstatus quo and that societies can do
recent licences that have been granted for the answers - and the process itself - things differently, what is happening in
oil extraction in an area just bordering continue to unfold. One factor behind the Ecuador provides inspiration and even
the Yasuni reserve (Ruiz Marrero 2010). relatively weak resistance relates to theguidance. Clearly, despite continuing
divisions within the opposition, which global turmoil and domestic pulls and
Politics of has many internal conflicts, and thus,pushes, much can be done after all. Tax
Economic Transformation far has not been able to unite against revenues can be increased, by enforcing
what is still a very popular government.proper tax collection and cracking down
All this may sound too good to be true,
andprivate media are controlled by threeon evasion. Big companies - both dome-
and certainly the process of economicThe
business
social transformation has only just begun. groups strongly opposed to the stic and multinational - can be disci-
René Ramírez (currently the minister
government, and regularly present Correa plined, without adversely affecting invest-
as a wannabe dictator or populist caudillo,ment or GDP growth. The increased pub-
for science, technology and higher edu-
but
cation, and until recently the minister it is interesting that lack of controllic revenues can be used for more public
over the media does not appear to haveprovision in necessary areas to ensure
for planning) describes the process under
way since early 2007 as a "citizen's revo- the government's support.
dented the social and economic rights of citi-
There have been attempts to destabi-zens. Labour rights and social security for
lution" - a kind of middle path between
lise the government, some of which are all citizens can be fought for and sought
those who seek to "manage capitalism"
likely to have involved external support.to be provided. All this is clearly possi-
and push it in a more equitable direc-
In October 2010, a police revolt escalated ble, even for a small country operating
tion, and those who aim for a complete
overhaul and transformation of the into a potentially major violence when the with several constraints in our globally
capi-
president was surrounded and attackedintegrated world. Clearly, the rest of the
talist system into something completely
different. The purpose is to use the by rebellious police forces, in what isworld has much to learn from this
state
generally perceived as an attempt at aongoing radical experiment.
as an instrument to transform patterns
Honduras-style coup. In April 2011 us
of accumulation, production and distri-
bution so as to meet the needs of citizens
ambassador Heather Hodges was declared REFERENCES

now and in the future. The process is non grata and expelled from the Bürbach,
persona R
naturally uneven and challenging,country but in reaction to internal leaks and Rebellion
Neoliberal
the scope of the ambition and thethe publication of WikiLeaks cables that
suc- http://glob
cesses already achieved are remarkable.indicated insidious attempts at political thepartido
International Trade Union Confederation (ITUC)
There are bound to be conflicts with déstabilisation. Since the government
(2011): Internationally Recognised Core Labour
those whose profits and power are threat- has taken on domestic elites and inter- Standards in Ecuador, Report for the WTO Gen-
eral Council Review of Trade Policies of Ecuador,
ened, as well as other hurdles along the national interests, efforts at déstabilisa-
Geneva, November.
way. The high expectations raised by thetion can be expected in future as well. Ruiz Marrero, Carmelo (2010): "Yasuni: The Battle's
constitution and the plan, among ordi- However, changing geopolitics has Not over Yet", Latin America Energy and Envi-
ronment Monitor, Issue 3, 6 September, http://
nary people and indigenous groups, willalso provided more policy space for the energyandenvironmentmonitor.blogspot.com/
be difficult to meet quickly. There are government. The 2010 coup was pre- SENPLADES (2009): National Plan for Good Living:
Building a Plurinational and Intercultural State,
pulls and pressures from all directions, vented not just by immediate popular Summarised version (Quito: National Planning
and the government has also been une- mobilisation, but also by the prompt re- Council (SENPLADES)), Government of Ecua-
ven in its response to several demands. sponse of neighbouring friendly govern- dor, Republic of Ecuador.
Weisbrot, Mark and Luis Sandoval (2009): Update
Thus, when some environmental groupsments in Brazil, Argentina, Venezuela, etc, on the Ecuadorian Economy , Centre for Economic
protested against the granting of miningwhich provided backing for the president. Policy Research, Washington DC.

Economic & Political weekly пгпя February 18, 2012 vol xlvii no 7 43

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у,ф Environment, Technology and Development:
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conceptual lines and identify the points where they converge and diverge.

В The writ ngs and Many conceptual have How How articles development. do be n have polit cal these acros they shaped lines have bThe
at les, concepts disciplarticles
ines, developed and ap eared by identifyhave
policy the influence Rohaappeared
n ideas over over perspectives init atives, the Edover
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each past have and Bpast
y four decades in the Economic and Political Weekly.
Pp X + 394 Rs 495 The introduction provides a brief chronological overview of the theoretical underpinnings that led to the
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• P P Nikhil Raj • M V Ramana • С H Hanumantha Rao • Amulya Kumar N Reddy • Sunali Rohra • Vandana Shiva • Nigel Singh
• Sudha Srivastava • Geetam Tiwari • G Vijay • Gregor Meerganz von Medeazza • Shiv Visvanathan • Arundhuti Roy Choudhury.

Readings on the Economy, Polity and Society


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Emergence of the Indian Constitution
Affirmative Action and Cultural Fault Lines

VIVEK PRAHLADAN

The Indi
and South America are dotted with "tinderbox demo-
nation m
The and cracies" landscape Southarethat
cracies" that America ofcomplemented
contradictorily are postcolonialbycontradictorily
the are dotted states with complemented in "tinderbox south Asia, by demo- Africa the
become t
relatively stable Indian state. "There is little doubt that demo-
seeks
cracy in India has taken root".1 Such has been the repetition of to
the electoral process and the evolution of state building and
negotiat
fornation making enterprise that the Indianthem state has survived
and has continued to navigate through fault lines that were
cultural
and are cultural, regional, ethnic, linguistic, etc. The Indian
documen
Constitution, it may be argued, has been at the heart of this
nation state building and has structured the relative stability
attempt
at the core wherein aspirations (of castes and communities)
constitu
emerging from within these fault lines merge successfully into
text tha
constitutional discourses of affirmative action. However, inter-
contest
pretations of the text and form of the Indian Constitution have
remained, in large part, disengaged from the idea of the text of
nation"
this Constitution. A history of the idea of the Constitution is
yet to be established as a part ofthe narratives of "discourse of
Indian constitutionalism and politics".2
First, narratives of modern Indian historiography appear to
be predicated on a "primary contradiction"3 between two his-
tories. On one hand, there are the histories of mass movements,
which may be histories of the left, national movement, peasant
or labour struggles, etc. The other side of this contradiction is
the unexplored historiographical vacuum, the history of the
Constitution. In the existing histories of national movements,
constitutional developments have been viewed as "breathing
spaces" from the point of view of upsurges of masses or periods
when the Indian National Congress (inc) was supposed to be
carrying on constructive work. The following statement sum-
marises the prevailing historiographical consensus on constitu-
tional politics as "simply filling the political vacuum between
two Gandhian struggles".4 However, one may argue that from
a historical perspective, the end product of all mass movements
was the formation and crystallisation of India's new Constitu-
tion and the way its emergence dealt with the issues of caste
and community. Periods of non-mass movements were equally
This paper
significant when discourses of caste and community and not
Conference
merely the inc were negotiating to create a constitutional con-
University
sensus. The emplotment within narratives of the histories of
Conference
Commonw
politics in India, firstly, employ the idea of constitutional his-
I am
tory being limited to a historygratef
of passive responses of the anti-
independen
colonial discourse to British constitutional reforms. Secondly,
Vivek
"constitutional agitation", the preferred term for constitutional Prah
Centre for
politics, was carried on "within the four walls of law"5 which

Economic & Political weekly ЕШШ February 18, 2012 vol xlvii no 7 45

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SPECIAL ARTICLE ^eee =

acted as breaks
with "after". The former was in the
articulated by the discourses of h
movement caste and community
and interests and the
the latter by the nationalist
tr
India's discourse of the inc. The colonial discourse of representation
evolution as a
re-emerged only
narratives, as the postcolonial debate of affirmative
with action
it
was notand wasonly
followed by the Gandhian and Nehruvian discourse
consti
wherein swaraj orbut
movements puma (total) swaraj came first and every-
"com
discourse of Indian nationalism. thing else after. For instance, Ambedkar stated that "without
The history of the constitutional discourse is a history the
of removal of the taint of untouchability Swaraj is a meaning-
negotiations over a shared constitution. This framework less
of term".12 M A Jinnah, on his participation in the proceed-
negotiations remains hidden behind the dominant tendency ings
of of the second round table conference (rtc), stated that
modern Indian historiography to focus on Hindu-Muslim riots
"we have come here, notwithstanding the opposition of those
and mobilisations and "communal" propaganda. Revisiting the
who stand for complete independence".13 On the other hand,
foundational assumption in modern Indian historiographyGandhi,
of at the same rtc stated that "the agreed solution of the
the dialectic of secularism and communalism is one of the core communal tangle can only be a crown of the Swaraj Constitu-
implications of the framework of this thesis.6 Therefore, the tion, not its foundation".14 Swaraj, through mass movements,
notions of caste, community and culture are not merely ideo- was a consistent and pre-eminent ideological commitment of
logical superstructures but actual existential facts of living social the nationalist discourse.
conditions of south Asian societies. The "communalism" of the The paper identifies four phases in this history of the consti-
Muslim League and Congress Hindus, the Central Sikh League tutional discourse. Each phase represents a turn in the history
and the Hindu Mahasabha were discourses that were generatedof negotiations. (1) the phase of "comprehensive negotiations"
by the cultural fault lines between communities. This is the his-
-1916-32; (11) the phase where constitutional discourse was first
tory of negotiations between bodies that were articulating dis-challenged and then replaced by the discourse of cultural con-
courses of identity, power, representation, affirmative action,
frontation - 1935-46; (hi) the Constituent Assembly and drafting
reservation of seats, etc, and were seeking to embed the matrix
of the Constitution - 1946-50; and (iv) the postcolonial debate
of castes and communities within a single and a shared constitu-
over affirmative action. It will emphasise the contours of the
tional regime. The template of constitutional discourse invitesfirst phase and briefly run through the other three.
reflection on the articulations of caste and community dis-
courses by allowing these to be enmeshed into a single narrative'Comprehensive Negotiations': 1916-32
trope which frames the emergence of a "shared" constitution as
In 1916, the Congress and Muslim League entered into an
was being negotiated upon by Jinnah, the Muslim League,agreement for the first and last time over the issue of separate
electorates. The Lucknow Pact was based on the constitutional
Ambedkar, Sikhs, and the Hindu Mahasabha.7 In these negotia-
tions over constitution making, the inc was only one of theartefact of reservation of seats (for Muslims in the central legis-
voices that were contesting within this colonial constitutionallature). It is important as an event of agreement inasmuch as it
framework. The contemporary contest over the meaning of the gives us an angle to explain the constitutional history of mod-
ern India. In 1916, the inc was still committed to the idea of
Constitution and "the uneasy relationship between Constitution
and democratic politics"8 in postcolonial discourses of power
"constitutional agitation". The term "constitutional agitation"
must be located within this history of negotiations over must
a be differentiated from that of the ideological paradigm of
"shared" Indian Constitution. Further, almost intuitively, post-
"nation through constitution" that posed itself as an alternative
colonial discourses of secularism anchor themselves to the to the Congress' "constitution through nation". Congress was
notion of a "secular" constitution which is considered to be yet
"a to come out of its foundational notion of "nascent national-
charter of Indian unity".9 The historiographical trope of the ism"
con- based on petitioning.15 The term "constitutional agitation"
tradiction between communalism and secularism/nationalism is a reasonable term to understand the pre-swaraj inc. It is in-
carries over to the postcolonial contest over the idea of the tent
con- and content was defined in terms of linear constitutional-
stitution where "communalism remains a major threat to India's
ism imagined within the construct of petition documents.
Constitution based on secular and democratic principles".10 Thus, a pact was inked with the Muslim League as their fellow
The Constitution was drafted in December 1949 againstconstitutionalists.
the However, this political ecology of linear con-
backdrop of the Partition. The latter was seen as the outcome
stitutionalism lost the initiative to the idea of Gandhian swaraj.
of all that went wrong in Indian politics, i e, "communalism"
It was with the advent of swaraj that one sees the fault line be-
which was "without any agitation or struggle".11 On the other
tween the Congress' vision of "constitution through nation",
hand, Indian Independence and the Constitution were seen as nationalism was a non-negotiable "intent", with the vision
that
the logical outcome of all that was right about Indian politics,
of cultural politics of the Muslim League, Akalis (and later
i e, the idea of swaraj, the Gandhi-led national movement and
Ambedkar) articulating the intent of "nation through constitu-
its eminent "secular" values. tion", and their explicit "content" of "culturalism".
This paper views the constitutional discourse as a contestBeginning with the Lucknow Pact of 1916 between the Con-
between two visions, "nation through constitution" and "consti-
gress and the Muslim League and concluding with the unity
tution through nation" with the word "through" interchangeable
conference at Allahabad in 1932, the nature of negotiations,

46 February 18, 2012 vol XLVii no 7 цщ| Economic & Political WEEKLY

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ipso facto, define and distinguish this phase. All the negot- longer motivational. The momentum of mass movements was
iations in this phase involved large delegations (more than 100 lost as Gandhi renounced non-cooperation following the Chauri
in many cases) and were carried out on a "national" platform Chaura episode and was subsequently jailed till 1924. By this
surrounded by massive public interest and media involvement. time, as Anil Seal writes, "the Swaraj party was in the front seat,
The various delegations, formal and informal, counted in its and Gandhi was back-pedalling, from gaol".22 By 1925, Birken-
ranks the most important leaders of modern Indian history. head threw the constitutional option back into Indian politics by
Second, these "comprehensive negotiations" concluded with "challenging Indians to produce a constitution".23
drafts, whether of agreements or disagreements. The draft of First, this saw the return of the Swarajists, as С R Das and
the 1932 unity conference was the last such involving constitu- Motilal Nehru began re-engaging with the re-emerged consti-
tional negotiations between caste and community representa- tutional space. However, the nature of this space had changed
tives. Third, the principle of reservation of seats was at the and ceased to be what is known as "constitutional agitation"
core of the contest over a shared constitution. Fourth, there and saw active negotiations between community and caste
were only two successful negotiations, one involved commu- discourses to evolve an "Indian" constitution. Second, by this
nity and the other caste. The Lucknow Pact was the only suc- time, the Muslim League, which had earlier been overshadowed
cessful agreement on the question of community and even this by the Khilafat agitation, retrieved its status as a Muslim coun-
fell apart. It conceded the idea of reservation of seats for a terpart of the Congress. In Punjab, Fazl-i-Hussain revived the
community. The Poona Pact of 1932, involving Gandhi and Punjab Provincial Muslim League to work with the Muddiman
Ambedkar, was the only other successful agreement and the Committee on constitutional reforms.24 In its 1924 session, the
basic principles of this agreement that of reservation of seats All India Muslim League, with Jinnah in attendance, resolved
for castes, found its way into the constitution of independent that in any constitutional dialogue, the form of government
India. This phase also saw the emergence of electoral politics would be a federation with provincial autonomy and constitu-
and the idea of cultivating electorates to secure seats in coun- tionally guarded Muslim majority in Punjab, Bengal and the
cils and assemblies. Thus, this period saw the emergence of North-Western Frontier Province. Also, by 1925 Maulana
regional parties, caste organisations, and religious/cultural Muhammad Ali had fallen out with Congress and publicly held
bodies besides the advent of the Gandhian mass movement. "a fallen Muslim to be better than Mr Gandhi".25 By 1931,
Maulana Shaukat Ali too was seen opposing Gandhi at the
Emergence of Mass Politics second яте. Third, parallel to this was the rise of the Hindu
Mahasabha as "the wave of riots which spread in the early
The Lucknow Pact conceded the principle of reservation of seats
in the central legislature with separate electorates for the Mus-
1920s resulted in the relaunching of the Hindu Mahasabha".26
lim community. "Tilak was an enthusiastic backer"16 of this
However, the window for dialogue between the communities
agreement and negotiated with the Muslim League. Through remained open. Paradoxically, it seems, the riots made a
dialogue necessary between representatives of the communi-
reservation of seats over and above their proportion it "brought
benefits to the Muslims in minority provinces".17 It was alsoties
a as no one community was able to dominate in "street
way to bridge over the Surat split of 1907 which had virtually
strength" and both had the ability to retaliate. Pandit Malaviya
crippled the Congress and "for the first time since the Surat
insisted on the need "to approach Muslim leaders to devise
split, the moderates, under Chimanlal Setalvad, and the extrem-
means to settle disputes. In case riots occur we should settle
ists, led by Tilak, came together".18 Why did the same Muslimmatters in consultation with leaders of both communities."27
League with similar demands in 1928 come to be termed "com-
Malaviya, along with Jinnah, had opposed Gandhi's non-
munal" in modern Indian historiography? The Montagu- cooperation resolution in 1920. Lala Lajpat Rai, speaking at a
Chelmsford reforms confirmed the suspicion of nationalists (ex-rally in 1925 stated that "it is wrong to represent that Hindus
tremists) that "constitutional agitation" had failed. After the
are altogether opposed to any revision or reconsideration of
the Lucknow Pact".28
first war years, in the words of С Vijayaraghavachariar, there
"entered a historic figure on the scene of Indian politics".19 TheThe process for the next instalment of constitutional reforms
momentum generated by Gandhi proved irresistible. This led was
to on the cards and this led, first, to the "Delhi Muslim propos-
"the open cleavage between open politics and underground als" where reservation of seats in joint electorates could be
politics".20 With the advent of Gandhi and mass movements, explored as the basis for a compromise over separate electorates.
national politics came to be inhabited by those who wereThe Muslim League decided to "frame a constitution for India
gripped by nationalism. Liberals left the Congress and so did on lines acceptable to all communities and all parties".29 The
Jinnah. A realist and a constitutionalist, Jinnah was critical INC
of accepted this principle of reservation of seats for Muslims in
the emotional energies released by the Khilafat agitation and
the central and provincial assemblies at its 42nd session in
non-cooperation and could never be reconciled with the Con- Madras. The Mahasabha also accepted the Delhi proposals. This
gress through their pressure of mass politics.21 momentum culminated with the All Parties National Conven-
tion (henceforward the convention) in 1928 and its outcome,
Re-emergence of the Constitutional Space the Nehru Report. As a response to the Simon Commission, the
By the mid-i92os, the Punjab and Khilafat wrongs, which were
convention was called to explore a consensus through negotia-
the immediate inspirations for mass mobilisations, were no
tions on the constitution. The negotiations could not lead to an

Economic & Political weekly Е332Э February 18, 2012 vol xlvii no 7 47

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agreement and the Nehru Report of 1928 was a document of with the principle of reservation of seats (both for majorities and
disagreements. The idea of reservation of seats emerged as the minorities) which held the promise of a compromise on sepa-
core of the constitutional dispute. Why was it that on the issue rate electorates. Thus, community discourses were seeking
of reservation of seats for Muslims in the central legislature, "constitutional equilibrium" through reservation of seats. At
Punjab and Bengal, the convention, in its own words, "could not the beginning of the convention, Motilal, optimistically wrote
arrive at any agreement"?30 This can only be answered by re- to "dear Jinnah" that in regard to Punjab and Bengal "there are
interpreting the convention as a dialogue between communi- already signs of a desire on the part of each community to re-
ties. The key to the negotiations lay in the interventions of a verse its position in regard to reservation".39 Later in 1928,
body called the Central Sikh League based in Lyallpur. The Shaukat Ali wrote to Gandhi that "in your presence Motilalji
articulations of this body may be understood in the context of and myself differed so strongly over the reservation of Muslim
the Singh Sabha movement and the evolution of the notion of seats question".40 Under no circumstance were Sikhs and Mus-
the Sikh panth. The Akalis were the first regional party in the lims willing to accept the implications of the simple arithmetic
subcontinent. Jalal writes that "Punjabis of all religious denomi- of adult franchise in the central legislature or that of popula-
nations had conflicting opinions on the Nehru Report".31 1 would tion proportion in minority provinces. Motilal Nehru also
like to assert that the Sikhs under the Central Sikh League pre- wrote to Jinnah of his suspicions of "even some leading Hindus
sented a formidable unity, though not unanimity. This was of Bengal who are now pleading for reservation of seats to save
unlike the Muslim League which was divided in Punjab over the themselves from the Muslim avalanche at polls".41 By the end
Simon Commission and in Bengal where Fazlul Haq persisted of 1928, the Nehru Report lapsed and the dialogue between
with pushing for separate electorates. communities came to an end with Jinnah's 14-point agenda.
Gandhi's own assessment was that he "had no faith in the leg-
The Communal Question islative solution of the communal question".42 An outcome of
the convention was that reservations became the necessary
The first impact of the community discourse of the Sikhs at the
national level was felt during the convention. Here, the Sikh
condition for an agreement on the "content" required to
League put forth its demand for 30% reservation of seats with
achieve any sort of critical mass for an agreement based on the
"intent" of "nationalism". This leads to the assertion that the
the right to contest additional seats even though their propor-
tion in Punjab according to the Census of 1921 was 11%. This
contest between the two visions of "constitution through na-
demand was based on its understanding that in Punjab "thetion" and "nation through constitution" was also one between
existence of more than one minority favours the reductionthe
of centrality of the assertion of a "content" based nation state
as was asserted by community (and later of caste) discourses
majority in numbers into a minority in representation".32 Motilal
did not anticipate the Sikh insistence on reservation of seatsand
as of "intent" driven nationalism of the inc.
their minimum irreducible condition to any agreement. HeFor his part, Gandhi was waiting for a civil disobedience
wrote to Jinnah, "The strangest development that has takencampaign and with Bardoli he got that chance once again after
place is that of all communities in India, the Sikhs are now
1922. As Judith Brown states "Bardoli lifted Gandhi out of the
thinking of having reservation for themselves in Punjab".33
depression".43 On the back of the failure of the first rtc Nehru
Thus, in an attempt to close the window on the "Hindu-Muslim"
embarked upon the no-rent campaign. However, viceroy Irvin
constitutional dispute over reservation of seats, yet another
succeeded in bringing Gandhi to the negotiating table for pro-
door was opened, that of reservation of seats for Sikhs who
visional cooperation by securing Gandhi's participation at the
saw the Lucknow Pact as a mistake. Baba Kharak Singh
second rtc at London. Here Gandhi rejected any special safe-
"exhorted the Sikhs to throw the Nehru Report in the dustbin
guards for any community especially the "Depressed Classes"
(as it was) another Lucknow Pact in which the interests of and
the put forth a strong claim of the Congress being the sole
representative of the interests of all Indians. Gandhi found
Sikhs had been sacrificed".34 The antagonism of the Sikh body
towards the Congress sharpened in the aftermath of the himself
Ne- opposed by all minority representatives including
hru Report and its secretary wrote to Motilal that "you andAmbedkar. Within this phase of "comprehensive negotiations",
your party have adopted the bureaucratic tactics of divide and
the second rtc marks a shift for three reasons. First, it inaugu-
rule".35 With the infusion of Sikh discourses of representation
rated the entry of caste discourse into the constitutional dia-
and reservation of seats the Hindu-Muslim question in Punjab
logue at the national level that had until now been restricted
"defied all attempts at a satisfactory adjustment".36 The con-
only to communities and issues of caste ceased to remain the
vention found it difficult even to establish the meaning of preserve
the of social reform. Second, it brought to a head the con-
word "minority" because in the negotiations, according to Mo-
test between two visions that had begun with the Lucknow
tilal, "the word minority had sole reference to Muslim
Pact of 1916, that between the constitutional discourses of
communities and castes affirming the notion of "nation
minorities".37 The convention then replaced the word minority
with "small minorities" with the intention that "the word through constitution" and the nationalist vision of "constitu-
would be confined to Muslim minorities".38 tion through nation or Swaraj". Third, the process of Gandhi
The Sikhs, however, remained unmoved by any of these having to reckon with the inescapable implications of the
attempts that would result in watering down their demandconstitutional
for discourse had begun. By the time of the com-
reservations. Eventually, the Nehru Report did away altogether
munal award Gandhi had proceeded to actively engage in this

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constitutional dialogue leading Ambedkar,
to theR Srinivasan,
PoonaSolanki,
PactС Rajagopalachari,
with Ambedkar Rajendra
in September 1932. Prasad, Pandit Malaviya, M R Jayakar, В S Moonje, T В Sapru,
H N Kunzru,
В S Moonje, the Hindu Mahasabha M С Rajah,was
leader Chimanlal Setalvad, G D Birla,
present at thisAV
Thakkar, M S Aney, Purshottamdas
rtc along with Gandhi. The Mahasabha was, among Thakurdas, Walchand
other
Hirachand
things, also actively involved in the andconstitutional
others. At Yerwda jail along with Gandhi there
discourse in
were Devadas Gandhi,for
terms of the constitutional implications SarojiniHindus.
Naidu, Vallabhbhai Patel, Ma- the
During
second rtc, the Mahasabha was hadev Desai, N С Kelkar
holding and Pyarelal. On thein
meetings firstDelhi
day of the "to
consider communal and constitutional
conference at Bombay, Ambedkar stated that "although role
issues".44 Here the I re-
of consensus making played gard
by the Malaviya
question of separate electorates
cannot as closed
be by the Com-
under-
munal Award
stated. He represented the crucial yet I ambetween
link prepared to negotiate
the with Mr Gandhi asline
hard
he was the chief
Mahasabhaites who spoke in terms ofopponent in London".55
military Ambedkar further
regeneration,
the moderate Mahasabhaites added
and thatthe
"I will not discuss the questionHindus
Congress with anybody elselike
other than Mahatma
himself and С Vijayaraghavachariar and Gandhi. The Gandhi".56 In turn, Gandhi, in anMaha-
inter-
sabha was sensitive to the idea
view that, for the
to the press conceded now,
principle constitutional
of reservation of seats
discourse came before that of swaraj.
stating During
that although he held "strongthe second
views about reservation rtc,
Moonje in a letter wrote thatof seats",
"we nevertheless
Hindus he wouldare
"abide by any agreement on
idealists and
fools. We are so impatient forthe basis of joint electorates".57
Swaraj that we Further,
doinnot
a privatebother
letter, Gan- to
dhi wrote toFaced
comprehend its responsibility".45 P N Rajbhoj of his desire opposition
with to meet Ambedkar, a tacitover
acceptance of Ambedkar's
the constitutional negotiations, Gandhi concluded representative credentials
that which he
"the
had questioned earlier in London.
sinful wrangles" would continue to evade any resolution so
This was a quantum
long as there remained uncertainties leap from the to
in regard encounter
"the of confronta-
funda-
tion between
mentals of the constitution".46 T В theSapru,
two at the second rtc where, in the words of
sympathetically
С Rajagopalachari,
noted, on this occasion, that he "witnessed "Mahatmaji the
received funeral
many wounds in of
Lon- so-
don.the
called Indian nationalism".47 By But Dr time
Ambedkar'sofdartshis
were the worst".58 Ambedkar
return to India
wassecond
and after the conclusion of the dictating the rtc,
terms of Gandhi,
these negotiations.
if Theone
secretary of
goes
by the word of M S Aney who state
was noted that Ambedkar
acting "has put forwardof
president someCongress
very sweep-
in 1933, "no longer believed ing
in communal
demands settlement
as an alternative to separate electorates".59 and
Sapru
prepared a scheme
wanted the Congress to work purely on based on primary and
national secondary
basis in elections
con-
wherein
sidering any new constitution of the primaries would be through a panel system (a soft
India".48
On his return, Gandhi and allform of separate electorates)
leading Congress and the secondary
leaders and final
were elec-
imprisoned and "many of thetions
rankthroughand
joint electorates
file with reservation of seats.
followed, byIn Mayhis
meeting
there were 36,000 prisoners".49 The withBritish
Ambedkar Gandhi stated that "primary election
government initi-
ated a series of "shock and awe" ordinances to overwhelm the
would not offend against my vow".6° The negotiators had to
Congress organisation and the civil disobedience movement.concede even reservation of seats at the central legislature
The idea that "the Gandhian campaign had come to an end"50even though it did not form part of the communal award. The
was gaining currency by early 1932. The setback for the Congress Hindus and representatives of the Mahasabha and
Congressmen in general were under tremendous pressure to
"nationalist" discourse of swaraj was further compounded by
Ramsay MacDonald's communal award that projected a frac- come to an agreement.61 Ambedkar was exerting his own pres-
tured vision of the Indian nation state by assuring separate
sure on them by approaching them with the principle of maxi-
electorates for both communities and castes. Gandhi com- mum extraction insisting that "nothing be left unresolved" and
mented that this award "seeks to create such divisions in the that he was "keen on deciding matters once and for all".62
Chimanlal Setalvad remarked after the conclusion of the pact
country that it can never stand up on its own legs".51 Gandhi
had stated at the second rtc that "the claims advanced on that "If Gandhiji had to be saved, everything that Dr Ambedkar
behalf of the untouchables are the unkindest cut of all. I will asked for had to be conceded. Dr Ambedkar was the central
resist it with my life."52 He went on a fast unto death that was,
figure in the conversations with Gandhi."63
in his own words, "aimed at statutory separate electorates in These various agreements were bundled into what is known
any shape or form for the Depressed Classes".53 as the Poona Pact. The implications of this historic agreement
were that first, Ambedkar became established as a prominent
Ambedkar: The Central Figure Depressed Class leader on a national platform. Second, reser-
vation of seats for castes became statutorily entrenched
A conference was convened at Bombay under the presidentship
of Pandit Malaviya to come up with an agreement that could
through a consensus based on negotiations between represent-
convince Gandhi to withdraw his fast. The week from 19th to
atives of castes and this eventually made its way into independ-
ent India's Constitution. Third, the successful completion of the
25th September 1932 was an epic one in Indian history that saw
Gandhi-Ambedkar dialogue of 1932 raised hopes that a wider
leading personalities of modern Indian history involved in
settlement may now be possible. On the day of the announce-
negotiations. "It was a situation that taxed the nation's nerves."54
Some of the leaders who took part in these negotiations werement of Gandhi's fast, Sapru wrote to G D Birla on the need for

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a pact with the Depressed Classes, stating that "this Pact may others. The agenda for discussion was (1) Settling of Funda-
lead to other important constitutional solutions".64 Ambedkar mental Rights - inclusion of Personal Law of Muslim Sharia in
entered into an agreement with caste Hindus through a dia- the Declaration of Fundamental Rights demanded by the Jamiatul-
logue with Gandhi for three reasons. One, Gandhi acknowledged ulama. This was agreed to in principle, (2) Equal rights to the
Ambedkar as a Depressed Class representative. Second, Gandhi Frontier and Baluchistan, (3) Representation by Convention
conceded the principle of reservation of seats, which he had on Minorities in cabinets and services, (4) Agreement over the
opposed in London. Third, Ambedkar was disappointed with Punjab question, (5) Tentative Settlement of Bengal, and
the communal award. He wrote to the secretary of state that (6) Separation of Sind. Ambedkar wrote a letter to the conference
parts of the award "have come as a shock to me" and "the De- that was read out by G К Malaviya which read "there was no
pressed Classes are furious".65 This leads to an assertion that is greater stumbling block than disunity. Hindus must drop their
contrary to the popular as well as academic consensus on this doctrinaire attitude and Muslims must cease saying that their
historic encounter of 1932 that "Ambedkar was unable to with- first word on the 14 points was also their last word."73 Never
stand public pressure to defer to the force of Gandhi's fast".66 before, in the history of negotiations between communities
and castes, was so much put forward on the negotiating table
Separate Electorates and so much lost. К M Ashraf suggests that "Hindu leaders at
Allahabad approached the problem of Indian minorities even
The aspirations for a wider settlement led to the convening of
a Unity Conference at Allahabad at the tail end of 1932. Themore generously than their predecessors at Lucknow at 1916".74
groundwork for these negotiations was carried out by Pandit
The entire first week was spent discussing the question of
Malaviya and Maulana Shaukat Ali. On 16 October 1932, the"Sind Separation which was giving the greatest trouble".75 A
All Parties Conference of Muslim Leaders hammered out a draft document of agreement was prepared for ratification by
resolution wherein they agreed to put the issue of separate the regional community bodies. The "Text of the Agreement
electorates on the negotiating table "subject to the definitearrived
ac- at by the Unity Conference"76 protected personal laws,
ceptance of the Muslim demands".67 Gandhi's intent to medi- and gave Muslims 51% of the seats in the legislative councils of
ate on these negotiations may be understood by M S Aney'sboth Bengal and Punjab. Hindus were restricted to 44.7% in
letter that said, "Everything will be done as desired by you.
Bengal and to 27% in Punjab. Sikhs were allotted reservations
You will shortly proceed to Allahabad to attend the open of
ses-
20% (as opposed to the 30% demanded by them from the
sion, I believe."68 Maulana Shaukat Ali made an attempt to of the Nehru Report). The text agreement makes it clear
time
have Gandhi released and approached the viceroy who, how-
that the conference did not consider itself to be a definitive body
ever, refused. As for Malaviya's efforts, В S Moonje remarked
and realised that the participants were on a strict mandate.
that "he (Malaviya) is obsessed with one idea, i e, forcing the
Thus, it provided that the agreement had to be ratified by
Prime Minister to now change his award in respect of Mos- the "regional bodies" of the communities. This ratification ran
lems".69 The Mahasabha was still open for a dialogue between
into a series of suggested amendments that the conference
communities. It, however, had its own reasons for doing so. It not resolve and the draft eventually collapsed. This
could
concluded that Hindus "cannot fight the Muslims particularlymarked the end of the phase of "comprehensive negotiations".
if they start civil war. We must concede all 14 points of Jinnah
The unity conference was the last such voluntary public gath-
and, at any cost, resolve our quarrel with the Muslims."70 This
ering of leaders on such a grand scale on the constitutional is-
sue of reconciling the contest between communities. The
statement is indicative of the fact that the word "unity" had
many meanings. Shaukat Ali called this conference the
breakdown of dialogue enabled the introduction of the Gov-
"Swadeshi Round Table Conference".71 It was presided overernment
by of India Act 1935 along with the provisions of the
veteran Congress and Mahasabha leader and eminent consti- communal award as amended according to the Poona Pact.
tutionalist, С Vijayaraghavachariar who, in his opening ad- The following is a brief summary of the main trends in the
dress stated that they had "met to consider the situation cre-
remaining three phases. In the second phase (1935-46), the
ated by the Premier's Award and the Poona Pact. If we wishdominant
to theme was the withdrawal of the Hindu Mahasabha
be a nation, an integration of communities must take place."72
from the constitutional dialogue. In the first phase, they were
On 1 November 1932, an informal gathering had taken place
part of the negotiations from 1925 to 1932. Critical of the com-
of Sikh and Hindu delegates from Punjab, Bengal, Sind, munal
the award, the Mahasabha, under Savarkar, embarked
United Provinces, Central Provinces and Madras at К N Katju's
upon a discourse of cultural confrontation. Further, the
residence at Allahabad. Pandit Malaviya, С Vijayaraghavach-
Mahasabha was suspicious of any negotiations by Congress
ariar, G D Birla, Raja Narendranath, Sir Sundersingh Majithia,
leaders with the Muslim League, especially due to the Con-
Ujjal Singh, Ramanand Chatterjee, Radhakumud Mukherji,
gress' ambivalence on the communal award. The Congress
С В Chintamani, H N Kunzru, M S Aney and В S Moonje wereNationalist Party (cnp) represented the link between the
present. The next day saw the arrival of С Rajagopalachariar
Mahasabha and the Congress but the merger of cnp with Con-
and the Depressed Classes leader from Madras M С Rajah, gress for the 1937 elections broke this link. In 1939, the
Rajendra Prasad, К T Shah, M Shaukat Ali, Abul Kalam Azad,
Mahasabha passed a resolution stating that "the Congress
G В Pant, Giani Kartar Singh (of Akali Dal and sgpc), Sardar
does not and cannot represent the Hindus, no constitutional
Kartar Singh, Giani Sher Singh (sgpc), Ziauddin Ahmad and
settlement arrived at behind the back of the Mahasabha will

5° FEBRUARY 18, 2012 vol XLVii no 7 ШЗЕЭ Economic & Political WEEKLY

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be binding power the fragility
on Hindus until of the constitutional
it is consensus on the
sanction
bha".77 On developmental
the other nation state. Fazl-i-Hussain
side, It remains to be seen how the
dating the All contest
India between these two strands
Muslim manifest constitutionally and
Conference as
organ of Muslim politically. The first strand
opinion of - that of reservation for
India Muslims asthe
till a
community is being
safeguards for Muslims in spearheaded
the by thenew
dominant cultural
const
All groups like the Jamiat-Ulama-i-Hind,
India Muslim League resolution Jamaat-e-Islami, the All
stated
India Muslim Personal Law Board
tion of India's constitutional (aimplb) and the Majlis-e- is t
problems
Ittehadul Muslimeen. The
into independent zones".79 The constitutio second reservations for Muslim dal-
communities its has remained localised,
threatened to unablebeto replaced
match the influence of by
tion. Fazlul Huq, and opposed by the first strand.
according to A curious
the group working
Mahasafor a
actual revolt and civil war if the Indian constitution is not larger Muslim cultural consensus on political issues is the Pop-
ular Front of India which is influential in south India and have
drafted to their entire satisfaction".80 The contest between the
expanded their cultural alliance to include Muslim cultural
two visions of "nation through constitution" and "constitution
through nation" remained irreconcilable. The making of a na-groups from Rajasthan and the Lilong Social Forum of Manipur
(Lilong is a Muslim majority nagar panchayat in Manipur).
tion (independence) and the unmaking (partition) are not par-
allel narratives of secularism and communalism but "lateral
Conclusions
interactions" through constitutional discourse between castes
and communities. The third phase saw the Indian constituentThe engagement of these discourses of castes, communities
assembly preside over the birth of the undefined constitutionaland castes within communities with the processes of demo-
principle of "Indian secularism" by scrapping reservation ofcracy is indicative of the logic of the Indian Constitution being
seats, except for the scheduled castes (Hindus, Sikhs, Buddhists implicated with that of affirmative action. The history of the
but not Christians or Muslims) and tribes and resolved that rep-idea of democracy cannot be delinked from that of constitu-
resentation would be on purely national lines. Nehru stated in tional affirmative action in India. The contest across cultural
the assembly that this was "the right thing to do".81 This was not fault lines between castes, communities and castes within
merely a "moment of containment",82 as Rojana Bajpai sayscommunities manifests itself through many signs, affirmative
rather it was one of the most prolific attempts at a realignment action being one such marker. The anti-colonial nationalist
and reshaping of the cultural fault lines between castes anddiscourse of the mass movements resolved upon swaraj first
communities, as undertaken by the constituent assembly of In-and constitution thereafter. On the other hand, caste and com-
dia, simultaneously with the structuring of the postcolonial wel- munities were, in parallel, seeking an agreement over an
fare state. The Constitution attempted to reinterpret the notion"Indian Constitution" first and thereafter on "India". The ma-
of community as an "empirical fact" of the universalised com-trix of castes and communities is, in postcolonial India, under
munity of welfare scheme subscribers of the Indian nation state. constant re-evaluation as "new" minorities (for instance obcs,
The last and fourth phase consists of the contemporary Jats in Haryana, Gujjars in Rajasthan, emerging Sikh sects or
debate over affirmative action demanded by castes and com-deras) emerge from within traditional ones and leverage for a
munities. The rivets of the consensus on the making of theconstitutional minority status. This trend of Indian politics has
nation state through affirmative action for castes within the and will, besides realigning the cultural fault lines between
Indian constitutional regime while leaving that of community castes and communities, come into confrontation with the
(particularly Muslims and Christians) to the goodwill ofconstitutional principle of a ceiling of 50% on reservations
Indian secularism wherein "the state controls the way in whichestablished by the Supreme Court. This contemporary debate
religious and ethnic identities were conceived and empow-on affirmative action invites a more complicated interpretation
ered"83 are falling apart. They are threatening to collapse than merely "the gradual ascendance of primordial politics"84
under the pressure of emerging demands of affirmative actionif it is seen in the mirror of the unbroken history of embedding
from both castes and communities. The recent momentum in castes and communities within a "shared" constitution that
favour of integrating Muslims within the Other Backwardbegan with "comprehensive negotiations" early in the 20th cen-
Classes (obcs) and dalit Muslims through affirmative actiontury. Thus, re-situating constitutional studies, at least in part,
has brought to the landscape of postcolonial discourses ofwithin "the dialectic of source and discourse" that is, history.

NOTES AND REFERENCES 5 Bipan Chandra (1971): Modern India (Delhi, Democracy" in Zoya Hasan, op cit, 68.
1 A Kohli, ed. (2001): NCERT), 212. The Success 9 Ashok ofAcharya India's(2010): "Constitutionalising
De-
mocracy (Cambridge: 6 For the thematic ofCambridge
Culture, Community and Difference:
University The Indian Experiment" in Achin
Press), 3. Power see Shashi Joshi (1997): Struggle for He- Vanaik and Rajeev Bhargava (ed.), Understand-
2 Zoya Hasan and E Sreedharan and R Sudar- gemony in India, 1920-34, Vol 1 (Delhi: Sage). ing Contemporary India: Critical Perspectives
shan, ed. (2005): India's Living Constitution: 7 For a perspective on constitutional politics and (Delhi: Orient BlackSwan), 75.
Ideas , Practices , Controversies (London: An- caste discourse in Bengal see "Constitutional 10 Mridula Mukherjee Presidential address,
them Press), 9. Politics and a Fissured Community" in Sekhar "Communal Threat and Secular Resistance:
3 Bhagwan Josh (1992) : Struggle for Hegemony in Bandopadhyaya (1997): Caste, Protest and From Noakhali to Gujarat" presented in the Indian
India 1934-41, Vol II (Delhi: Sage), 54. Identity in Colonial India: The Namasudras of History Congress 71st Session, Malda 2011.
4 В R Nanda (1995): Jawaharlal Nehru: Rebel and Bengal, (Surrey: Curzon Press), 136-172. 11 Bipan Chandra (1987): Communalism in Mod-
Statesman, (New Delhi: OUP), 22. 8 Sunil Khilnani, "The Indian Constitution and ern India (Delhi: Vikas Publishing), 206.

Economic & Political weekly ИЗИ February 18, 2012 vol xlvii no 7 51

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12 Dr В R Ambedkar (2009): What Congress and 44 Bombay Chronicle, 6 November 1931, NMML, 64 Ghanshyam Das Birla (1953): In the Shadow of
Gandhi have Done to the Untouchables? (Delhi: Delhi, p 8. the Mahatma: A Personal Memoir (Bombay:
Gautam Books, reprint), 34. 45 Letter, 6 November 1931, С Vijayaraghavachariar Orient Longman), 67.
13 Proceedings of the Sub Commitees, Volume VI Papers, Correspondence В S Moonje, NMML, 65 Viscount Templewood (Samuel Hoare) Papers,
(Franchise), Indian Round Table Conference, Delhi, 1. NMML, Delhi.
London, 1930, Nehru Memorial Museum and 46 N Gangulee (1936): The Making of Federal India 66 Nicholas В Dirks (2003): Castes of Mind: Colo-
Library, Delhi, p 531. (London: James Nibset), 126. nialism and the Making of Modern India (Hy-
14 Mahatma Gandhi, Young India, Volume 13, 47 Ibid, 126. derabad: Orient Blackswan), p 269. Upendra
Issue 2, Volume 14, Issue 2, 327. 48 С Vijayaraghavachariar Papers, Correspond- Baxi (2005) wrote that "In 1932 Gandhi Gam-
15 Wolpert Stanley (2008): A New History of India ence, M S Aney, dated 5 January 1932, NMML, bled on Ambedkar's Self-restraint and Won",
(US: OUP), 259. Delhi, p 1. С Jaffrelot, Analysing and Fighting Caste: Dr
16 Richard Cashman, I (1975) : The Myth of the Lok- 49 Philip Williamson (2003): National Crisis and Ambedkar and Untouchability (Delhi: Perma-
manya: Tilak and Mass Politics in Maharashtra National Government: British Politics, the Eco- nent Black), 65. Christopher Jaffrelot writes,
(California: University of California Press), 214. nomy and Empire 1926-1932 (Cambridge: Cam- Gandhi's fast "forced Ambedkar to relinquish
17 Syed Nesar Ahmad (1991): Origins of Muslim bridge University Press), 491. his demand for Separate electorates and to sign
Consciousness in India: A World-System Perspec- the Poona Pact", ibid, 4.
50 Andrew Muldoon (2009) Empire, Politics and
tive (US: Greenwood Press), 121. the Creation of the 1935 India Act: The Last Act 67 К M Ashraf in J Ashraf, ed. (2008): Historical
18 KM Munshi (1967): Indian Constitutional Docu- of the Raj (Surrey: Ashgate Publishing), 107. Background to Muslim Question in India 1764-
ments, Vol 1 (Delhi: Bharatiya Vidya Bhavan), 7. 1945, Volume 2 (Delhi: Mainframe Publishers), 58.
51 Mahadev Desai (1953): The Dairy of Mahadev
19 С Vijayaraghavachariar, incomplete Papers, Desai, Vol I, Trans Valji Govindji Desai 68 Letter from M S Aney to M К Gandhi dated 24
S No 5, Manuscript Section, Nehru Memorial (Ahmedabad: Navjivan Publications), 291. November 1932 in M S Aney Papers, Subject
Museum and Library (NMML), Delhi, 2. File No 6. 1932, NMML, Delhi, p 6.
52 В R Ambedkar, op cit, Ref 15, 67.
20 Richard Sisson and S A Wolpert, ed. (1988): 69 Moonje Papers, Diaries, NMML, Delhi.
53 Gandhi's interview to press, Madras Mail,
Congress and Indian Nationalism: The Pre-inde- 22 September 1932, NMML, Delhi, 5. 70 Ibid.
pendence Phase (California: UCLA Press), 86. 71 Bombay Chronicle, "Shaukat Ali Blames Viceroy's
54 В D Shukla (i960): A History of the Indian
21 Ayesha Jalal writes that "The Khilafat Move- Liberal Party (Allahabad: Indian Press), 327. Advisors", 1 November 1932, NMML, Delhi, p 1.
ment Overwhelmed the League and Broke the 55 Madras Mail, 20 September 1932, NMML, 72 Ibid, "For United India", 4 November 1932, p 1.
Fragile Constitutional Understanding between Delhi, p 7. 73 Dr Ambedkar quoted in Bombay Chronicle,
Congress and League Which Jinnah Had Pains- "Unity Now or Never", 5 November 1932, p 16.
56 Moonje Papers, Diaries, NMML, Delhi.
takingly Helped to Construct" in A Jalal, ed. 74 Ashraf, op cit, Ref 67, 63.
(1994): The Sole Spokesman: Jinnah, Muslim 57 "Mr Gandhi on Purpose of Fast", Madras Mail,
22 September 1932, 5. 75 Bombay Chronicle, 7 November 1932, p 1.
League and the Demand for Pakistan (Cam-
bridge: Cambridge University Press), 9. 58 С Rajagopalachari Papers, Instalment IV, Sub- 76 M S Aney Papers, Draft Report and the Final
ject File, S No 23, NMML, Delhi, p 5. Agreement in Subject File No 3, 1932, Manu-
22 John Gallagher and Gordon Johnson and Anil
59 United Kingdom, National Archives, Cabinet script Section, NMML, Delhi, pp 34-54.
Seal (1973): Locality , Province , and Nation:
Papers, "Communal Decision", CAB/24/233; 77 M S Aney Papers, Subject File 7, NMML , Delhi, 90.
Essays on Indian Politics 1870-1940 (Cambridge:
Cambridge University Press), 22. SECRET.CP.322(32); Printed for the Cabinet on 78 Malik, op cit, Ref 26, 449.
23 Annie Besant (2003): Theosophist Magazine, 24th September 1932 by the India Office of Sec- 79 А С Bannerjee, Indian Constitutional Docu-
retary of State for India, 5. ments, Vol IV (Calcutta: A Mukherjee, 1945),
July 25-September 1925 (US: Kessinger re-
print), 686. 60 Mahadev Desai Papers, Instalment VI, Diary, pp 171-72.

24 Ikram Ali Malik (1970): A Book of Readings on September 1932, NMML, Delhi, pp 67-72. 80 M S Aney Papers, op cit, Ref 72, 68.
the History of Punjab (Lahore: University of 61 In the aftermath of the Pact many, especially in 81 Constituent Assembly Debates (CAD), Book 3,
Punjab), 446. Bengal and Punjab, believed that "by his threat Vol VIII, 4th edition (Delhi: Loksabha Secre-
of fast unto death Gandhi coerced the Hindus tariat, 2003), p 330.
25 Peter Hardy (1972): The Muslims of British
India (Cambridge: Cambridge University Press to ratify the Poona Pact and separate elector- 82 Rochana Bajpai (2011): Debating Difference:
Archive), 211. ates was changed into reservation of seats at a Group Rights and Liberal Democracy in India
26 Christophe Jaffrelot (2007): Hindu National- premium" M S Aney Papers, Subject File 6, (Delhi: Oxford University Press), 30.
NMML, Delhi, p 138. 83 William Gould, "Contesting Secularism in Co-
ism: A Reader (Delhi: Permanent Black), 13.
27 Ibid, p 67. 62 Pyarelal (1932): The Epic Fast (Ahmedabad: lonial and Postcolonial North India between
MM Bhatt), 64-65. the 1930 and 1950s", Contemporary South Asia,
28 Ibid, p 71.
63 Chimanlal Setalvad, "Poona Agreement as Lib- 14(4), December 2005, 491-92.
29 Uma Kaura (1977): Muslims and Indian Nation-
erals View It", Bombay Chronicle, 15 October 84 D Gupta, "Limits of Reservation", Seminar
alism (Delhi: Manohar Books), 31.
1932, 11. No 549, May 2005.
30 Motilal Nehru Papers, Subject File No 23, Part
(i), NMML, Delhi, 76.
31 Ayesha Jalal (2000): Self and Sovereignty: Indi-
vidual and Community in South Asian Islam
since 1850 (London: Routledge), 307.
32 Motilal Nehru Papers, Subject File 24, NMML,
Delhi, 8.
33 Motilal Papers, op cit, Ref 32, p 59.
34 К L Tuteja (1984): Sikh Politics 1920-40 (Kuruk-
shetra: Vishal), 145.
35 Motilal Papers, op cit, Ref 34, 2.
36 Nehru Report quoted in К Singh, ed. (1991):
Select Documents on the Partition of Punjab,
(Delhi: Natural bookshop), xi.
37 Motilal Papers, File No 23, Part (i), NMML, Delhi.
38 Ibid.
39 Ibid, p 59.
40 M К Gandhi (1970): The Collected Works of
Mahatma Gandhi, Vol xxxviii (Delhi: Government
of India), 436. This entire letter is quite revealing
in terms of the issue of reservation of seats.
41 Motilal Nehru Papers, Subject File 23 (Part II),
NMML, Delhi, p 59.
42 Gandhi's letter to Motilal in Motilal Papers, File
23 (II), NMML, Delhi, 17-23.
43 Judith Brown quoted in Sekhar Bandopad-
hyaya (2004): From Plassey to Partition ( Delhi:
Orient Blackswan), 315.

52 February 18, 2012 vol XLVii no 7 вдш Economic & Political WEEKLY

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Reforming or Replacing the Public Distribution
System with Cash Transfers?

PETER SVEDBERG

The targeted public distribution system, intended to


provide subsidised food to poor households, is the the economic reforms gained momentum in the early
The the 1990s, rapid1990s,economic at economic
at an annual an annual
rate of about 5% perreforms
capita, growth
has not rate gained of about India momentum has 5% per experienced capita, in the has since early not
largest welfare programme in India, with a budget
been followed by much improvement in welfare of the poor.
corresponding to about 1% ofthe net national
The National Sample Surveyproduct.
Office (nsso) surveys show that
Several studies have found the system to be
the averageinefficient
monthly per capita household consumption ex-
and costly in assisting the poor. This paperpenditures (mpce) only grew by 1.5% per yearthe
analyses from 1993-94 to
2009-10. Poverty, as measured by the share of the population
case for, and against, replacing a reformed version of this
with mpce below the official poverty line, only dropped from
system with a targeted and differentiated36%cash transfer
to 27.5% between 1993-94 and 2004-05, the two years for
scheme. Such a scheme could cover about two-thirds
which comparable official estimates are availableof
so far.1 (New
households, and make far larger transfers estimates
tofor 2009-10
the are expectedpoorest
shortly.) The dismal reduc-
tions in poverty show that the shining economic growth in In-
compared to the actual subsidy embedded in the
dia has left large sections of the population in the shade. It is
current system, eliminating the risk of large
therefore exclusion understandable and laudable that the Government
errors. Further, the overall budget can be held at (goi)
of India the has rejuvenated and extended the financing of
present outlay level. It is argued that mostseveral
ofthe large welfare programmes in recent years.
The largest permanent goi welfare scheme is the targeted
objections to such a transfer scheme can be
public distribution system (tpds), which aims at providing
circumvented at the design stage. subsidised food to mainly poor households. The overall objec-
tives of this paper are to highlight the functioning of the tpds
till date and discuss the case for replacing it with a targeted
cash transfer (ст) scheme. These issues have been intensively
analysed and debated in recent years by academics, govern-
ment officials, politicians, media representatives, non-govern-
mental organisations (ngos), advocacy groups and interna-
tional organisations. The debate has often been quite polar-
ised and not always very analytical. Narayanan (2011) even
claims that:

Missing from these discussions, however, is a careful assessment,


based on substantive and scholarly empirical evidence, of the ability of
cash transfers to achieve stated goals and the contextual conditions
under which these programmes can succeed or fail.

There are, however, important exceptions, for example,


Kapur et al (2008), Drèze and Khera (2010), Khera (2011b) and
Himanshu and Sen (2011), not cited by Narayanan.
The present paper aims at contributing more "substantive
evidence" by making a step-by-step, issue-by-issue compari-
son of (1) the existing tpds, (2) the main proposals for a
semi-universal food subsidy programme, and (3) a targeted
Constructive comments from Alok Bhargava, Angus Deaton and Reetika
and differentiated ст scheme. What this paper attempts to
Khera on a previous draft are gratefully acknowledged. None of them are
contribute more specifically can be summarised in five
responsible for any error or opinion expressed in the paper.
points. First, the paper analyses the flaws in the present
Peter Svedberg ( peter.svedberg@iies.su.se ) is with the Institute for Inter-
tpds; many of these are well known, but the findings here
national Economic Studies, Stockholm University.
show the inefficiencies (excessive costs) to be even larger
Economic & Political weekly E3333 February 18, 2012 vol xlvii no 7 53

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SPECIAL ARTICLE = ^

than earlier understood and the effects on the main outcome Table 2: Estim
MPCE, Rural and Urban Areas and Combined (2004-05)
variables, poverty and malnutrition, to be practically nil.Household Category TPDS Grain TPDS Value of TP
Second, the paper assesses recent proposals for a reformed Purchases Subsidy for Households Ho
(Kg/House- (Rs/Kg) (Rsper (Rsper
(t)pds and finds them to be more costly than hitherto pro- hold/Month) Household/ Person per
jected. Third, a simple model for how to select households for per Month) Month) per Month

inclusion in a CT scheme is developed, based on three inclu-


Poor households Rural 14.69 3.91 57.4 11.5 288.6 4
sion criteria that are easy to understand, transparent, verifi-
with BPL and Urban 17.43 4.96 86.5 17.3 432.8 4
able, difficult to falsify and intended to include two-thirds of
AAY cards Combined* 15.17 4.09 62 12.4
all Indian households, thus ensuring that exclusion and
Poor households Rural
inclusion errors are minimised. Fourth, it will be shown that
without BPL Urban 2.48 4.96 12.3 2.5 432.8 0.6
the proposed ст scheme can be financed within the present
and AAY cards Combined* 2.56 4.23 10.8 2.2
TPDS budget - while the reformed and semi-universal pdsAll poor Rural
programmes that have been suggested would entail at least households
a Urban

doubling of the budget. Finally, it will be argued that most of


the objections to a comprehensive ст scheme in India are * Weighted average by size of rural
Source: Calculations based on NSS (2
based on obsolete perceptions of the technological infra-
structure required, or are "problems" that can readily be the subsidy to poor ho
handled at the design stage. higher than the actual f
When it comes to the s
Benefits to Poor Households and TPDS Budget: to improve food securit
A Snapshot more disappointing. On
The two main (interrelated) aims of the tpds are to alleviate holding bpl or aay ratio
poverty and malnutrition among poor households. In 2004- households who have to
05, nearly 20 million poor households holding below povertyhigher market prices. I
line (bpl) or Antyodaya Anna Yojana (aay) ration cards pur- cardholder households
chased an estimated 3.6 million tonnes of subsidised tpds than their peers withou
grains. The 33.5 million poor households without such cardsnot large (and non-signi
managed to buy an additional one million tonne, bringing the that the tpds has improv
total up to 4.6 million tonnes. With a weighted average subsidy poor in India.3
of tpds grains of approximately Rs 4,100 per tonne (Rs 4.1/kg),Table 3: Poor Households' Purch
Other) (2004-05)
the estimated total subsidy to all poor households amounted to
Area

about Rs 19 billion in 2004-05 (Table 1). with BPL or AAY Card without BPL or Difference Difference
(Kg/ Household/ AAY Card (Kg/ (Kg/ Household/ in%
Table 1 : Estimated Actual and Hypothetical Transfers to Poor Households Month) Household/ Month) Month) [4]=[3/2]*
Embedded in the TPDS Subsidy, Rural and Urban Areas Combined (2004-05)
As Actually Estimated Hypothetical
Rural
With BPL or Without BPL All Poor Perfect
or AAY Card or AAY Card Household Scenario Urban

Combined#

[1] Numbe* Three lowest


households (million) 19.74 33.52 53.26 53.26 Source: Calculat

[2] TPDS purchase of grains


There is n
(kg/household/month) 15.17 2.56 7.24 35
Food and P
[3]=[1*2] Total purchase of TPDS grains
(million tonne/year) 3.59 1.03 4.63 22.37 food subs
[4] Weighted average offtake of
TPDS subsidy (Rs/tonne) the centra
[5]=[3*4] Total value of
tpds budg
TPDS subsidy (Rs billion)

[6] TPDS budget for 2004-05 sidies, one


(Rs billion) approxima
[7]=[5/6] Total was
value of budge
TPDS subsi
as % of budget
to poor h
Source: Calculations based on N
11% of the
The subsidy
forto the r
each
per month,2 or the
tpds, Rs 6G
crease in their
is MPC
consider
on the from
basis of the
the sh
cards and 2003-04.
their actua
4
thetical situation
total wh
gover
aay product (nnp).
ration cards and

54 FEBRUARY 18, 2012 vol XLVii no 7 ШИ Economic & Political WEEKLY

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The GOi hence spent about 1% of national income to boost Most of what is know
the purchasing power of the average poor household by less inal investigation
than 2%. The meagre subsidy to poor households embedded reported in nation
in the TPDs - in relation to budget costs - and the failure to include corruption
enhance food consumption and nutrition, reflect severe mal- small fps owners t
functioning across several dimensions. boggling scales.6
The obvious way o
Waste, Leakages and Diversion ensure that facilitie
The Planning Commission (2008) has estimated how much of city has remained
the TPDS rice and wheat are leaked en route by first estimating (Department of Foo
the amount of such grains reported to have been purchased by reduce leakages duri
all household categories - poor and non-poor, with and with- tpds has been intro
out ration cards of all types, whether bpl, aay or above new techniques inc
poverty line (apl). These estimates are subsequently com- TDPS grains, and dep
pared to data on how much grain is taken off from the Food tate monitoring of
Corporation of India's (fcis) central pool for delivery to the diversion of grains a
TPDS depots in the states. The Planning Commission (2008) made of simple pape
has estimated the leakages at three points in time, the most holder) have increas
recent being 2004-05 (Table 4). In this year, consumers are that are difficult t
reported to have bought 13.53 million tonnes in the fair price sales electronicall
shops (fpss), out of which 4.6 million tonnes were bought by Distribution 2009 f
poor households. In the same year, 29.65 million tonnes of rice leakages during sto
and wheat were taken off the central pool for tpds cardhold- Most of the reform
ers, including apl. Hence, more than half (54%) of the grain only implemented o
taken off for the tpds disappeared before it reached buyers in Evaluations from Ta
the fps. Moreover, the leakages have increased compared to have been in the fo
1993-94 and 1999-2000, and are estimated at 28%. Estimates improvements in o
based on a "small" expenditure survey from 2007-08 suggests higher financial bur
that the leakages have declined somewhat, to 43% since 2004- up GOi subsidies (H
05 (Himanshu and Sen 2011; Khera 2011a), but were still larger With a CT scheme a
than in 1999-2000.5 (When the final household food expendi- ble poor households
ture data from the 2009-10 nss become available, it will be numbers (uids) that
possible to gauge the trend more reliably.) next few years, ac
Table 4: Estimated Consumption of TPDS Rice and Wheat as a Percentage of
reduced. The central
TPDS Off-take/ Rural and Urban Areas Combined, Selected Years (million tonnes) to 30 to 35 million
gramme), will vani
[1] TPDS consumption
the existing high-qua
[2] TPDS off-take
remaining food secur
[3]=([2] - [1])/[2] Leakage (%)

* The estimate for


tonnes).
2007-08 is based on
Most
data
of
from a "sm
the
comparable with the out "large"
previous by the Fci
survey wou
estimate
Sources: Planning Commission (2008), Table 4.1.8 (19
Himanshu and Sen already
(2011), Table 4 now
(2007-08). handle
siderably lower cos
The estimated 4.6 million
scheme, thetonnes
fpss o
wo
by poor households - with
commercial and witho
shops, a
- corresponds to 15.5%
the of level
retail the total
evap
(29.65 million tonnes). This means
sidised grains Underutilisation
bought by the of
poor
central pool was In6.42004-05,
kg. This estima
the la
than the 2.4 estimate kg
for holding
households 2003-04
mission (2005). average less than h
That about halfthe
thesame
tpds time,
grains is
the
consumers reflects inefficiency,
(around 50 kg percom
gigantic scale. It twice
would,
as of course,
high as theb
poses to know Theabout
more Planning Comm
where in
losses are the most serious,
views, foundbut as
that w
activities in general,
both solid informati
supply- and d

Economic & Political weekly ЕЕШ February 18, 2012 vol xlvii no 7 55

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Table 5: Estimated Purchases of Grain (Rice and Wheat) from TPDS and Other for 25.7% of the population, the de facto targeting of the tpds
Sources by Average Poor Household Holding BPL or AAY Ration Card, and
Embedded Subsidy, Rural and Urban Areas and Combined (2004-05)
was slightly in their favour. The share of the grains bought by
TPDS Purchase Other Purchase Total Purchase TPDS/ TPDS Market TPDS non-poor households holding bpl or aay ration cards was also
(kg/ household/ (kg/ household/ (kg/ household/ Total Price* Price* Subsidy
38% - the actual inclusion error (Table 5, panel B).
month) month) month) Purchase (Rs/kg) (Rs/kg)
The above estimates of exclusion and inclusion errors, and
Rural 14.69 the similar ones derived by the Planning Commission (2008),
Urban 17.43 32.05 49.48 0.352 4.66 9.63 4.96
build on the assumption that a household's consumption ex-
Combined 15.17 36.24
penditure (mpce) in one particular month and year (2004-05)
* Weighted average of rice and wheat in proportions purchased in rural and urban ar
households with BPL or AAY ration cards. is a relevant proxy for its permanent income and poverty sta-
# Population weighted average of rural (0.824) and urban (0.176) prices.
tus. This assumption has to be qualified.
Source: Calculations based on NSS (2007), Detailed Tables 1 R, 1 U, 5R and 5U.
There is plenty of evidence showing incomes (earnings) of
The central government and the concerned ministries have poor households fluctuating markedly over the short term.
undertaken (or plan) several reforms to make tpds grain moreHowever, consumption expenditures are much more stable.
attractive to poor households. Most importantly, the subsidyThe most detailed evidence from India is based on the Inter-
per kg of grain has been raised in real terms year-by-year by national Crops Research Institute for the Semi-Arid Tropics
keeping the central issue prices (cips) constant (or lowering (icrisat) database, which contains income as well as con-
them), while the retail market prices have gone up in line withsumption expenditure data for a large number of households,
inflation. The goi has also enacted a "right to information act"month by month over several years. The two data series reveal
that aims at making poor households more aware of their how remarkably little present (monthly) household income in-
entitlements and encourage the venturing of complaints. fluences present consumption. The smoothing occurs mainly
That the average poor household holding a bpl or aay ration through savings, borrowing and storing grains; very little
card purchases less than half the tpds grains allowed indicates occurs through sales or purchases of assets, such as livestock
serious dysfunctions in the system. One would expect that fewand consumer durables (Townsend 1995).
households eligible for a cash transfer would abstain from col- The low covariation between household income and con-
lecting money. Thus, the underutilisation problem would be sumption on a monthly basis suggests that the mpce estimates
resolved. For poor households, cash in hand rather than subsi- obtained through the nss, even if not estimated with perfect
dised, but low-quality grain from the fps would be a great boonprecision, ought to be quite good proxies for household perma-
in several ways (Kapur et al 2008). As is the case now, manynent income, at least in the short and medium terms.9 We can
ration cardholders only have access to one fps and therefore littletherefore be reasonably well assured that the estimated exclusion
ability to avoid cheating and bad service. With cash, they wouldand inclusion errors reported above are not totally off the mark.
be able to choose freely, not only which shop to buy grain from,
but also the quality and variety of their preference. Cash trans-Reforms for Improving Targeting in the TPDS: New central
fers will also give households more flexibility to buy food items guidelines to the states for how ration cards should be allo-
other than rice and wheat, which may encourage more balancedcated, planned to be issued in 2009, were agreed upon by the
and nutritious diets. Perhaps most importantly, migrant workers, union cabinet only in May 2011. This delay attests to the diffi-
accounting for between 10% and 16% (depending on definition) culties and complexities involved. The new guidelines are a
of the working age population in 2007-08 (nss 2010b), who are blend of inclusion and exclusion criteria and score rankings of
presently not allowed to use ration cards outside their place ofhouseholds, much like the previous ones (from 2002), albeit
residence, would be able to withdraw cash anywhere. less comprehensively. Those excluded are government em-
ployees, taxpayers and households in possession of expensive
Targeting durable goods (projected at 28% of the population). Those
Table 6: Distribution of BPL and AAY Ration Cards and TPDS Grain Purchases by
Exclusion and Inclusion Errors in 2004-05: In 2004-05, an Different Income Categories of Households, Rural and Urban Areas Combined
(2004-05) (estimated actual and systemic exclusion and inclusion errors)
estimated 25.7% of all Indian households had an mpce belowHousehold Households with Households without All Total TPDS Number of
the official poverty lines. Out of these, 9.6% were in the posses- Category BPL or AAY BPL or AAY Households Purchases Households
Ration Card (%) Ration Card (%) (%) (million tonnes) (million)
sion of a bpl or aay ration card while 16.1% were not (Table 6,
panel A). Hence, almost two-thirds (63%) of the poor house- Panel A: Di
holds were not covered by the system, indicating a substantial Poor*

systemic exclusion error. About 62% of all bpl and aay cards Non-poor

were in the hands of non-poor households, suggesting a large All

Panel B: Di
systemic inclusion error.
Poor households holding bpl or aay cards purchased some Non-poor 38.4 23.8 62.2 7.57
Poor*

30% of the total tpds grain sales (estimated at 12.17 million


All

tonnes), while other poor households managed to buy another *The percent
estimate at 2
8%, or one million tonnes.8 Out of total tpds grain sales, poor
unit-root dat
households hence bought about 38%. As the poor accounted Source: Calcul

February 18, 2012 vol XLVii no 7 Q3S3 Economic & Political weekly

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automatically included are the homeless and others who are scheme with food security and poverty alleviation as the over-
completely destitute (3-4%)- Other households are to be all objectives, a low economic status is the obvious condition
assessed according to seven indicators and ranked in order of for eligibility.
priority in the bpl list. All-in-all, with the new guidelines, 46% Eligibility in an Indian ст system should ideally be based on
of rural households are expected to be included in the bpl list conditions that are easy-to-understand, readily observable,
(Balchand 2011). transparent, objectively verifiable and difficult to falsify or
However, so far state governments have not been bound to qualify for through behavioural adaptation. In addition, of
follow the central guidelines; they have set up their own criteria course, the criteria should be closely correlated to low income
for the distribution of ration cards. These vary from state to and wealth and lead to small exclusion and inclusion errors.
state; some have issued cards to most households while others There is no perfect set of criteria that matches all these condi-
only to a tiny fraction (Himanshu and Sen 2011). Large exclu- tions, but the "model" suggested here should produce satis-
sion and inclusion errors nonetheless suggest that whatever fying results, based on three inclusion criteria only:10 all
criteria actually used for allocating bpl and aay cards, in scheduled caste (sc) and scheduled tribe (st) households, all
most states they have been quite blunt as instruments for tar- casual labour households and all households with no literate

geting poor households. adult (Table 7).11


Would the exclusion errors be eliminated by making food Table 7: Suggested Criteria for Selecting Households Eligible for Receiving
CT and Estimated Shares of Eligible Households and Poverty Incidence in
subsidies available to all households, i e, by returning to the Respective Category, Rural and Urban Areas Combined, (2004-05)
pre-1997 universal pds? This is what the Indian Right to Food Inclusion Criteria Household Poverty Poverty MPCE as
Meeting Incidence Over-repre- Per Cent of
Campaign (rtfc), underwritten by many prominent scholars
Criterion (%) (%) sentation (%) Average
and organisations, has advocated and also what some analysts
have concluded (Kotwal et al 2011). Drèze and Khera (2010) (1) SC/ST household Rural

and Himanshu and Sen's (2011) say that avoiding exclusion er- Urban 18.1 28.2 55.8 73.7

rors is central in their proposal for a (semi-) universal pds.


The evidence in support of universality as an efficient (2) Male household head Rural

casual labourer Urban 14.6 28.8 97.3 55


method for eliminating, or even notably reducing, exclusion
errors, is not altogether convincing. Before 1997, the pds was
(3) No literate adult household Rural 26.1 na na na
in principle universal, but large proportions of poor house- member Urban 8.4 na na na
holds were either effectively excluded, or purchased very Combined 21.2 na na na
small amounts of subsidised grains. On the basis of 1993-94 Sources: (1) NSS (2010a), Table 19 (2007-08) and NSS (2
(MPCE 2004-05) (Rural/Urban= 0.822/0.178).
Nss data, Dutta and Ramaswami (2001) found that the poorest
(2) NSS (2006a), Statement 5.8 (Rural/Urban = 0.725/0
household quintile, on average, managed to purchase about in column [4] are based on NSS (2007), Detailed Tables

10% and 20% of the pds grains allowed in Maharashtra and (3) NSS (2006a), statement 3.8 (Rural/Urban = 0.725/0

Andhra Pradesh, respectively. Other evaluations of the pre- The three criteria delineate house
1997 pds also report blunt de facto targeting of poor house- lapping) that are truly poor. Amo
holds (Jha 1992; Ahluwalia 1993; Howes and Jha 1992, 1994; prevalence of poverty in 2004-05 w
Dev and Suryanarayana 1991; Parikh 1994). gested by their share in the populati
One may also gauge the extent to which universality re- only 80% of the all-India average.
duces exclusion errors by consulting more recent estimates the (male) head was a casual laboure
from Tamil Nadu, the only state that opted for a universal pds of poverty was 60%; their mpce a
after 1997. In 2004-05, about 80% of the households in the (Table 7). For illiterate male workers
three lowest mpce deciles in Tamil Nadu reported consump- half, and for illiterate female work
tion of pds rice, but practically no wheat. This share is more pared to their literate counterparts (
than twice as high as the all-India figure (nss 2007), but it still
Table 8: Daily Wage and Work Force Participati
reflects substantial exclusion of poor households. To have a and Literate Workers (1 5-59 Years), Male and F
(2004-05)
right to purchase subsidised grains is obviously not sufficient
Wage (Rs/day) Work Force Participation Ratio (WFPR)*
for eliminating exclusion; the system has to be known, attrac- Male Female Male Female

tive and accessible as well, and ensuring this entails costs. Rural Urban Rural Urban Rural Urban Rural Urban

Illiterate

Targeting the Poor in a CT Scheme: In a non-targeted ст Literate#

Illiterate/literate (%) 39.9 45.1 19.4 22.6 1.08 1.1 1.54 1.68
system, there would be no or few self-imposed motives for ab-
* In rural and urban areas, 4.4% and 7.8% of all households reported that no member o
staining from claiming a cash receipt. A completely universal household was "usually employed" in 2004-05 (NSS 2006a, statement 3.9).
# Derived as residuals.
ст would hence carry a huge financial burden if the individual
Source: NSS (2006a), statements 5.5 (WFPR), 5.6 (literacy) and 5.1 1 (daily wages).
transfers are not to be merely symbolic. Moreover, the redistri-
butional impact would not necessarily be particularly pro-poor The exclusion error can be expected to be small in the
(almost everyone pays, everyone receives). Some selection proposed ст scheme. It is difficult to believe that many house-
mechanism or conditionality is therefore called for. In а ст holds who are genuinely poor would fail to qualify on all three

Economic & Political weekly E32Q February 18, 2012 vol xlvii no 7 57

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criteria. The three criteria are all observable, easy-to-under- - continues at the recent pace.13 The proposed reform with the
stand and transparent, but not foolproof verifiable. It is con- largest budget burden, however, would the substantial increase
ceivable that a household can fake one inclusion criterion, in the eligibility to purchase subsidised grains, as proposed in
most likely illiteracy, but hardly all three. Given that the trans- the 2011 BPL guidelines. The goi has yet to publicise an esti-
fers are differentiated and the sum provided to households mate of the budget required for the pds when the new guide-
who fulfil only one criterion relatively small, the incentive for lines are applied.
reasonably well-off households for faking eligibility is weak. A few attempts have been made to estimate the costs of semi-
Inclusion error could occur, however, if many households un- universal pds programmes with slightly broader coverage than
der the three inclusion categories are in fact high-income earn- envisaged in the new bpl guidelines. The estimates of the sub-
ers. For casual labourers, readily available data show about sidy cost derived by Khera (2009) range from R s 820 billion to
10% (rural and urban average) are in the three highest mpce Rs 1,150 billion, contingent on the amount of grains allowed
deciles (nss 2006a). This covers the about one-third relatively per household and month. In Himanshu and Sen's (2011) pro-
well-off households that are intended to be excluded from the posed scheme, there would be three constituencies entided to
proposed CT scheme. If the main concern is to avoid exclusion purchase subsidised grains at different prices. Based on pro-
errors, inclusion errors of this magnitude may be tolerable. jected demand for pds grains at these prices, the authors esti-
mate the annual outgo subsidy required at Rs 794 billion. The
The Financial Burden lowest of these pure subsidy estimates could be financed within
the current overall food subsidy budget, but would leave
Growing Financial Burden of the TPDS: The goi food sub- for other programmes. Moreover, none of the estimates
nothing
sidy budget increased in real prices by a factor of 3.7 between
include the running costs of an enlarged semi-universal pds.
1999-2000 and 2009-10. The real nnp per capita increased by
In 2004-05, the subsidy embedded in the total consumption
a factor of 1.7 over the same period, signifying that the of
growth
the tpds grains purchased by all household categories was
of food subsidies outpaced the growth of national income perRs 55 billion (13.5 million tonnes and a weighted average
about
capita by a factor of 2.2. The steepest increase in the foodof Rs 4-i/kg; see Tables 1 and 5). With a tpds budget of
subsidy
budget occurred since 2006-07 (almost doubling), while nnp
about Rs 175 billion in that year, the pure subsidy accounted
per capita grow by a cumulative 17.6% only (Figure 1). for some 31%, while the remaining 69% covered operation
costs, waste and leakages.
Figure 1: Real Growth of NNP Per Capita, Food Subsidy Budget, TPDS Offtake
and TPDS Purchases by All Consumers, Base 1999-2000
Khera (2009) and Himanshu and Sen (2011) refrain from
providing an estimate of the total budget requirements for
their proposed semi-universal pds. The latter are convinced
though that "the more universal the pds is, the less likely it is to
suffer from leakages " (2011: 42, italics in original). They find
support for this claim in the fact that across states, leakages
are the lowest in the states with the highest eligibility rates
and the largest tpds subsidies. However, even if the pure
subsidy component in their pds can be increased from 31% in
2004-05 to 50%, the total budget burden would be twice their
estimated Rs 794 billion, or close to Rs 1,600 billion. This
would increase the total costs of the programme from about
The offtake of grains from the tpds for poor households
1%hold-
of nnp presently to 2%.
ing BPL or AAY ration cards grew at roughly the same pace Himanshu
as the and Sen estimate that the demand for pds grains
food subsidy budget over the entire 1999-2000 to 2009-10 in
period,
their suggested scheme will be between 60 and 100 million
but more steadily (Figure 1). Estimates of total consumption
tonnesofper year and similar volumes are projected in other pro-
tpds grains by all households are only available for three years
posals for a semi-universal pds. These quantities are the equiv-
(1999-2000, 2004-05 and 2007-08) and show an increase from
alent of between two and three times the average annual off-
12.3 to 18.9 million tonnes over this period, or by 53.4% (Table 4). the tpds in the 2004-05 to 2009-10 period (Depart-
take for
(A trend estimate for the whole period has to await the mentpublica-
of Food and Public Distribution 2010). The upper-end es-
timate corresponds to about half the annual rice and wheat
tion of the 2009-10 nss household food expenditure survey.)
production in India and is equal to all grains that are marketed,
Proposed Reforms of the TPDS and Budget Costs: The andcosts
about half of what is produced (Ramaswami and
for the reforms of the tpds aimed at reducing leakages and
Balakrishnan 2002). None of the proponents of semi-universal
enhancing efficiency, discussed above, may be covered food
if they
subsidy schemes expect any serious market disruptions
succeed in substantially stifling waste, leakages and diversion
arising from such state monopsony.
of tpds grains, but this is yet an unknown. What will be costly,
though, is the policy of keeping the cips fixed in nominalCTs
terms
and Budget Costs: An obvious ensuing question is, first,
if food price inflation - and the minimum support priceswhether
(msps) a doubling of the food subsidy budget would be
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acceptable - a political question that can be left aside here. A were Rs 452
second question, addressed here, is whether better outcomes to the poore
can be accomplished in an alternative way at considerably income by 2
lower costs, through a differentiated and targeted ст scheme. A difficult
In the following, a budget for such a scheme, aimed at cover- who should
ing two-thirds of Indian households, will be simulated. The solution wou
size of the per household transfer will be set at levels that en- ing the biom
sure that the scheme can be financed within the budget for the criteria. Thi
TPDS as of 2010-11. census. The
The suggested differentiation of the transfers to households be produced
that meet the first, second and third inclusion criteria is pre- the national
sented in Table 9, column [1] and range from Rs 2,000 to patible. How
Rs 6,000 per household and year. In column [2], the estimated and so can p
percentages of households who fulfil the three different com- population d
binations of criteria are given. (These estimates are from 2004- solete as tim
05 and are assumed to carry over to 2009-10.) Applying the more freque
estimated shares in column [2], the numbers of households involve local
fulfilling the different combinations of criteria in 2009-10 are in their hand
calculated in column [3]. Adding up, about 155 out of a total of ture the sch
240 million households, or almost two-thirds, would qualify
for ст eligibility. This share is considerably larger than the The Case fo
46% estimate in the 2011 bpl guidelines, slightly smaller than
the expected coverage in the semi-universal pds proposals,14 The Case for
but much higher than in either the Mexican Oportunidades or ст scheme su
the Brazilian Bolsa Familia (Hanlon et al 2010). households c
huge compar
Table 9: Estimated Budget Cost of Targeted CT with Differentiated Transfers
according to Inclusion Criteria Met, Rural and Urban Areas Combined (2009-10) (3) the impa
Household CT Distribution Estimated Number Total CT Per CT
risk of larg
Category (Rs/Household/ of Household of Household HH Category (Rs/Person/
Year) (%) (million) (Rs billion) Month) corruption a
slashed, (7) n
All households*
(9) objectio
1 criterion 2,000
would proba
2 criteria
dished as po
3 criteria
level of the
To this, one
Any criteria (sum)

(Oportunid
Weighted average CT

* Approximate total
number of ho
estimated the
201 1 very
Census few
and in the
Source: Calculations as explained i
proved effic
In column evaluations,1
[4], the per
inclusion world
categories (Hanlo
ha
number of qualifying h
the total cost
Theof the ag
Case tr
three categories
rily sums u
against
11 TPDS budget
ductionof Rs
of 6
d
mately Rs 160
will billion
be f
misu
a per grity
person (Drèze
basis, the
minimum the
of Rsuids
33 is
per a
m
rion to Rs why
100 not
for us
the s
all three cash
criteria to poo
(Table
gre transfer food to in thea av
sy
TPDS cient in all its
(Table 2),dimensions? these su
AccordingThe most to recently
articulate opponents to а ст scheme, who would
consumptionrather see a reformed expendit
and (semi-) universal food subsidy
households system, in the
explicitly argue that two
the elimination of exclusion errors
and urban is their
areas
overriding objective. They are amoun
not convinced that uid
(nss 2011). For
coverage will become universal the poo
(or even close to it). They fear

Economic & Political weekly DBS February 18, 2012 vol xlvii no 7 59

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that those who, for various reasons, are left out will not have to the Telecom Regulatory Authority of India's latest Indian
access to many public services (Khera 2009; Drèze 2010; Telecom Services Performance Indicators from 9 January
Drèze and Khera 2010; Himanshu and Sen 2011) - including 2012.21 For Indian households not possessing a mobile phone,
potential cash transfers. The concerns about exclusion errors the incentive to buy one would be strong for those found eligi-
cannot be dismissed, and even if full urn coverage is accom- ble for a cash transfer.22
plished, exclusion can occur due to faulty targeting for eligi-
bility. Evaluations of the pre-1997 pds, and more recently Cash Transfers in India to Date: The case for replacing sub-
from Tamil Nadu, find exclusion errors occur even in universal sidies with cts has gained ground in India generally. Most
systems. However, the differentiated ст suggested above notably, in the mid-2ooos, nrega replaced a plethora of
would include two-thirds of all Indian households; that the earlier work-for-food schemes with cash for work. The goi has
one-third of households left out would include many of the announced that subsidies for fertiliser and kerosene will be
desperately poor is difficult to imagine. replaced by cts (Kapur 2011).
Another objection is that "it is not clear how transfers of A member of the Planning Commission has published a
cash to the poor would allow them to buy grains from the open paper arguing for replacing five subsidy schemes with cts
market in times of steep inflation" (Shah 2008: 78). The solu- (Mehrotra 2010). State governments in Delhi, Haryana and
tion is to index the transfers to the real price of basic food Uttar Pradesh have submitted proposals for substituting food
items, which is technically simple, but politically sensitive. subsidies with cash transfers on a pilot basis. Moreover, state
Other sceptics have argued that providing cash rather than governments have increasingly adopted conditional ст
tying the transfer to food subsidies may lead to "unwarranted" schemes aimed chiefly at keeping girls in school and unmar-
consumption, such as tobacco and alcohol. This may well be ried before the age of 18, but also for providing incentives for
the case, but ignores the possibility for fungibility in house- mothers and children to attend health clinics (undp 2009).
hold consumption in the present system. Subsidised foodgrains Other, unconditional ст schemes in India, are targeted to the
means that households have the effortless and costless option old, widows and disabled; these schemes are still small, but
to cut down on open-market purchases of grains and use the efficient according to a recent evaluation (Dutta et al 2010).
money thus freed to buy whatever they prefer.18 The Chief Economist at the Ministry of Finance has given the
The most frequent argument against а ст scheme was valid nod for replacing food subsidies with cash or food coupons, al-
till a few years back, but no longer. It was argued that in order though with some reservations (Basu 2011). The goi and the
to receive a transfer, households need not only a unique digi- Planning Commission seem split, however, and have yet to
tised identity card, but also a bank or a post office account, commit either to а ст scheme or to a thoroughly reformed pds.
which about half the rural population in India lacks, according
to the National Bank for Agriculture and Rural Development Concluding Remarks and Caveats
(nabard). However, such accounts are no longer necessary for In the attempt to put numbers on the benefits accruing to poor
being able to receive cash. With modern technology, money households from the ст scheme proposed here, no general
can be transferred through ordinary mobile phones. The most equilibrium effects have been taken into account, only direct
successful and well-known such scheme is the Kenyan m-pesa ones. There are many conceivable indirect effects. Concerns are
(mobile money in Swahili), which can be used for a variety of always raised that providing unconditional cash (or subsidised
transactions. It was started in 2007 and as of April 2011, had food) to poor households will lead to reduced labour supply.
14 million subscriber (more than half the adult population).19 That is conceivable, but on the other hand, it is well established
Similar schemes are under implementation in many countries, that higher incomes lead to improved diet quality in India,
including India. especially intake of proteins and micronutrients, which boosts
An Indian operator, Little World, has recently started a labour productivity significantly (Bhargava 2008).
branchless micro-banking system based on biometrie identifi- Another concern is that higher incomes of the poor will
cation that can be used for cash disbursals of social security increase demand for food and hike up food prices (Ramas-
pensions, wages under the Mahatma Gandhi National Rural Em- wami and Balakrishnan 2002). However, the procurement of
ployment Guarantee Act (nrega), housing grants, domestic re- about half of the total marketed Indian grain production by
mittances by migrant labourers and a host of other services. So the FCi at Msps, well above farm-gate prices, has most cer-
far the scheme covers only three million households (in tainly driven up market retail prices (Basu 2011); scrapping
20,000 villages in 18 states), but 25,000 new accounts are this system should hence lower prices. It may also be that cash
opened each day.20 transfers have (positive) externalities in that ineligible house-
It is hard to believe that India, with its world-class software holds benefit as well through various channels. A study of
industry, will not be able to find the technical solutions the Mexican Oportunidades has found evidence of this
required for distributing cash electronically to poor house- (Angelucci and De Giorgi 2009).
holds in а ст scheme. In a few years time, it seems that almost Even though no attempt to capture indirect effects and
every adult Indian will possess a mobile phone. As of September externalities has been made in this paper, we can conclude a
2011, the total number of wireless subscribers had reached priori that the conceivable indirect effects point in different
874 million, reflecting a 25% increase over one year, according directions. Moreover, estimating the net effect in the Indian

60 FEBRUARY 18, 2012 vol xlvii.no 7 Ш35Э Economic 8c Political WEEKLY

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= SPECIAL ARTICLE

context A switch from the tpds to a targeted and differentiated


would not all-
exists.
WeIndia ст scheme, based on biometrie uip cards, cannot take
hence ha
which have place before these have been
had issued to all households,su
or to
then encouraging the great majority. This will take time, perhaps several years, t
transfers worldwide find the effects on outcome variables to and meanwhile many pilot ст schemes should be tried out in
be overwhelmingly positive and with few negative side-ef- the states and districts where the issuing of uid cards has ad-
fects (for example, Hanlon et al (2010), Bhutta et al (2008);vanced the most, a process that has already been initiated.
also see Coady et al (2004) and Behrman et al (2004). It is then important that possibilities for strict evaluation
A comprehensive Indian ст scheme is unlikely to be the are built into pilot studies already in the design stage. These
magic bullet that lifts most poor households out of poverty should
on include experimentation with different sets of inclu-
sion criteria, methods for determining eligibility and, most
a self-sustaining basis, although it will be helpful as at least
part of the cash is often invested by the recipients (Hanlon important, making possible randomised experiments in order
to allow strict evaluation and monitoring of outcomes, and
et al 2010). The only solution to the long-term poverty problem
is that the labour productivity of the working poor increases.both intended and non-intended responses by recipients.23
Illiterate and poor people have a high workforce participationWithout such in-built research features, allowing convincing
inferences
rate (Table 8), but are poor because they earn very little, and about causality, it will be difficult to evaluate
they earn little because their productivity is very low, givenwhether cts will be the superior method for alleviating pov-
levels of human capital and command of other factors of pro- erty and malnutrition in India in the medium-term - without
duction (land, capital and technology). This is a long-term compromising long-term growth - that the present author is
enigma beyond the scope of the present study. inclined to expect.

notes 5 Khera (2011a) argues that the NSS consumption Brazil, would not work in many parts of India
estimates should be considered "upper-bound" as schools and health clinics are lacking, or are
1 The
estimates as the recall method used tends to
dec
of such dubious quality that it would be mean-
than the
lead to underestimation. On the other hand, to ingless for parents to take the children there
(2008) has
the extent that underweighing and adultera- (Vyasulu 2010). However, several Indian states
used to est
tion of grains in the FPS takes place, consump- already have such schemes, albeit on modest
(especially
tion is overestimated. Moreover, the off-takes scales (UNDP 2009).
price infl
from the FCI do not include the additional off- 13 The WPI for primary food articles increased by
05. Apply
takes by state governments. The net effect on 15.8% in 2010-11 and by a further 9.1% in the
that real a
leakage is thus uncertain. first quarter of 2011-12 (Mohanty 2011).
the pover
was 6 A regularly updated list of media
30.6% reports on
14 According to calculations made by Drèze and
scams related to the TPDS can be found on Khera (2010), 80% of all households (in rural
also that t
er (last
thanaccessed 12 January 2012): http://www. areas) would meet at least one 8.5 of their five in-
karmayog.org/publicdistributionsystem/ clusion criteria and hence qualify for purchasing
2 The Pla
the 7 There are huge differences TPDS in leakages acrosssubsidised grains in their proposed quasi-uni-
the Indian states, (see Himanshu and Sen 2011 versal PDS.
holding B
and Khera 2011a for details). 15 In an accompanying paper (Svedberg 2010)
2004-05. T
mate 8 Re-estimating the "total consumption ,prese or pur- the effects on poverty will be estimated in
the chases, by all households of TPDS grains, using more detail, but the completion of that paper
averag
without the NSSO statistical data set used by the Plan- has to await the publication of the BP detailed re-
3 The ning Commission, I arrived at a somewhatsults from the fin NSS survey of the public distri-
could smaller number on "total consumption" (12.17 bution be system and other sources of householdt
who have been issued BPL or AAY cards are versus 13.53 million tonnes). The discrepancy is consumption, 2009-10.
even poorer than those lacking these cards. It probably due to the fact that the Planning Com- 16 There is a wealth of experiences from 45 deve-
may also be that the cardholders cut down on mission calculated purchases by states and loping countries that have CT schemes, but
cereal purchases and use the income transfer then aggregated to the all-India level, while I used different methods for determining eligi-
embedded in the subsidised grains to buy more used the already aggregated data reported inbility criteria (Hanlon et al 2010).
the NSS (2007). 17 See, especially, the compilation conducted by a
other food items. Further study on the basis of
unit-root data may resolve the puzzle. It is in-9 The correlation coefficient between monthlyLancet team, published as a web appendix to
teresting though that a sample study of 400 consumption and income is low in most speci- Bhutta et al (2008); also see Coady et al (2004)
households in Rajasthan came to the same con- fications applied by Townsend (1995) - around and Behrman et al (2004).
clusion (Khera 2008). 0.14.
18 Food coupons (or stamps) have been suggested
4 The TPDS has been claimed before to be a very 10 For transparency reasons it is important to keep as an alternative method /or supporting the
costly way of transferring incomes to the poor the inclusion criteria small. One may consider poor and tilting their consumption towards
(Planning Commission 2008, Kapur et al 2008, adding a few inclusion criteria, such as house- essential goods, such as food (e g, Basu 2011).
Nilekani 2009, Panagariya 2008). On the basis holds headed by single women, an old, or a dis- This argument also disregards fungibility. The
of official data for 2000-01, Panagariya claims abled person. There are, however, already average household in the lowest MPCE decile
that the operational costs eat up 96.3% of the small but reasonably well-functioning pro- spends about two-thirds of its expenditure on
budget and that only 3.7% ends up as an in- grammes aimed at these groups (Dutta et al .food and about 30% on cereals (weighted
come transfer to the poor. A check of what 2010). To the extent that these are flawed and/ rural-urban) (NSS 2006b). These households
Panagariya calls his "back-of-the-envelope" es- or have an insufficient coverage, improving and already consume about the same quantities of
timate suggests a calculation error. He asserts extending them seem more straight forward cereals, 0.34 kg/person/day, as the average
that the subsidy (in 2001) was Rs 415 per tonne, than including them in a CT scheme; all-India household, 0.3 7 kg/person/day
which is incorrect. The Rs 415 subsidy was per 11 These three criteria (or very similar onés) are (Svedberg 2011, Table 1). Food coupons, allow-
quintal (ioo kg) of grains, not tonnes. Correct- found in most suggestions for new BPL guide- ing them to purchase cereals (or items from a
ing for this misunderstanding would mean the lines, including the 2011 official ones. Howev- specified list) at little or no cost would not in-
share accruing as income support for the poor er, these guidelines all also add a host of addi- duce them to consume much additional grain.
households should be 10 times higher, i e, 37% tional exclusion and inclusion criteria. They would rather cut down on their other pur-
(according to Panagariya's own estimation 12 To condition the CT to children's school attend- chases of grain by about the same quantityas
model). ance and medical check-ups, as in Mexico and the coupons provide them at lower cost. The

Economic & Political weekly шш February 18, 2012 vol xlvii no 7 6l

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money thus freed can then be used for any pur- Drèze; Jean and Reetika Khera (2010): "The BPL - (2007): Public Distribution System and Other
pose, be it more quality food items or alcohol. Census and a Possible Alternative", Economic & Sources of Household Consumption 2004-05,
As there are practically no transaction costs Political Weekly, 45(9): 54-63. Report No 510, Ministry of Statistics and Pro-
involved in adjusting, the consumption basket, Duflo, Esther (2000): "Child Health Care and gramme Implementation, GOI, New Delhi.
there is little difference between providing Household Resources in South Africa: Evi-- (2010a): Household Consumer Expenditure in
support in the form of subsidised food, cash or dence from an Old Age Pension Program", India, 2007-08. Report No 530, Ministry of
food coupons, when it comes to influencing the American Economic Review, 90(2): 393-98. Statistics and Programme Implementation,
end use of the support.
Dutta, В and В Ramaswami (2001): "Targeting andGOI, New Delhi.
19 This data was obtained from: http://www.sa- Efficiency in the Public Distribution System:- (2010b): Migration in India 2007-08, Report
faricom.co.ke/ For more on M-Pesa, see Jack Case of Andhra Pradesh and Maharashtra", No 533, Ministry of Statistics and Programme
and Suri (2010).
Economic & Political Weekly, 36(18): 1524-32. Implementation, GOI, New Delhi.
20 Last accessed 16 January 2012: http://www. Dutta, Puja, Stephen Howes and Rinku Murgai - (2011): Level and Pattern of Consumer Expendi-
alittleworld.com/htmls/alw/ALW_ad_3million_
(2010): "Small but Effective: India's Targetedture 2009-2010, Report No 538, Ministry of
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itu.int/en/Pages/default.aspx
Nilekani, Nandan (2009): Imagining India (New
Hanlon, Joseph, Armando Barrientos and David
22 The mobile network coverage is still not com-
Hulme (2010): Just Give Money to the Poor: The York: Penguin Press).
plete in India and the most remote areas will
Development Revolution from the Global South
Panagariya, Arvind (2008): India : The Emerging
probably not be covered for many years to
(Sterling: Kumarian Press). Giant (Oxford: Oxford University Press).
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Himanshu and Abhijit Sen (2011): "Why Not a Parikh,
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et al 2010) show that most of the empirical
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randomised experiments, Duflo (2000) and - (1994): "Public Distribution of Food in India: A Planning Commission, GOI, New Delhi.
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62 PEBRUARY 18, 2012 vol XLVii no 7 ШШ Economic & Political WEEKLY

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How Market-Oriented Is United States' Farm Policy?

CSC SEKHAR, YOGESH CHANDRA BHATT

Farm policy in the United States has crucial implications


for world agricultural markets as the us is a major agricultural products. It commands a large share in
The agricultural thetheUnited
world export
world States
marketexport
for several
products.
important
(us) market
com-is It the commands for world's several largest a important large exporter share com- in of
producer and exporter of many agricultural
modities such as wheat (25%), rice (12%), corn (70%) and
commodities. This study analyses the economic effects
cotton (40%) during recent years. The us is the largest
of various farm programmes, as enacted in variousexporter
Farm of soybean and third largest exporter of soybean oil.
Acts. The analysis shows that most of the domesticIt isfarm
also the world's leading supplier of food aid for
humanitarian relief and economic development, contributing
programmes are geared towards affecting production,
almost 60% of total global food aid in the decade up to 2005.
directly or indirectly. These include the totally coupled
Therefore, us policies have large implications for inter-
national
programmes like the non-recourse loan programme, markets.

partially coupled programmes like the production Beginning in the mid-1980s and continuing through the
2000S, a series of changes occurred in us farm policy. These
flexibility contract payments, and largely decoupled
changes, implemented through the us Farm Acts, mainly aimed
payments like the direct payments and counter-cyclical
at moving agriculture from the highly managed sector of the
payments. The coupled programmes have the early 1980s to one with greater market orientation, particularly
maximum market-distorting effect because theywith are regard to programmes affecting farmers' production
decisions. In this paper we attempt to assess the degree of
linked to current production. Decoupled programmes
success achieved in realising this objective. Specifically, we
like ccps reduce revenue variability and the risk faced by to analyse the effect of important farm programmes
attempt
the farmers. The combined effect of these programmes
in attaining increased market orientation. This issue assumes
renewed importance as a new us Farm Bill is on the anvil. As
is to insulate the us farmer from the market to a large
us policy has strong implications for the world market, it is
extent and stabilise his returns from farming. In addition,
important to make a systematic analysis of this issue. The
there are commodity-specific programmes like the issue is also important in view of the impasse in the negotia-
peanut programme, sugar and sweetener policy, tions etc, of the World Trade Organisation (wto) over the ques-
which perhaps make the us farm sector one of the mostof domestic subsidies in developed countries vis-à-vis the
tion
market access in developing countries. The paper is organised
supported farm sectors in the world. This high level of
as follows. In Section 1, a brief account of the important farm
domestic support has implications for production and
programmes is given. Section 2 analyses the economic effects
of these farm programmes. Section 3 illustrates the market-
export surpluses, and in turn, for the world markets.
alienating effects of us farm programmes and provides
the conclusions.

1 Major Farm Programmes in the US


The Farm Act is the principal way in which the us Federal gov-
ernment supports domestic agriculture.1 Following the policy
effects of the early 1980s, that supported market prices and led
to large stocks of grains, the Farm Act in 1985 introduced vari-
ous measures that included lowering of commodity loan rates
and target prices and introducing marketing loans. However,
cultivation was restricted to a few programmes which encour-
Very efficient research assistance by Santosh Kumar Dash and help
agedfrom
farmers to cultivate specific crops.
Sudhakar Gummula and Yogesh Bhatt is gratefully acknowledged.
The Farm Act in 1990 furthered the move towards market
CSC Sekhar ( csekhar@iegindia.org ) and Yogesh Chandra Bhattorientation by introducing cropping flexibility in a part of
( bhatt.yogesh@gmail.com ) are with the Institute of Economic Growth,
farmers' cropped area. The 1996 Farm Act terminated acre-
University of Delhi Enclave, Delhi.
age restriction programmes and target-price-based deficiency

Economic & Political weekly E33Q February 18, 2012 vol xlvii no 7 63

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SPECIAL ARTICLE =EEE

1 .2.1 Deficiency Payments/Direct


payments and Payments in
(Young Underand
this programme, a fixed payment, which is the product
West
greaterof a fixed payment rate (fixed by the government) multiplied
freedom
based on mark
by the historical production of the crop, is directly made to the
Acts farmer. Some crops are notified as eligible for these, payments
further ext
Farm Act. The
and the payment rates are fixed for each crop in the Farm Act. 2
paymentsThe farmer is required to select some base acreage and base
(ccp) t
The 2008
yield from the past onAct int
the basis of which the base production
electionof the crop is calculated. The payments are made based on the-
(acre)
as yieldfollowing formula. risk. T
programme are
Payment for the Crop = (Programme Payment Rate for the Crop
made on the bas
* Base Production of the Crop).
clear attempt in
(Note: * mark is to indicate that the payment for the crop is
more market-oriented.
a product of the Programme Payment Rate for the Crop and
The programmes for agricultural commodities, which are
Base Production of the Crop.)
the main focus of the present study, can be broadly classified
into five categories. The payments made under this category are illustrated in
(1) Production/supply management programmes (acreage re- Figure 1 (p 65). The degree of coupling with current produc-
duction programmes or arp). tion depends on the way the different parameters on the right
(2) Income-support programmes (deficiency payments, direct hand side of the formula are fixed. When the programme ben-
payments, ccps, etc). efits are available for the current production of the crop, there
(3) Price support and commodity storage programmes (non- is distortion of production choices of the farmer. On the other
recourse loans, farmer operated reserve programmes). hand, when historical production in some distant past is con-
(4) Export and food-aid programmes. sidered, it has relatively less effect on marginal production.
(5) Commodity-specific policies. Initially, payments were made totally on the basis of current
A summary of the major programmes is presented in tabular production. Partial flexibility in planting was allowed in the
form in the Appendix (pp 71-72). Here, we discuss in detail the 1990 Act by introducing production flexibility contract (pfc)
first three important categories of programmes. payments, but payments were still tied to current production
on 75 % of the land and this affected the production choices of
1.1 Production/Supply Management Programmes the farmer. The 1996 Act attempted to address this issue by
Acreage was the major component of supply management.increasing production flexibility to 100% of cropped area, but
Various acreage limitation programmes were employed in anthe payment rate still remained linked to current production.
effort to influence production, support farm incomes by rais-This was corrected in the 2002 Act. In the 2002 Act, fixed di-
rect payments replaced the pfc payments. The Farm Act of
ing domestic prices and limit government costs. Some of
these programmes were the arp, paid land diversions (plds)2008 largely continued these provisions. Therefore, support
and voluntary o, 50/85-92 programmes. In addition, the long-under these programme varied over time from deficiency pay-
term conservation reserve programme (crp) affected acreage ments (highly coupled to production) to pfc payments that are
available for production, arps began in the early 1980s. If relatively less coupled to direct payments (largely decoupled
supplies were estimated by the us Department of Agriculture from current production).
(usda) to be excessive, arps were required and plds were Some of the economic implications of income support pro-
permitted. To be eligible for programme benefits, farmers grammes are as follows: initially in the 1990 Act, the planting
flexibility
were required to idle a crop-specific percentage of their acre- was only partial and the pfc payments were more in
age base, as specified by the arp. No payments were made for the nature of deficiency payments. Therefore, the programme
idled arp land. The 1996 Farm Act eliminated these supply did have a definite effect on marginal production choices of
control programmes, and decoupled planting decisions from the farmer. In the 1996 Act, there was a near complete plant-
programme parameters. ing flexibility but the payment rate was still based on current
production. In that sense, the pfc payments were partially
1 .2 Income Support Programmes linked to the prevailing market conditions. However, with
Income support and supply management programmes wereprogress to direct payments in 2002, the programme can be
said to have been totally decoupled from current production.
important in affecting land use in the us from 1974 to 1995-
Supply management policies aimed at increasing farmers' in-Fixed direct payments are no more tied to production of spe-
come through limiting supply and thereby raising prices. On cific crops, the amount of production or the price of the crop.
the other hand, income support programmes provided incen- With planting flexibility, farmers are not confined to produc-
tives to increase acreage and were offsetting the effects of theing crops for which they are receiving direct payments. They
former. There are mainly two types of income support pro-can receive payment for wheat, but in any given year plant
grammes - deficiency/direct payments and ccps. soybeans in the area in which they are receiving wheat payments.

64 FEBRUARY 18, 2012 vol XLVii no 7 ВИЗ Economic & Political weekly

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= SPECIAL ARTICLE

Figure 1: Fixed Income Pa

Source: Economic Research

Thus, the current cycle of prices. Lower is the marketplan


farmers' price, higher
prices are the payments under
and the programme. To receive payments
variable
tant on crops covered by needs
point the ccp programme, a producer enters t
effect ofinto annual agreements for crop years. Payments arepay
direct based on
land historical production and are Direct
values. not tied to current production.
and At enrolment, producers must select
facilitate base acres and base pay-
additi
farmer'sment riskyield. The payment amount is equal
aversto the product of the
higher payment rate, the payment acres
crop (85% of base acres), and the
produ
of payment yield. The payments
updating made under this programmesp
base
since neware illustrated in crops
Figure 2 (p 66). h
could be ccps
an support and stabilise farm income when market
incenti
and/or prices are below expand
to the target prices. Some of the economic
tion implications of ccps are the following.
history in Since ccpsant
are based
payment on current market prices, producers may view the payments
acres;
as a risk-reducing income hedge. In addition, updating acre-
1.2.2 Counter-Cy
age base and updating payment yields reduces production
The ccp efficiency
was because producers may not fully respond to market
introd
gramme,signals,
a but instead, the response is to market prices plus p
target
price expected benefits
falls of future programmes and future pro-th
below
the gramme changes. The
target current basis for the fccp benefits
price (n
price may affect producers' expectations of how future benefitst
constitutes
might be disbursed.
multiplied by Payments that are linked to past produc- h
the
is the tion may lead to expectations
total ccp that benefits in future will
pay
be linked to current production. Such expectations could
ccp Payment for t
affect current production decisions. For example, farmers
Base Production of
may not fully use planting flexibility to move from currently
where uneconomic crops.
ccp Farmers would then have incentives to
payment
Market build a planting history for(or
Price crops covered underloan
the pro-
This gramme rather than responding to market signals. Similarly,
programme w
counter-cyclical sa
the use of inputs that affect current yields may be influenced,
assistance paymen
if farmers expect future farm legislation to permit an updat-
feature ing of payment yields.
of this pro

Economic & Political weekly 0359 February 18, 2012 vol xlvii no 7 65

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Figure 2: Counter-Cyclical Income Payments ('ООО dollar)

1.2.3 ACRE Programme along with the accrued interest is higher than the prevailing
This is a new programme introduced in the 2008 Farm Act andmarket price, it makes economic sense to default on loan payment.
The gains thus accrued to the farmer constitute "marketing loan
it is mainly a revenue protection one. This programme reduces
both yield risk and price risk, unlike ccps which reduce only gains"
the (mlg). As a result of this programme, when the loan
price risk. Payments under the programme are available when rates were relatively high during the late 1970s to mid-1980s,
the state revenue and the farm revenue are both less than some
there were high default rates that pushed the government-held
stocks to very high levels. To cut the administrative costs and
benchmark level. Crops covered are wheat, corn, grain sorghum,
storage costs, a new kind of payment system was introduced.
barley, oats, upland cotton, rice, soybeans, other oilseeds, peanuts,
dry peas, lentils, small chickpeas, and large chickpeas. It is Under
an this, the farmers are not required to place the crop as col-
extension of the ccp programme in the sense that it seekslateralto in order to get the loan. If the market price falls below the
loan rate, the farmer can dispose of the produce in the market and
offset the revenue variability arising out of both farm yield and
market price. Beginning with the 2009 crop year, producers the difference between the loan rate and market price is paid to
the farmer as ťíloan deficiency payments" (ldps). Figure 3 (p 67)
could sign up for this optional, revenue-based counter-cyclical
programme which is an alternative to receiving ccps. Since provides
the the pattern of payments under this programme.
Some of the broad economic implications of these programmes
acre programme offsets the total revenue variability arising out
are as follows. The effects on marginal production are two-
of either price or yield fluctuations, it helps in reducing farmers'
risk-aversion, leading to an indirect increase in production. fold. First, because the loan benefits are extended only to crops
currently produced, the crops receiving higher payments get
1 .3 Price Support Programmes: preference in farmers' current production decisions. The second
Non-Recourse Loan Programme effect arises because of the link between loan rates and market
Non-recourse loan programme is the most important price prices. When commodity prices are below commodity loan
support programme in the us. The main feature is that the pay- rates, loan benefits augment market receipts. When prices are
ments are directly linked to current production. Producers receive low, marketing loans create incentives to produce specific crops
a loan from the government at a designated loan rate by pledg- for which loan provisions exist. Cross-commodity effects of a
ing grain production as collateral. Upon harvest, the farmer cansupply response to relative returns (which includes marketing
get a loan on all or part of his newly harvested crop. The farmerloan benefits) result in acreage shifts among competing crops.
is required to keep the collateral in approved storage bin on his
farm. The farmer is free to repay the loan at any time during the 2 Economic Effects of the Programmes
length of the loan period, which is normally nine months. He also The economic effects of important farm programmes have been
has the option to default on loan payment in which case the col- briefly discussed in the previous section. However, in view of the
lateral is forfeited and deposited with the commodity credit corpo-far-reaching impact of these programmes on crop production,
ration (ccc). At the end of the loan period, if the loan amountwe undertake a detailed analysis of these effects here.
66 February 18, 2012 vol XLVii no 7 B3S3 Economic & Political weekly

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Figure 3: Price Support Programmes Payments ('000 dollar)

Different types of government payments and other farm reflect changes in the market equilibrium following the
programmes influence production decisions of the farmers changes in production.
and agricultural markets in different ways. Loan deficiency
payments, for example, affect production decisions and 2.1 Coupled Programmes
market outcomes differently than an equal amount of pfc pay- Coupled programmes that are closely linked to production of
ments. This variation in effects among different programmes specific crops distort the mix of crops planted and may also af-
is related to how closely programme benefits are linked to fect total land use. Benefits that are linked to production of
farmers' behaviour and market outcomes. specific crops increase expected returns to these crops. Increase
Farm programmes are coupled if there is a direct link in production of programme crops translates into additional
between the determination of the programme benefit and thebenefits which, in turn, provide further incentives to farmers
farmer's production decisions and market conditions (such asto expand output of these crops. As a result, production decisions
prices). In turn, the benefits of coupled programmes affect per- for those commodities are based not only on expected returns
unit net returns associated with specific production choices.from the marketplace, but also government payments. Cross-
Therefore, coupled programmes have the greatest potential to commodity effects also occur because changes in expected re-
affect agricultural production and agricultural markets. In turns for one crop affect relative net returns among cropping
contrast, decoupled payments are fixed income transfers that alternatives. Some farmers are likely to respond to a coupled
do not depend on the farmer's production decisions, outputpayment by increasing the total planted area and/or shifting
levels, or market conditions. Decoupled programme benefitsthe mix of crops towards those with higher coupled payments.
do not subsidise production activities, inputs, or practices. Out of all the programmes, the non-recourse loan programme
These income transfers do not change per unit net returns at influences the production decisions of a farmer to the maximum
the margin. Thus, they have little direct effect on productionextent because the benefits of the programme are directly
decisions or marginal production of specific commodities. linked to current production. When prices are relatively low,
However, because decoupled payments raise the overall marketing loan gains supplement returns from the market,
economic well-being of farm households, indirect influencesthereby raising the incentive price of the farmer. Annual effects
on agricultural production are possible through wealth and of marketing loans vary by year, depending on the absolute
other effects. Overall, the effects of decoupled payments onand relative magnitudes of the expected crop-specific market-
production are likely to be small in the aggregate. In the fol- ing loan benefits. For example, with marketing loan benefits
lowing part, we focus upon production incentives and supplyranging from around $5 billion to over $8 billion in 1999-2001,
response of coupled and decoupled farm programmes becausetotal acreage planted under eight major programme crops
other outcomes such as prices, domestic use, and exports increased by an estimated two to four million acres annually
Economic & Political weekly DDB3 February 18, 2012 vol xlvii no 7 67

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in those years (Westcott and Price 2001). Acreage shifts across capital can lead to an increase in the overall size of current
crops reflect expected relative benefits among cropping alter- operations and can raise the level of investment on the farm,
natives. In some situations, marketing loan benefits can result both of which would increase farm output. Overall, the in-
in larger effects on individual crops than in the aggregate. creased investment facilitated by direct payments, raises farm
Studies show that the marketing loan programme not only sector equity and wealth providing a secondary avenue to
affects production efficiency adversely, but also the marketing wealth effects on production.
efficiency (Saak 2003). The second wealth effect of direct payments on production
Other coupled programmes like crop insurance, change the operates by modifying the farmer's perception of risk. If pay-
distribution of expected income when yields are low. The us ments raise producers' wealth and lower their risk aversion,
subsidies for crop insurance premiums are proportional to the they may take on more risk in their production choices. This may
premium. Since premiums are higher for crops that are riskier entail in an increase in overall production and may also change
to insure, premium subsidies are higher for riskier crops, the production mix, perhaps making cultivation of riskier
which encourage production of riskier crops and production in crops with higher mean (but more variable) expected returns
riskier regions. Young et al (2001) report that government crop possible. Chavas and Holt (1990: 529-38) found evidence of de-
insurance subsidies of about $1.5 billion a year would add clining absolute risk aversion with higher wealth, implied by
about 9,60,000 acres (about 0.4%) to annual production of positive wealth effects on the plantings of corn and soybeans.
eight major field crops, with plantings of wheat and cotton
expanding the most. 2.2.2 Counter-Cyclical Payments
ccps are essentially decoupled from the farmer's cropping
2.2 Decoupled Programmes2 decisions since they are paid on a constant, predetermined
In contrast to coupled programmes, direct payments (dp) and
output (equal to 85% of a fixed acreage base times a fixed ccp
ccps are essentially decoupled from current production aspayment yield) and are not affected by farmer's current pro-
they are paid regardless of whether the programme crop is duction. Therefore, the ccps do not affect marginal revenues.
currently produced or not. As these payments are made on The expected marginal revenue of a farmer's additional output
considerations of historical acreage and historical yield, cur-
is the expected market price (augmented by marketing loan
rent acreage decisions of planting and input use are not af- benefits when prices are lower than loan rates). Hence, ccps
fected at the margin by these payments. Therefore, producer- do not affect production directly through expected net returns
(Westcott et al 2002).
incentive price at the margin (for current production) is guided
by the movements of relative prices in marketplace. However, these payments may influence production by
reducing revenue variability and risk. Since these payments
2.2.1 Direct Payments are linked to market prices, they may influence production
Direct payments are largely decoupled since programme benefitsdecisions indirectly by reducing the total and per unit revenue
do not depend on farmer's production choices or market condi- risk associated with price variability. For example, when the
tions, and payments do not affect per unit returns. However,market price of a programme crop decreases in the range from
since direct payments are tied to acreage, these benefits are the target price (net of the direct payment rate) to the loan
capitalised into farmland values, thereby increasing aggregaterate, changes in producer revenues arising out of these
producer wealth. Producer wealth, in turn, affects production
changes in market prices are partly neutralised by the counter-
decisions through investment effect and reduction in risk-
cyclical payments. This reduces the revenue risk for the farmer
averseness (Westcott et al 2002; Westcott and Young 2004). associated with price variability.
As for the wealth-induced investment effects, there is a direct Without the ccps, the distribution of market price and that
effect on account of higher liquidity and an indirect effect dueof the expected revenue per unit production are the same.
to relaxation of credit constraint. Higher liquidity and higherHowever, with ccps, the expected revenue distribution is
net worth resulting from direct payments can facilitate addi- much narrower than that of market price, owing to the price-
tional agricultural production through the increases in agri- offsetting nature of the ccps (Westcott et al 2002). For a risk-
cultural investment. This is also true for farmers who other-averse farmer, reducing the variability of expected revenues is
wise face credit constraints or limited liquidity. Agricultural
of prime concern. Thus, the production choice may be skewed
investment can also rise because of increased "creditworthi- in favour of programme crops receiving ccp payments. This
ness" of the farmers due to lowering of risk of default. Greater revenue stabilisation consideration supplements the profit
credit availability facilitates additional investments. Addition- maximisation objectives that normally underlie the produc-
ally, the reduced risk of default can lead to lower interest rates tion decisions. The resulting crop-mix and equilibrium level of
facilitating an increase in investment. For some farmers, in- production reflect the joint consideration of profit maximisa-
creased liquidity provided by the payments may also reduce tion and revenue stabilisation concerns. Also, since the ccps
the need for obtaining loans for short-term operations or for reduce overall revenue risk, a risk-averse farmer may shift
longer term investments. Although there is opportunity costs some land to riskier crops that provide expected returns with
associated with self-financing, those opportunity costs would higher mean, but also higher variability. Again, the chosen
be lower than commercial cost of credit. This lower cost of production mix would be based on the jointly considered
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factors of profit maximisation and revenue risk reduction. Since programmes analysed here. Let us illustrate the combined
ccps provide a revenue risk reduction instrument, the farmer effect of these programmes with an example.
may reduce the use of alternative risk management strategies. For the sake of simplicity we assume that the same crop reg-
The exact magnitude of these various effects discussed here istered under direct payments and ccp programmes is also
is an empirical issue. Although expected net returns may re- cultivated under the marketing loan programme. First, a
main a dominant consideration, revenue risk reduction pro- direct payment "dp" is made. If the market price plus the dp is
vided by ccps will be important for risk-averse producers. below the target price of the crop, the difference is paid as ccp
payment. Since this is a deficiency payment, this payment will
2.2.3 Updating Base Acreage and Payment Yields continue to increase as the market price falls reaching its
Updating the base acreage and payment yield may influence maximum when the market price equals the loan rate. If the
current production choices if farmers expect future legislation market price falls further below the loan rate, the ccp will not
to allow them again to update these programme parameters increase, but the marketing loan gains come into picture.
for their farms. For example, farmers may not fully use plant- (1) Direct Payments (dp): Fixed payment based on historical
ing flexibility to move from historically planted and supported production and a fixed payment rate dpr.
crops if they expect future farm programmes to permit an dp=dpr X Historical production
updating of their base acreage. Instead, farmers would have (2) Counter-Cyclical Payments (ccp): These payments are
incentives to build and maintain a planting history for pro- made whenever effective price (which is equal to direct pay-
gramme crops to use for possible future base acreage updat- ment rate plus higher of farm/market price, loan rate) falls
ing, thereby constraining their response to market signals. below target price (set by usda).
Similarly, the use of non-land inputs that affect current yields Counter-cyclical payment rate (ccp) = ccpr x Historical
may be influenced if farmers expect that future farm legisla- production
tion will permit updating of payment yields. Such updates may where
also reduce incentives to grow lower yielding varieties of pro- Counter-cyclical payment rate (ccpr) = Target price (tp) - di-
gramme crops that have other marketable characteristics. Al- rect payment rate (dpr) - Max {farm/market price (mp), loan
lowing acreage bases and payment yields to be updated can rate (lr)}
reduce economic efficiency in production since farmers may Here market price (mp) is variable, whereas tp and dpr are
not fully respond to signals from the marketplace, but instead, constant for a reference year
respond to market prices plus the expected benefits of future a. If mp > lr and >= (tp-dpr), then ccpr = о
programmes and programme changes. b. If mp > lr but < (tp-dpr), then ccpr > о
To sum up, most of the support programmes in the us are And ccpr approaches its maximum value when mp = lr
geared towards affecting production, directly or indirectly and remains constant thereafter.
(Young and Westcott 2000; McDonald and Sumner 2003). The c. If mp < lr, then mlg/ldp starts while dpr and ccpr remain
programmes have the potential to distort supply response to a constant at their respective maximum values.
considerable degree. Coupled programmes (the marketing loan (3) Marketing Loan Gains (mlg) or Loan Deficiency Payments
programme) have the highest potential to distort the market (ldp):
due to their link with current production. The direct payments, If mp<lr, mlg/ldp = (lr-mp) x current production
although in principle are not linked to marginal production, Figure 4: Economic Effects of Farm Programmes
have wealth effects. They increase investment, reduce risk
aversion and relax credit constraints of the farmer. Finally pro-
grammes like ccps and acre payments, supposedly decoupled
from current production, reduce the revenue variability of the
farmers and thereby farmers' risk. The combined effect of all
these programmes is to insulate the us farmer from the market
to a large extent and to stabilise his returns from farming.

3 Market-Alienating Effect of Farm Programmes


on the Farmer

The us farm policy has been moving towards increasing market


orientation with the introduction of programmes that have
Price
reduced the degree of coupling of benefits to production. This
trend reflects the related policy goals of reducing market
As can be seen from Figure 4, ccps become effective as soon
as the
distortions and fulfilling commitments to international market price falls below the target price (tp) less the
trade
direct payment
agreements. In this section, we attempt to analyse the success of rate (dpr). The quantum of ccp payments
increases
this policy framework considering the net effect of all the majorwith the decline in market price until the market
price reaches the loan rate. Thereafter, the ccps are constant.
programmes taken together. Direct payments, counter-cyclical
payments and marketing loan programmes are theFrom
major
this point, the marketing loan gains (for farmers who

Economic & Political weekly ШШ February 18, 2012 vol xlvii no 7 69

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Table 1 : Support Received through Farm Programmes by the US Farmer - An Illustration

MP At Yt A0 Y0 TP DPR LR DP CCP MLG Total Market Target Shortfall in Total Payments as Total Total Receipts
Payments Receipts Income Target Income % of Shortfall in Receipts as%of
Target Income Target Income
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

35 100 150 100 100 50 5 25 50,000 1,00,000

32 100 150 100 100 50 5 25 50,000 1,30,000

29 100 150 100 100 50 5 25 50,000 1,60,000

26 100 150 100 100 50 5 25 50,000 1,90,000

23 100 150 100 100 50 5 25 50,000 2,00,000 30,000 2,80,000 3,45,000 7,50,000 4,05,000 69 6,25,000 83
20 100 150 100 100 50 5 25 50,000 2,00,000 75,000 3,25,000 3,00,000 7,50,000 4,50,000 72 6,25,000 83
17 100 150 100 100 50 5 25 50,000 2,00,000 1,20,000 3,70,000 2,55,000 7,50,000 4,95,000 75 6,25,000 83

14 100 150 100 100 50 5 25 50,000 2,00,000 1,65,000 4,15,000 2,10,000 7,50,000 5,40,000

11 100 150 100 100 50 5 25 50,000 2,00,000 2,10,000 4,60,000 1,65,000 7,50,000 5,85,000 79 6,25,000 83
8 100 150 100 100 50 5 25 50,000 2,00,000 2,55,000 5,05,000 1,20,000 7,50,000 6,30,000 80 6,25,000 83
5 100 150 100 100 50 5 25 50,000 2,00,000 3,00,000 5,50,000 75,000 7,50,000 6,75,000

2 100 150 100 100 50 5 25 50,000 2,00,000 3,45,000 5,95,000 30,000 7,50,000 7,20,000

Yt = Presently cropped area (ha) and yield (tonne/ha); A0, Y0= Historical area (ha) and yield (t
payments received ($) = DPR*A0*Y0, DPR = Direct Payment Rate ($/tonne), LR = Loan Rate fixe
MLG = Marketing Loan Gains ($) = (LR-MP)*At*Yt , Total Payments from the government ($) =
($)=TP*At*Y.
Source: Author's calculations.

forfeit their crop to ccc) and loan deficiency payments (to subsection. The extent of support also shows that the
previous
farmers who do not place their crop in ccc stocks) begin
avowedto objective of greater market orientation of farmers in
successive
support the farmer and are the highest when market price falls Farm Acts is not realised.
well below the commodity loan rate. This example assumes
Conclusions
that the original programme crop is also the currently planted
one. Otherwise, ccps and direct payments are based The
on the
study attempts to assess the effect of major farm pro-
original programme crop and the mlg/ldps are paid, based on
grammes in the us on farm production. Direct payments, ccps
the currently produced crop. This will only marginally alter
and marketing loan programmes are the major programmes an-
the implications but it is clear that the farmer's income is alysed
stabi- in the study. Direct payments and ccps are decoupled in
lised over a long range of market price changes. Table i nature,
brings whereas the loan programme and the loan deficiency
out the extent of government support. It can be seenpayments
from are coupled to the current level and pattern of produc-
Table i (col 18) that even when the market prices fall well be-Direct payments are fixed payments unrelated to current
tion.
low the loan rates, the farmers' income is stabilised to the ex-
production or market price, ccps are made on the basis of fixed
tent of 83% of the targeted income. historical production, like the direct payments, but are linked to
Figure 5: Extent of Support under US Farm Programmes the current market prices. The loan programme payments linked
to both the current production and current prices.
The analysis shows that these major farm programmes have
insulated the us farmer from the market to a large extent
and helped to increase and stabilise farmers' revenues. While
coupled programmes like the marketing loan programme have a
direct impact on current production, even the decoupled pro-
grammes have indirect effects on production through wealth-in-
duced-investment and by reducing risk-averse behaviour through
stabilisation of farm revenue. Many major commodities such as
corn, wheat, rice, soybeans and cotton are covered under these
programmes. Increase in production as a result of this domestic
support can lead to increased exports, which can have price-dis-
Source: Author's calculations.
torting effects in the world market (Westcott and Price 2001).
Figure 5 brings out that the government support increases
Therefore, domestic subsidies mainly for major commodities
rapidly as the returns from the market fall because of fallshould
in be reduced and the market orientation of the us farmer
needs to be increased.
the market price. The relative movements of programme pay-
ments vis-à-vis market price and stabilisation of farmers' income
from programme payments should be of interest and not the
notes

absolute magnitudes of the payments per se since Table 1 and 1 Although gener
different years
Figure 5 are based on a hypothetical example. This stabilisation of 1990, National
of farmers' income, which also implies their insulation from www.nationalag
Reform Act of 1
the market, results in increases in production discussed in the kansas; Farm S

70 FEBRUARY 18, 2012 vol XLVii no 7 ВШИ Economic 8c Political WEEKLY

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Agricultural Law Centre, University of Arkansas; - (1996): Federal Agriculture Improvement and Price (2002): The 2002 Farm Act: Provisions
Food, Conservation, and Energy Act of 2008, Reform Act of 1996 (Important Provisions). and Implications for Commodity Markets, Agri-
National Agricultural Law Centre, University - (2002): Farm Security and Rural Investment Act cultural Information Bulletin Number 778, US
of Arkansas. of 2002 (Important Provisions). Department of Agriculture, Economic Re-
2 For a detailed analysis of decoupled payments - (2008): Food, Conservation, and Energy Act of search Service, November.
see Burfisher and Hopkins (2004). 2008 (Important Provisions). Westcott, Paul С and С Edwin Young (2004): "Farm
McDonald, Jeffrey D and Daniel A Sumner (2003): Programme Effects on Agricultural Production:
"The Influence of Commodity Programme on Coupled and Decoupled Programme" in Mary
REFERENCES Acreage Response to Market Price With an Il- E Burfisher and Jeffrey Hopkins (2004).
lustration concerning Rice Policy in the United Young, С Edwin, Monte LVandeveer and Randall D
Burfisher, Mary E and Jeffrey Hopkins (2004):Journal of Agricultural Eco-
States", American Schnepf (2001): "Production and Price Impacts
Decoupled Farm Payments in a Changing Policy
nomics, Vol 85, No 4, November, pp 857-87. of US Crop Insurance Programme", American
Setting, AER-838, The US Department
Saak, Alexander E of
(2003): "Spatial and Temporal Journal of Agricultural Economics, Vol 83, No 5,
Agriculture, Economic Research Service,
Marketing Considerations under Marketing Loan December, pp 1196-1203.
November.
Programme", American Journal of Agricultural Young, С Edwin and Paul С Westcott (1996): The
Chavas, Jean-Paul and Matthew T Holt (1990): Economics, Vol 85, No 4, November, pp 872-87. 1996 US Farm Act Increases Market Orientation,
"Acreage Decisions Under Risk: The Case of Westcott, Paul С and J Michael Price (2001): Analy- AIB-726, US Department of Agriculture, Eco-
Corn and Soybeans", American Journal of sis of the US Commodity Loan Programme with nomic Research Service, August.
Agricultural Economics, Volume 72, August, Marketing Loan Provisions, AER-801, US De- - (2000): "How Decoupled Is US Agricultural
PP 529-38. partment of Agriculture, Economic Research Support for Major Crops?", American Journal
ERS-USDA (1990): Food, Agriculture, Conservation, Service, April. of Agricultural Economics, Vol 82, No 3, August,
and Trade Act 0/1990 (Important Provisions). Westcott, Paul С, С Edwin Young and J Michael pp 762-67.

Appendix: Major Farm Programmes in US - A Summary


S No Programme Main Features Crops Covered Limitations Economic Implications
I Income Support Programmes
(1) Deficiency/ 1990 Farm Act- Partial flexibility in Rice, wheat, Partial planting flexibility Payments were still tied
direct payments deficiency payments planting on 25% foodgrains corn applicable to crops other to current production on
of the acreage and upland cotton than fruits and vegetables. 75% of the land and this
ARPs restricted acreage that affected the production
could be planted to any choices of the farmer,
single programme crop.
General programme

1996 Farm A
Partial Flexibility in planting but payment uses. Limitation on planting to current production and
Contracts rate still linked to current of fruits and vegetables as in therefore, affected current
production. ARPs 1990 Act. General programme production choices of the

2002 Farm Ac
Direct Paymen
is also fixed
other oils
peanuts base acres. The land must be investment
kept in an agricultural or
conserving use and farmers
must comply with certain
conservation and wetland
provisions. General programme

2008 Farm
Direct Paym
Payment
fixed. Tw
reduction
programme participants. tomatoes grown for processing
on base acres during each

(2) Counter-C
Payments Counter-Cyclical sorghum, barley, oats, above making payments to counter
Payments rice, upland cotton, the production cycle. Payments
soybeans, other oilseeds, linked to past production may
and peanuts lead to expectations that
benefits in the future woul
be linked to the current
production. Such expectat
could thereby affect curre

2008
Count
Payments participate in the new rice, upland cotton,
ACRE programme soybeans, other oilseeds,
peanuts, long-grain rice,
medium grain rice, dry peas,
lentils, small chickpeas

(Continued)

Economic & Political weekly Ш35Э February 18, 2012 vol xlvii no 7 yi

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Appendix: Major Farm Programmes in US - A Summary (continued)
S No

2008 Farm Act- A revenue protection Wheat, corn, grain (i) Available when the state Helps in reducing farmers'
Average Crop programme. Reduces both sorghum, barley, oats, revenue and the farm revenue risk-aversion leading to
Revenue Election yield risk and price risk, upland cotton, rice, are both less than some indirect increase in production.
(ACRE) Programme unlike CCP s which reduce soybeans, other oilseeds, benchmark level. Participants
only the price risk. peanuts, dry peas, lentils, are no longer eligible to receive
small chickpeas, and CCPs. Also, for ACRE farms, direct
large chickpeas payment rate for the farm is
reduced by 20% and marketing

II Price Su
1990 Ac
Loan Programme support programme in US. foodgrains, cotton, rice, programme creates incentives
Farmer gets a loan on other oilseeds and to produce specific crops for
harvest as collateral. Can soybean which loan provisions exist,
forfeit collateral if market Impacts occur mostly in years

1996 Act- Non-Recourse


Loan Programme foodgrains, cotton, rice,
other oilseeds, soybean,
dairy, peanuts, sugar

200
Loan Programme sorghum, barley, oats,
rice, upland cotton, ELS
cotton, soybeans, other
oilseeds, peanuts,
mohair, wool, honey,
small chickpeas, lentils,

2008 Act- Non-R

¿¿gm ¡j^
«gl Plati
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1936 2011 venue; jata institute of Social Sciences, V. N. Purav Marg, Deonar, Mum

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and methods of policy advocacy and intervention.
The Conference comprises keynote lectures, plenaries, parallel sessions, as well as oral presentations
Conference Themes:
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2. Organisation, Work and Innovation 6. Inequalities, Vulnerabilities and Human Health and Well-be
3. State, Governance and Citizenship 7. Transforming Role of Social Institutions in a Global So
4. Community, Identity and Marginalisation 8. Culture, Nation and Change
Speakers:
Mr.Abhyanand, Prof.Amitabh Kundu, Mr.Anish Andheria, Dr.Anu Rammohan, Dr.Bill Pritchard, Prof.Dan Hough, Mr.Debi G
Prof. Errol D'Souza, Prof.Ghanshyam Shah, Prof. Gopal Guru, Prof.Hargopal, Prof. Imogen Taylor, Prof.K.P.Kannan, Ms.Kal
Sharma, Ms.Kanchi Kohli, Prof.Mathew Manimala, Prof.Mohan Rao, Prof.Neharika Vohra, Prof.Noshir Contractor, Dr.Ravi D
Prof.Richard Black, Prof.Saskia Sassen, Dr.Sharachchandra Lele, Dr.Savyasaachi, Ms.Smruti Koppikar, Prof.Solomon Ben
Prof. Sudha Mohan, Prof.Surinder Jodhka, Prof.T Jayaraman, Dr.Thelma Narayan, Ms.Vaishali Patii
Registration Fee:
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Inequalities in Literacy
is important, but before reaching any hard
conclusions, understanding regional dis-

in Jammu and Kashmir parities, processes and developments is


imperative. However, this understand-
ing should not result in regional politics
and polarisation. Any overemphasis of
TANVEER AHMAD DAR, SHUMILA KHAKI regional disparities in socio-economic
and political development could have
Regional disparities in
serious implications literacy
in j&k, where people

levels were Ghulam Nabi Azad-led government


rightly of different regions have voiced feelings
emphasised
In constituted Ghulama Finance
constituted a promising Nabi a Azad-led Finance move in Commission, government 2007, the
Commission, of alienation, in recent years.
the recent Jammu and Kashmir
through the State Finance Commission This article attempts to provide in-
Finance Commission
Act of 2006, to study regional disparities report,
sight into the disparities in educational w
Jammu between
having Kashmir, Jammu and Ladakh achieved
achievement between a
different liter
regions,

rate of and recommend measures for improve-


73% and districts and socio-economic groups
Kashmir only in
ment.1 The commission included a three- the state. More importantly, it seeks to
65%. However, this note argue
member team headed by Mehmood-ur- highlight other serious political forms of
that differences between districts
Rehman, a former home commissioner disparities, which tend to be neglected. At
and education zones, and more of the state (Ali 2010). 2 The background the same time, it explores why inequalities
to this commission was the huge outcry in of any nature exist, and why the j&k
importantly, between different
the state about inter-regional disparities School Education Act 2002 has failed to
socio-economic groups are more
in socio-economic and political develop- achieve its objectives.
real and sizeable. These can be
ment among the three regions.
traced to high dropout rates The constitution of the Finance Com- Inter-regional versus
mission can therefore be seen as a positive Inter-district Disparities
among schoolchildren, owing to
move, if that is, the intention was to pursue Census data on literacy rates suggests an
the numerous direct and indirect
it with commitment and honesty. This urgent need to look more closely at dis-
effects of over two decades Finance Commission was to submit its parities beyond the regional level. In
of conflict. report within a year of its appointment
2001, j&k had only a 55.52% literacy rate,
a 9.3% difference with the Indian level,
but as is the practice with all commissions
and committees in Jammu and Kashmir which stood at 64.84% (Census 2001 data
in Government of j&k 2008-09).3 Recent
(henceforth j&k), the commission was de-
layed. It finally submitted its bulky report,provisional figures from the 2011 Census
consisting of seven volumes and more continue to show this pattern. A 5.3%
difference remains between j&k (68.7%)
than 1,000 pages (Ali 2010), to the chief
minister in November 2010. The report
and India (74%) in literacy rates (Registrar
General and Census Commissioner, India
highlights many important issues but rais-
es more questions than those it answers. 2011). The Finance Commission report
Education was one of the areas that the rightly emphasised a concern with regional
Finance Commission considered in depth.disparities. The Jammu region achieved
Special thanks to Frances Smith for help in
The report made headlines and wasa literacy rate of 73% while Kashmir
editing and Yasir Hamid for his invaluable
suggestions and comments. We are grateful
achieved only 65% (Registrar General
featured on the front pages of a few daily
to Shantha Sinha, Venkat Reddy and Wakar newspapers for several months. The
and Census Commissioner, India 2011).
Amin for encouraging us to write on this issue. impression created by the state media However, more serious than the state
We would also like to thank Harsh Mander, was that there were serious disparities in
and regional disparities are those between
Dipa Sinha, Biraj Patnaik and Ritu Priya for
educational performance in the state, with
districts within regions. For instance, the
their advice and guidance. Thanks are also
due to Vikas Bhaskar, Swapnali Patii and Rafia
Jammu region performing much betterliteracy rate in Bandipora and Budgam
Farooq. The views expressed in this article are
than Kashmir. The dramatic increase in districts is about 58% and in Ramban, it
the authors' own. the number of schools in the Jammu is 57%, compared to 84% in Jammu,
Tanveer Ahmad Dar ( tanveerdar.tanveer@ 80% in Leh and 71% in Srinagar district
region over the last few decades compared
gmail.com) is at the School of Social Sciences, with Kashmir suggested a regional bias (Registrar General and Census Commis-
Jawaharlal Nehru University, Delhi and in educational development. sioner, India 2011). Further disaggrega-
Shumila Khaki is at the department of social tion within districts shows even more
Achieving equitable socio-economic
work, Jamia Millia Islamia, New Delhi.
serious differences. For instance, in
and political development for all regions

Economic & Political weekly E32S3 February 18, 2012 vol xlvii no 7 73

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Kalaroos and Sogam educational zones Doda, it was Rs 15,194, almost 35% less
situation of their families and the political
of the district of Kupwara, the literacy than Jammu and 31% lower than Kathua
situation of the region. That is the reason
rate is only about 2ç%.4 (Government of j&k 2009).5 Notably,why the literacy rate among lower socio-
Why is there a low literacy in Ramban Ramban with the lowest literacy rate ineconomic groups is much lower, an issue
even though Jammu region has a 73% Jammu region was carved out of Dodathat receives very little attention in j&k.
literacy rate? Why do Kalaroos and in 2006. For instance, the literacy rate among the
Sogam educational zones have literacy Budgam and Ramban are relatively scheduled tribe (st) population is just
rates lower than 30%, not even half of rural and hilly districts, whereas Srinagar37.5%, while for the total population, the
the literacy rate in Kashmir? These are and Jammu are the most prominent literacy rate is 55.5% (Census 2001 data
questions that cannot be ignored. cities. Could it be that these poor, far-in Government of India 2005).
Interestingly, simple calculations using off, hilly and economically backward The authors visited a few villages
2011 Census literacy data tell us more districts are given second-class treat-in Bandipora (Acham, Inderkoot and
about issues beyond regional disparities. ment in development activity and ser-Nowgam villages), Kupwara (Zachaldara,
If we just remove two districts - Jammu vice delivery within the state, impactingYemlar and Khanpur villages) and Kulgam
and Samba - from the 10 districts of educational outcomes? (Bonigam and Yarhol villages) districts
Jammu region, the performance of the in Kashmir in May-August 2011 and inter-
Access to Schools
other eight districts is just a little better acted with parents individually and in
than Kashmir. These eight districts Also
of groups, as well as with local teachers,
compelling are regional disparities
Jammu region together have achieved viewed in terms of the number of schools
panchayat members, self-help groups
only a 67% literacy rate, compared functioning
to in the Kashmir, Jammu and
(shgs) and non-governmental organisa-
65% in Kashmir. Where do the actualLadakh regions. The Finance Commis-
tion (ngo) activists. What was clear was
disparities lie then? Just two of these
sion report has shown that the number
that there was high school dropout rates
districts have been able to achieve the of schools in Jammu increased from in most of these villages.
4,953 in 1980 to 8,285 in 2007 (a 67%
highest literacy rates in the state - Jammu The high costs of admission fees, print-
at 84% and Samba at 82%. These two increase). In Ladakh, the number roseing charges, uniforms, school bags, shoes,
were one district (and one of the twofrom 411 to 729 (a 77% increase). Thenotebooks and other stationary through-
biggest cities in the state, the other onecorresponding increase in Kashmir wasout the year and tuition during winter
being Srinagar) until 2006, when Samba far lower, from 4,901 to 6,844 (only 40%)vacations (of two to three months) can be
was carved out into a separate district.(Ali 2011). The increase in the number of difficult for parents to afford. These
Kathua is another better performing dis-schools in Jammu region would certainly amounted to more than Rs 500 per
trict in Jammu region, achieving a 73.5% have been an important factor in achiev-month, on an average, throughout the
literacy rate. In Kashmir region, Srinagar
ing the higher levels of literacy. year for a child in primary and upper
However, the existence of schools isprimary classes, according to the re-
district has a 71% literacy rate, very close
to that of Kathua. This suggests that,not the only factor in ensuring thatspondents we interviewed during May-
though striking, the key issue is not thechildren attend regularly. The schoolsAugust 2011. These are hidden costs not
regional disparity, but is rather inter- available must also be socially and eco-recognised by the state, which claims
district disparity. nomically accessible for all children. Athat it provides free and compulsory ed-
In fact, cities and economically highnumber of other factors play a crucial ucation. If parents cannot afford these
performing districts of the state per-role in determining whether a child will costs, the children drop out.
form well on literacy. When we examine be able to attend and continue his/her In focus group discussions, almost 40
poorer districts, we find that literacystudies. Even at the village level, someto 50 parents in these villages reported
rates are drastically lower. For instance,children attend school regularly but that they had some of their children
according to the latest publicly availabletheir next-door neighbours do not, evengoing to school while the others dropped
figures, the per capita income (pci) forwhen there is a government-run schoolout and were engaged in the carpet
2004-05 in Srinagar was Rs 24,459, theopen to everyone. Children's ability toindustry or other work. Many parents
attend school is not only an outcomeexplained that these children worked to
highest in the Kashmir; pci in Budgam was
Rs 17,250, almost 30% less than Srinagar.of infrastructure but depends on other
pay for the education of the others. These
Together with Bandipore, Budgam is onefactors as well. are not the stories of a few families but
of the districts with the lowest literacy Macro figures show a high dropoutthe saga of thousands of villages and
rates in Kashmir, and Srinagar has oneratio of 53-75% in 2004-05 in the state families, and could explain the high
of the highest. (Government of j&k 2008). This implies dropout rate in the state of about 53.75%
Similarly, severe disparities also exist inthat children have been able to enrol butin 2004-05.
the pci among districts in Jammu region.cease to attend, not because there are no These are the reasons why lower socio-
The pci for the districts with highest lite- schools, but because of other reasons.economic groups such as sts in the state,
racy rates in Jammu region was Rs 23,298The ability of children to attend school isas well as in Kashmir, have lower literacy
(Jammu) and Rs 21,946 (Kathua). But for
directly related to the socio-economic
levels than the general population, and
74 February 18, 2012 vol XLVii no 7 i я uvi Economic & Political weekly

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why the relatively poor districts of Band- adult protection and so on. According to
to work for long hours and paid meagre
ipora, Budgam, Kupwara and Ganderbal wages. A study by Save the Children
a United Nations Children's Fund (unicef)
have lower literacy rates. This also ex- estimate, the number of orphans goes (United
up Kingdom (ик)), conducted in
plains why cities - Jammu and Srinagar to one lakh. The majority of orphans2003,
in revealed that the prevalence of child
- have higher literacy rates than other labour has increased in the past decade
the valley are living miserable lives be-
districts, because they are relatively due to conflict in the Valley.
cause of the fear, depression, destitution,
rich districts. negligence and discrimination (Dar andThe political situation in over two
Khaki 2011). decades in Kashmir has seriously affected
Born and Brought Up in Conflict? The ongoing conflict in Kashmir also all aspects of life in Kashmir. The unstable
Also, one should not forget that the had an impact on people's ability to work, political situation has created a lack
Kashmir Valley has witnessed different particularly for those who are dependent of accountability amongst officials, and
phases of conflict over the last two dec- on daily wage work, the tourist and strikes and protests provide them with
ades and more. A number of studies reveal handicraft sectors and those who migrate an alibi to not perform their duties. These
that the long conflict has taken a heavy to towns and cities on a daily or on a long- political reasons must be considered in
toll. Although the numbers vary across term basis. The 62nd round of the nsso any analysis of the developmental per-
sources, even conservative estimates (2005-06) has shown a high unemploy- formance of Kashmir.
suggest that tens of thousands of people ment rate of 5.21% in the state against
have been killed in the valley in the last the Indian national rate of 3.09% (Office Institutional Blockades
20 years, leaving many children orphaned of the Commissioners et al 2009). Loss ofThe state implemented the j&k School
and women widowed. Education was employment has serious repercussions on Education Act in 2002, which makes it
the upbringing of children. The loss ofobligatory for the government to pro-
another casualty for children during times
bread-earners in many families due to vide free and compulsory education for
of escalated violence and unrest. In fact,
conflict-related incidents and the inability children up to class eight, and to achieve
during conflict, education and schooling
have an even more important roleof tomany families to work, especially inuniversalisation of elementary education
play than during peaceful times, theastourist and handloom sectors, forced throughout the state within 10 years.
many parents to withdraw their childrenThe government assumes responsibility
schooling can represent a state of nor-
from school and send them to work to
malcy with the potential of providing through the Act for establishing and
"safe zones" for children. supplement meagre family incomes. maintaining schools. The Act mostly relies
Studies have found that children who
However, like in other parts of the on the Local Area Establishment Com-
were out of school were engaged in child mittees (laec), which were to be consti-
world, in Kashmir, many schools were
specifically targeted during the years of in a range of activities, from carpet tuted at the level of each panchayat halqa,
labour
weaving and construction to working in town area, notified area and municipal
conflict. The Indian security forces occu-
thestalls, mechanic shops and the trans- ward for the Act's implementation. The
pied a number of schools. Although in tea
port industry. Domestic child labour is Act places an obligation on the parents
last few years, many schools have been
also a serious issue in the state and very to send their children to school and to
evacuated, a good number are still occu-
little spoken of, even in the state secre- ensure that they complete at least ele-
pied or surrounded by the Indian security
tariat, because an absolute ban would
forces. In a region of less developed infra- mentary education. The responsibility for
structure, the occupation of schools lead
for to a crisis for the elite. ensuring that parents are sending their
other purposes has taken a heavy toll onState-level macro figures reflect this children to school lies with the laec.
their accessibility and availability. dismal picture. The state had 70,489 However, the state government seemed
In fact, there are many other directchild labourers in 1971, which increased to be far more concerned with permitting
and indirect effects from the conflictto
in1,75,630 in 2011, an increase of 149%. and regulating private schools through
Comparable figures for the whole of India this legislation, maybe because the chil-
Kashmir that have implications for chil-
show
dren's ability to attend school. A study of that there were 1,07,53,985 child dren of the upper and middle classes go
children conducted by a psychiatric labourers
hos- in 1971 and that this increased to these supposedly better private schools.
to 1,26,66,3 77 in 2001, an increase of just In almost the ninth year since the com-
pital in Kashmir reported that almost
17.7% (Census 1971 and 2001 data in
36% (37 out of a sample of 103) displayed mencement of the Act, reports and the
National Commission for Protection of
symptoms of post-traumatic stress disorder 2011 Census data show that literacy rates
Child Rights nd). Unofficial sources giveare still compromised, and dropout rates
(Dasgupta 2008). Mental stress, anxiety
and depression have a direct effectevenon higher estimates. Fayaz Ahmadremain high, demonstrating that the Act
Nika, in his book Child Labour in Jammuhas failed to meet its promises. The
children's ability to attend school regu-
and Kashmir ; estimated that there werereasons for its failure seem primarily to
larly and to perform well in their studies.
While these are the direct effects,around 2,40,000 child workers in Jammulie in the fact that the Act has failed to
conflict has affected children's lives and Kashmir (Khalid 2011). More worryingraise fundamental questions. Assuming a
through many indirect means such isasthe fact that such children face highhomogeneous society, it has also failed to
increased economic uncertainty, loss levels
of of exploitation in Kashmir, are forced respond to institutional problems, to the

Economic & Political weekly Ш323 February 18, 2012 vol xlvii no 7 75

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fundamental socio-economic structures zones have achieved literacy rates of through the census or state sources. It is avail-
able in most cases with district administration
in different areas, and to different socio- 29%, while Trehgam and Langate edu- only. Data was retrieved for the authors from
economic groups. The assumption is thatcation zones have achieved literacy rates the District Administration of Kupwara in 2011
by the organisation G D Memorial Welfare
failure to attend school is due to ignorance,of 45% and 43% respectively in the sameSociety of Handwara.
carelessness and negligence on the partKupwara district. The state government5 Data on PCI is not presented for Ramban, Sam-
ba, Bandipore and Ganderbal districts since
of parents, and not because of socio- should not have to set up a new District these district were created in 2006 and data on
economic conditions. However, if oneFinance Commission Act to look into inter- PCI was not available in 2004-05.
dares to look into the lives of the com- district disparities. 6 Data retrieved from Registrar General and
Census Commissioner, India (2001): "Census
mon people, it becomes clear that the The debate must focus on the literacy Data Online - Population". Viewed on 3 Febru-
armchair speculations and assumptions rates of lower socio-economic groups ary 2012: http://www.censusindia.gov.in/Cen-
sus_Data_2ooi/Census_Data_Online/Popula-
behind the Act do not hold merit. like STs, who have a literacy rate of justtion/ST_Population.aspx
During discussions by the authors in 37-5%, just about two-thirds of the literacy
the villages of Bandipora, Kupwara andrate of the state overall. The population
REFERENCES

Kulgam in May-August 2011, it became of STs is substantial, about 11% of the Ali, Muddasir (2010): "Finance Commission to Sub
clear that the reasons for non-attendance total population,6 and should make us Report Today", Greater Kashmir, 30 Novembe
accessed 30 January 2012: http://www.greate
at school and drop out are multiple andthink about their exclusion not only kashmir.com/news/2010/N0v/30/finance-c0m
were mostly institutional. These include from development activities and from mission-to-submit-report-today-34.asp
- (2011): "Kashmir Facing Educational Deprivati
charging of school fees, compulsory uni- education, but also from the develop-
Commission", Greater Kashmir, 1 July, access
form and shoes, the inability of the statement discourse among stakeholders such 30 January 2012: http://www.greaterkashmi
government to meet other educational as government, ngos, academics, civil com/news/2011/Jul/i/kashmir-facing-educa
tional-deprivation-commission- 69 . asp.
expenses, the low socio-economic condi-society and the people. Dasgupta, Chandrani (2008): "Political Violence
tions of families, and therefore the engage- The new Indian Right of Children to Kashmir: Experiences from Kashmir" in M Sin
and D P Singh (ed.), Violence: Impact and Interve
ment of children in farming and carpet Free and Compulsory Education Act, 2010 tion (New Delhi: Atlantic Publishers), pp 201-1
weaving, low quality education which (ríe) provides for free schooling without
Dar, T A and S Khaki (2011): "Born in Confli
Brought up on Margins - The Sorry State
leads to children failing, no remedial orany annual fees, as well as free text- Kashmir's Children", Epilogue, 5(8): 28-31.
special teaching/coaching to children whobooks, notebooks and uniforms, all Government
of of J&K (2008): Socio-Economic Pro
have failed, a failure to implement other which have emerged as obstacles to reg- ofJammu and Kashmir 2008, Srinagar, Dire
torate of Economics and Statistics, Jammu an
government schemes such as providingular school attendance for a large pro- Kashmir.
- (2008-09): Economic Survey 2008-09, Srinag
means of livelihood and work to people. portion of children in Kashmir. The find-
Directorate of Economics and Statistics, Jamm
Most importantly, the state govern- ings of the Finance Commission and the and Kashmir.
- (2009): State Domestic Product of Jamm
ment does not appear to have any built- 2011 Census on low literacy levels and
Kashmir 1999-2000 to 2007-08, Srinagar, D
in mechanism for tracking the education striking disparities between the districts, rectorate of Economics and Statistics, Jamm
of each child. This negligence by officialsblocks and socio-economic groups should and Kashmir.
Government of India (2005): Report of the T
has resulted in many problems, includ-be taken as an urgent call for introducing Group on Development of Scheduled Castes an
ing a lack of effective planning at block legislation in j&k on par with the Indian Scheduled Tribes, New Delhi, Planning Com
and district levels. The defective educa- ríe, if we are to ensure equitable educa- mission, Government of India.
Khalid, Wasim (2011): "2.4 Lakh Child Labourers
tion system has not been able to create tional development across all regions, J&K: Study", Greater Kashmir, 4 February, a
demand and mobilise people to ensure districts and socio-economic groups. cessed 31 January 2012: http://www.greate
kashmir.com/news/2on/Feb/4/2-4-lakh-child
that all children are sent to school. labourers-in-j-k-study-39.asp.
There is no interface between parents and
NOTES National Commission for Protection of Child Rig
(NCPCR) (nd): "State-wise Distribution of
the education department. The Village
1 The other terms of reference of the Commis-
Working Children according to 1971, 1981, 1991
Education Committees, on which the sion were identification of backward districts
and 2001 Census in the Age Group 5-14 Years",
Data equi-
and their development at the micro level, on Child Labour Census 1971 to 2001,
implementation of the Act mostly relies, table distribution of resources for develop-
accessed 25 August 2011: http://www.ncpcr.
are almost all dysfunctional, have been ment, matters related to the employment back-
gov.in/Reports/Data_on_Child_Labour_Census
log, strengthening of local bodies, the state
1971 toof
2001.pdf.
politically hijacked, and not democrati- finances, augmentation of resources, matters
Office of the Commissioners of the Supreme Court,
cally elected. related to expenditure and debt, mapping of Law Network and University of
Human Rights
regions and subregions and governance Kashmir
reforms Department of Social Work (2009):
In conclusion, the debate on inter- with reference to decentralisation. Hunger in the Valley: A Study of the Implementa-
2 The
regional disparities should not distract other two members of the Commission
tion ofwere
Food and Livelihood Schemes of Govern-
Nisar Ali, former head of department ment
of eco-
in Kashmir, New Delhi, Office of the Com-
us from the inter-district disparities in nomics, University of Kashmir and Swami Raj of the Supreme Court. Accessed 31
missioners
the state, with poor and backward dis- Sharma, former bureaucrat and now a politician.
January 2012: http://www.sccommissioners.
org/Reports/commissioners.html
3 Registrar General and Census Commissioner,
tricts like Ramban, Budgam, Kishtwar, India (2001): "Census Data Online - Socio-Cul-
Registrar General and Census Commissioner, India
Ganderbal, Reasi and Bandipora falling tural Aspects", viewed on 30 January 2012:
(2011): "Provisional Population Totals Paper 1
http://
www.censusindia.g0v.in/Census_Data_2001/of 2011 (India and States/Union Territories)",
at the lower end of the literacy scale. Census_Data_Online/Social_and_cultural.html
viewed on 16 April 2011: http://www.censusin-
Equally important to consider are the dia.g0v.in/2011-pr0v-results/census2011_PPT_
4 An educational zone may or may not overlap with
papen.html.
inter-zonal disparities within districts, for a block depending upon the topography and
population of the block. Disaggregated data
Save the at
Children UK (2003): Adphail Gulab [Un-
example, Kalaroos and Sogam education the education zone level is not usually bloomed
available
Roses], Srinagar, Save the Children UK.

February 18, 2012 vol XLVii no 7 ЕЭ353 Economic & Political WEEKLY

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socialism, communism, and dictatorship
Post-'Post-mortem' of the proletariat as I have used them.
What Chattopadhyay might call "the
A Response to Chattopadhyay and Somel higher form of socialism ", Lenin called
"the higher form of communism ", or
simply " communism ". A perusal of one or
MARKAR MELKONIAN two high-traffic online dictionaries of
Marxism might be enough to make the
The Terminology
author case that, of "A
if there is anything like a pre-
Post-mortem vailing usage by Marxists of near and far, S
Strange Misreading of Marx: A then I come close to it. I see no advan-
(epw, 28 May 20x
Paresh Note", Note",
Strangeepw,epw,24 Chattopadhyay
September 2011) Misreading 24 September of Marx: ("On 2011) A a tage in adopting an uncustomary usage,
Paresh
has raised terminological objections and Chattopad for the sake of a Marxological point that,
Strange
differences of historical interpretation. Misreadin
in any case, is disputable.
He believes that I have used the terms
We do appear to agree, at least, thatSe
Note" (epw, 24
socialism, communism, and dictator-the "higher stage" of a post-capitalist or-
and Cem Somel's "On a 'Marxist'
der will be communism, with or without
ship of the proletariat in ways that Marx
Post-mortem" (epw, himself would not have endorsed. a preceding adjectival phrase.
24 September 2011) with When it comes to Chattopadhyay's
According to Chattopadhyay, my claim
that socialism is a state of affairs distinct
discussion of the term dictatorship of the
reference to terminological
from and transitional to communism proletariat, there is more agreement.1
objections in the use of the terms "has no textual basis in Marx". Socia- Chattopadhyay reminds us that, accord-
socialism, communism and ing to Marx, the conquest of political
lism, he says, is the more encompassing
dictatorship of the proletariat, term, and communism refers to a higher
power by the proletariat is not the end of
differences of historical stage of socialism. the proletarian revolution, but is rather
Without conceding that my use of the first step in the social revolution. The
interpretation, the class nature of these terms is at odds with Marx's
much longer revolutionary process, he
Soviet society, and the restoration frequent usage, I wish to point out notes,
that "continues through a prolonged
of capitalism. period until the capitalist mode of pro-
Marx and Engels did not use these terms
duction is replaced by the 'associated
in the same way throughout their careers
and in all contexts. In one context,mode
for of production'..." This protracted
example, they described communism "revolutionary
as transformation period
"the riddle of history solved" (1844),
between capitalist and communist soci-
while in another context it designated
ety" ais what Chattopadhyay identifies as
social order which, once achieved, would
the dictatorship of the proletariat.
Indeed, Chattopadhyay's remarks bol-
inaugurate the "real history" of our spe-
cies. It is not at all surprising that these
ster my claim that the term dictatorship
terms would have taken on different of the proletariat is synonymous with so-
meanings throughout the four tumul- cialism. Chattopadhyay avoids this con-
tuous decades of Marx's career as a clusion only because he ascribes a less-
thinking fighter. This is especiallyfamiliar
the meaning to the word socialism.
case in view of the fact that Marx had Let us place the two alternative vocab-
remarkably little to say about the post-ularies side by side: according to Chatto-
capitalist future. His 10,000 pages of padhyay, Marx is supposed to have held
unfolding theoretical work contain per-that political revolution will inaugurate
haps 100 pages of descriptive references(a) a more prolonged revolutionary phase
My article "A Marxist Post-mortem of Soviet
Socialism" (EPW, 28 May 2011) has prompted
to socialism or communism, and muchof proletarian dictatorship, followed by
several reactions, including a couple of critical of this takes the form of negative claims(b) the lower stage of communism or
responses in the pages of EPW. The responses and warnings against concocting "recipesocialism, and then, eventually, (c) the
are perspicacious, but some points could stand books for the cook shops of the future". higher stage of communism. According
to be clarified.
Chattopadhyay notes that subsequentto my preferred vocabulary, by cont-
Markar Melkonian ( markarm@socalrr.com ) is figures who had been influenced byrast, political revolution will hopefully
with the department of philosophy, California
Marx, notably Lenin, typically (but notinaugurate (a) proletarian dictatorship
State University, Northridge, California, US.
always, I would add) used the termsor socialism, which then in the fullness
Economic & Political weekly E3SSI February 18, 2012 vol xlvii no 7 77

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DISCUSSION = =

of should inform our evaluations of, say, their will


time offspring". Somel's definition of s
- Spartacus, Mazdak, Thomas Müntzer,
that is or"class" is to
closer to my definition
sa in a
classes and the workers' state have dis- Ambedkar. primer that I wrote in the mid-1990s:
appeared and the communist mode of With reference to the caricature of the Class. A large group that differs from other
production prevails.2 The reader is free ruthless and manipulative Leninists, such groups in a society in the following
to decide for herself which of these alter- Ronald Suny*s book, The Baku Com- four ways: (1) the place it occupies in a given
mode of production; (2) its relationship to
native vocabularies is preferable. mune ,3 presents a fascinating and very
possession, legal ownership, or control of
This sort of terminological disagree-different picture of Bolshevik power the means of production; (3) its ability or
ment is not unusual among Marxists andunder the most desperate of circumstan- inability to appropriate a surplus product,
ces. The brief, turbulent existence of the
communists, and I suspect that it is a re- in a manner determined by a given mode of
flection of some deeper malaise. I sus- Bolshevik-led Baku Commune contrasts production; and (4) the share of total social
wealth its members have at their disposal.4
pect it is just one more signal (as if wesharply with Kronstadt when it comes to
needed any more!) that, despite mount- the democratic practices that Chatto- Somel's definition is more clear and
ing inequalities, exploitation, disenfran-padhyay endorses - universal suffrage,
concise than my formulation above, and
chisement, warmongering, and despoli- multiparty elections and governance, it is more accurate than my definition in
ation of the planet, there is nothing to-democratic accountability, and active the post-mortem article. Moreover, his
day that one could properly call an inter-soviets and factory committees thatdefinition importantly includes the ad-
national left. drew their support from the militant,dendum that class membership involves
multinational oil industry workers.
the transmission of positions of control
Historical Interpretation Beset by foreign intriguers, riven by
(or relative powerlessness) to progeny.5
This delivers us to the issue of historical bloody ethnic conflicts, surrounded, Somel is on target, too, when he writes
interpretation. The Soviet Union, Chatto-isolated, and ultimately doomed in the that a correct definition of a class will al-
padhyay writes, was neither soviet norpath of an advancing foreign army, low us to see that the transition to capi-
socialist. It was not soviet because the Stepan Shahumyan, the "Lenin of the talism was carried out in the ussr by a
Bolsheviks soon shut down the soviets Caucasus", was able to somehow organ-
social group that had already wielded
ise for the common defence and welfare
and factory committees, or transformed economic and political power. This group
them into what Stalin later called "con- of Baku, all the while keeping a tight lid included high party functionaries, high-
veyor belts" of the party and the state. on even the most defensive acts of revo- ranking bureaucrats in all-union and re-
Nor was it socialist, insofar as socialism
lutionary violence. publican ministries, and managers of
is the self-emancipation of the working large firms. Members of this group and
class, because the Bolsheviks substitutedClass and Post-Soviet Russia their close kin made up part of the
In his critical comments ("On a 'Marxist'
a single party for a whole class. I do not Russian, republican, and regional no-
entirely disagree with these claims, but Post-mortem", epw, 24 Septembermenklaturas.
2011), Later in the process, in one
the interpretation strikes me as exces- Cem Somei appears to believe thatlocale after another, the nomenklaturas
I hold
sively one-sided. Here I wish only tothat the Union of Soviet Socialist Repub-
joined in a tense, frequently adverse
register two observations: lics (ussr) was at some point a classless
alliance with upstart New Russian "oli-
On the eve of the October Revolution, Lenin
garchs". Russia's post-Soviet rulers and
society. On the basis of this assumption,
viewed Russia as the weak link in the chain of it seems, he asks rhetorically "Butbosses,
whenthen, emerged from deep within
imperialism, a link which if shattered would did classes actually emerge in the the
ussr?"
Soviet order, by way of complicated
set loose revolutionary forces in the industri- I hope my article did not create the im- that historical materialists are
processes
alised west. Lenin explicitly connected pros- pression that I think that the ussr was
especially well equipped to describe.
pects of socialism in Russia, prospects for
ever a classless society! Stalin's prepos-
Somel poses what he rightly considers
building the dictatorship of the proletariat, to
to be a crucial question: Why did the
the success of the political revolutions in the terous announcements notwithstanding,
west. As we know, Revolutions did indeed the Soviet Union most certainly Soviet was aproletariat not resist the transi-
break out in Germany in 1919 and elsewhere, class-divided society, from the begin-
tion to capitalism in the early 1990s? We
but unfortunately for a generation of Europe- ning to the end.
will probably agree on elements of a par-
ans, these revolutions were put down with
truncheons and lead. After the defeat of the
tial explanation, including the role of
I probably contributed to the confusion
by inadequately defining a class as athe
social
party in controlling, demoralising,
revolutions in the West, and finding them-
selves economically decimated, embargoed, group "composed of members with a
and ideologically disarming generations
besieged and invaded, dire circumstances common relationship to ownership and
of workers, and stripping them of the
forced Lenin and the Bolsheviks to hunker
control of the means of production" (p 36,
very institutions that were supposed to
down, switch gears, and pivot, in an attempt
note 5). Somel, by contrast, defines represent
a class them and advance their inter-
to salvage something of the revolution.
as "a social group composed of members
ests. Because state security agencies,
Surely these considerations should with a common position with respect
schools,
to and the state-run media were
inform our evaluation of Lenin and his the control of the distribution of the
alsosur-
under their control, any independ-
comrades, just as similar considerationsplus, and who pass on these positions to
ent activity by workers was bound to be

78 February 18, 2012 vol XLVii no 7 laavi Economic & Political weekly

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disorganised and easily routed. Defeat And, the more ominous question: Is itis disconnected from social struggles, but
fed into popular disillusionment and even implementable? I suspect that the
rather the reverse. Marxists might take a
passivity, even as the top bosses and answer to the latter question might be:
brief recess from the hand wringing and
bureaucrats were coming together rapi- no, socialism could not have been imple-
self-flagellation to reflect on the fact that
dly as an incipient capitalist class. when workers in Eastern Europe and Rus-
mented in 20th century Russia, even by
Somel writes that whether or not the the most principled and sagacious Marx- sia embraced the opponents of Marxism,
people of the former ussr now rue this ists. We did not have a failure of Marx- they were the first and the worst to lose.
transition is beside the point. "A post- ism here, or even primarily a failure of Identity politics has been worse than
mortem", he writes, "diagnoses the causes leadership; the disaster that was the a failure, and the massive movement
of death, not what happens to the corpse leadership of the ussr after Lenin was with the revealingly un-Marxist title,
thereafter". But surely autopsies serve more a result of much deeper failure the "anti-globalisation movement", has
prospective purposes. What happens to than a cause of it. Comparing the state disappeared with hardly a trace.6
the corpse - or what does not happen to of the Russian Federation today to its When workers have relinquished class
it - is often a clue to both the immanent immediate predecessor, it has become analysis, they have lost benefits for
cause of death and the ultimate cause. In clear that the problem with Soviet Russia which their predecessors had fought
the case of the ussr, what did not hap- had much more to do with the fact that it long and hard.
pen to the corpse was the resurrection of was Russia than that it was Soviet. What With due respect to Somel, what we
Russia in a new body. In the past 20 Somel has called the "failed, have
discredited witnessed in recent decades is that

years Russian workers have seen their project" of 20th century socialism waswhen political action is disconnected
living standards and birth rates plum- the failure of attempts to build socialismfrom Marxism, the social struggles are
met, and "surplus deaths" skyrocket into on a non-capitalist foundation. On thisdoomed to failure, co-optation, or worse.
the millions. And yet until just recently, point, too, Lenin's post-revolutionaryIn the welter of escalating social strug-
Russian workers have remained quies- fears have been realised, and Marx andgles today, from Tahrir Square to Red
cent. Surely these post-Soviet develop- Engels have been vindicated, unfortu-Square, and from Liberty Square to the
ments have a bearing on the common nately, for most of us. Niger Delta, those with a stake in sweep-
claim that the ussr fell because it had Somel appears to hold the common ing transformation need to accurately
view that Marxism per se is both a poli-identify their enemies, to appraise their
become clear to everyone that capitalism
could do a better job of delivering the
tical commitment and a theory of society
resources, and to formulate realistic goals.
or history. So when I describe MarxismThe most clear-sighted environmentalists,
goods. It seems to me that this is an im-
as a research programme, he concludesthe most militant union activists, the
portant insight, with obvious political
that, "If Marxism and historical materi-most persévérant fighters for women's
significance for the medium-term future.
alism have become as disconnected from rights, the most determined enemies of
Theory and Practice political action as [Melkonian] implies, imperialism - they all need fighting
then they are doomed to insignificance Marxists and thinking communists, in
Somel poses the question: "How did his-
torical materialism enable the rulingin the real world of social struggles". the most ecumenical sense of the word.

party (the Communist Party of the Soviet Theory and class struggle are inter-
connected, of course. Perhaps they are NOTES
Union) to steer the country towards the
even dialectically interrelated. Theory is 1 I assume that we agree, too, that the term di
restoration of capitalism?" My response
tatorship of the proletariat has no especially
- as automatic as it is perhaps too neat itself
- a kind of productive practice, and tyrannical implications. The relevant contrast-
the class struggle is inseparable from
is that what was wrong with the imple- term is dictatorship of the bourgeoisie, which
mentation of Marxism in the ussr was describes a wide range of political orders
mental conceptions. Beyond these ob- including the class dictatorships that obtain in
servations, though, I am not sure that
that it was not implemented, at least not even the most liberal capitalist democracies
there is much more that needs to be said today. Since workers greatly outnumber capi
since the first years after the October
talists, the prospect of socialism holds the hope
under the heading of theory and prac-
Revolution. If Soviet policymakers could for greater democracy.
for decades deny the class character of tice. Marxists have spilled much ink 2 I use the verb forms "will inaugurate" and "w
segue", but of course there is nothing inevitabl
the ussr, then how could they be said toexpostulating on the subtleties of the about any of this.
have implemented Marxism at all? What-
unity of theory and practice, but there is 3 The Baku Commune, 1917-18: Class and Natio
still a distinction to be drawn between a ality in the Russian Revolution (Princeton, NJ
ever one may wish to call the official Princeton University Press), 1972.
ideology of the Soviet Union during class allegiance and a social science. In4 Markar Melkonian, Marxism: A Post-Cold. W
Stalin's tenure, Marxism did not inform Primer (Boulder: Westview), 1996, p 134.
any case, to put it bluntly, I would rather
5 Somel's definition would have better served m
run the risk of theoreticism than invite
Soviet policy any more than John Locke purposes of describing the gestation of the no
and Jeffersonian democracy informthe vagaries, repressions, and disasters menklatura within the USSR, and distinguish-
ing between them and the upstart New
United States policy today. of a resurrected "proletarian science". Russians who comprised many of the mos
Of course, this raises more questions But perhaps Somel has posed the pro- powerful and visible members of the so-called
"oligarchs".
blem wrongly. Perhaps the problem is 6 A notable exception is the creation of alte
than it lays to rest, including the question:
Why was socialism not implemented?not so much that historical materialism native media outlets.

Economic & Political weekly ЕШЭ February 18, 2012 vol xlvii no 7 79

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- EPW Research Foundation

Gross capital formation (GCF) as a percentage of the gross domestic product increased from 32.5% in 2004-05 to touch a peak of 38.0% in 2007-08 thanks to GCF in the private corporate sector inc
to 17.3%. The rate of GCF remained in a substantially lower range of 35.5% to 36.1% in the next three years up to 2010-11 again because the rate in the private corporate sector touched a lower ra
12.7%. Strangely, the rate of GCF in valuables increased from 1 .1% in 2007-08 to 2.1% in 2010-11.

Macroeconomic Indicators
,,
. ..
Index
. ..... ,
.
.
..
„ Variation
Numbers
(in
. of
%): .....
Point-to-Point
Wholesale , . Prices* „

(Base Year ' 2004-05^-1 00) л Weights December Over Over 12 Months Fiscal Year So Far

'

All Commodities

Primary Articles 20.1 197.9 -1.6 3.1 18.4 5.2 15.7 13.4 22.2 5.4 9.6 12.8
Food Articles 14.3 190.8 -3.1

Non-Food Articles 4.3 178.6 1.3

Minerals 1.5 318.5 2.6

Fuel & Power

Manufactured Products 65.0 140.6 0.6 7.4 5.4 3.7 3.7 7.4 5.3 1.7 7.1 6.3

Food Products 10.0 152.9 0.7

Food Index (computed) 24.3 175.3 -1.8

All Commodities (Monthly average basis)

л The date of fi
* Consequent up
"Fuel and Power

Cost of Living Indices Latest Over Over 12 Months Fiscal Year So Far

Industrial Workers (IW) (2001=100) 19712 -1.0 6.5 9.5 6.5 8.8 8.8 14.9 8.0 7.9 6.7 5.3
Agricultural Labourers (AL) (1986-87=100) 61812 -0.5 6.4 8.0 5.6 8.4 9.1 15.8 9.5 7.9 9.5 5.3
Note: Superscript numeral denotes month to which figure relates, e g, superscript 12 stands for December.

Money and Banking (Rscrore) 13 January Over Month Over Year Fiscal Year So Far Full Fiscal Year

Money Supply (M3) 7192570 141526(2.0) 983640(15.8) 693080(10.7) 606240(10.8) 896817 (16.0) 807920 (16.8) 776930(19.3)
Currency with Public 1000600 11942(1.2) 108870(12.2) 86400(9.5) 124240(16.2) 146704(19.1) 102043 (15.3) 97040(17.1)
Deposits Money with Banks 6189830 128548(2.1) 875540(16.5) 608190(10.9) 482890(10.0) 750239(15.5) 707606(17.2) 683375(19.9)
of which: Demand Deposits 669910 30881(4.8) 25790(4.0) -47750(-6.7) -73850(-10.3) -310 (-0.0) 129281 (22.0) 10316(1.8)
Time Deposits 5519920 97667(1.8) 849750(18.2) 655940(13.5) 556740(13.5) 750549(18.2) 578325(16.4) 673059(23.5)
Net Bank Credit to Government

Bank Credit to Commercial Sector 4671590 106680(2.3) 667240(16.7) 436180(10.3) 512940(14.7) 743997(21.3) 476516(15.8) 435904(16.9)
Net Foreign Exchange Assets 1520860 -78694(-4.9) 158410(11.6) 127520(9.2) 80980(6.3) 111858(8.7) 367718 (-5.2) 57053(4.4)
Banking Sector's Net Non-Monetary Liabilities 1288930 -36989(-2.8) 292820(29.4) 164170(14.6) 145480(17.1) 274078(32.2) -9050 (-1.1) 94672(12.4)
of which: RBI 569710 -42950(-7.0) 214780(60.5) 201360(54.7) 53290(17.7) 66660(22.1) -86316 (-22.3) 177709 (84ÏT
Reserve Money (27 January 201 2) 1430220 36050(2.6) 182880(14.7) 53400(3.9) 91690(7.9) 221170(19.1) 167652(17.0) 59696(6.4)
Net RBI Credit to Centre 518350 68290(-) 249760(-) 124320(-) 57010(-) 182460 149819 176397~
Scheduled Commercial Banks (13 January 201 2)

Aggregate Deposits 5798700 126108(2.2) 851730(17.2) 590730(11.3) 454140(10.1) 715143(15.9) 658716(17.2) 637170(19.9)
Demand 599190 39255(7.0) 29180(5.1) -42520(-6.6) -75600(-11.7) -3905 (-0.6) 122525(23.4) -1224 (-0.2)
Time

Investments (for SLR purposes) 1689620 10769(0.6) 227890(15.6) 188010(12.5) 76980(5.6) 116867(8.4) 218342(18.7) 194694(20.0)
Bank Credit 4354480 87497(2.1) 633720(17.0) 412390(10.5) 475970(14.7) 697294(21.5) 469239(16.9) 413635(17.5)
Non-Food Credit 4268080 84003(2.0) 611280(16.7) 390280(10.1) 460510(14.4) 681500(21.3) 466961(17.1) 411825(17.8)
Commercial Investments 173490 -209(-0.1) 25980(17.6) 25889(17.5) 29439(24.9) 28872(24.5) 11654(11.0) 10911 (1llT
Total Bank Assistance to Commi Sector

Note: Government Balances as on 31 March 2011 are after closure of accounts.

Index Numbers of Industrial Production November*

(Base 2004-05=100)

General Index 100.00 167.4(5.9) 165.3(3.8) 159.2(8.4) 165.4(8.2)~ 152.9(5.3) 145.2(2.5) 141.7(15.5) 122.6(12.9)
Mining 14.157 127.6-(4.4) 122.7-(2.5) 125.9(7.0) 131.0(5.2) 124.5(7.9) 115.4(2.6) 112.5(4.6) 107.6(5.2)
Manufacturing 75.527 177.8(6.6) 175.5(4.1) 168.6(9.0) 175.6(8.9) 161.3(4.8) 153.8(2.5) 150.1(18.4) 126.8(15.0)
Electricity 10.316 145.6(14.6) 148.4(9.5) 135.5(4.5) 138.0(5.6) 130.8(6.1) 123.3(2.8) 120.0(6.4) 112.8(7.3)
* Indices for the month are Quick Estimates.

Capital Market Fiscal Year So Far 2010-11

BSE Sensitive Index (1978-79=100) 17605(-4.6) 15939 18449(11.8) 15175 19702 16022 21005 19445(10.9) 17528(80.5) 9709(-37.9)
BSE- 100 (1983-84=100) 9185(-4.4) 8163 9605(9.1) 7805 10262 8540 11141 10096(8.6) 9300(88.2) 4943(-40.0)
BSE-200 (1989-90=100) 2151(-5.5) 1905 2275(8.8) 1824 2427 2034 2753 2379(8.1) 2200(92.9) 1140(-41.0)
S&P CNX Nifty (3 Nov 1995=1000) 5326(-3.6) 4765 5527(12.1) 4544 5912 4807 6312 5834(11.1) 5249(73.8) 3021(-36.2)
Skindia GDR Index (2 Jan 1995=1000) 2431(-16.4) 1942 2908(15.0) 1875 3441 2477 3479 3151(9.3) 2883(134.2) 1153(-56.2)
Net Fll Investment in (US $ Mn Equities) - period end 104640(4.0) 101592 100621(38.7) - - - 101454(31.5) 77159(43.1) 51669(-18.6)
Foreign Trade December* Fiscal Year So Far ~ Full Fiscal Year
Exports: Rscrore 131776 1024707(29.9) 7
US $ mn 25016 217664(25.8) 172965(3
Imports: Rs crore 198873 1651240(34.5) 1
US $ mn 37753 350936(30.4) 269175(2
Non-POL US $ mn

Balance ofTrade: Rs crore -67097 -626533 -439006 -478047 -518202 -533680 -356449 -268727 -203991 -125725

* Provisional figures.

Foreign Exchange Reserves (excluding

gold but including revaluation effects) 27 Jan 28 Jan 31 Mar Fiscal Year So Far

Rscrore 1313650 1255286 1245284 -110550 58360 68370 83040 73038 -57826 33975 359500 189270
US $ mn 263932 274440 278899 -3430 -10745 -14967 14749 19208 18264 ^57821 107324 46816
Figures in brackets are percentage variations over the specified or over the comparable period of the previous year. (-) not relevant.
[Comprehensive current economic statistics with regular weekly updates, as also the thematic notes and Special Statistics series, are available on our website: http:/

80 February 18, 2012 vol XLVii no 7 ПИЯ Economic 8c Political weekly

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Saving and Capital Formation (Base Year: 2004-05)
2004-05 2005-06

A Domestic Saving by Type of Institution (at current prices)


1 Gross Domestic Saving 1050703 32.4 1235151 33.4 1485909 34.6 1836332 36.8 1802620 32.0 2182970 33.8 2481931 32.3
(17.6) (20.3) (23.6) (-1.8) (21.1)
1.1 Household sector 763685 23.6 868988 23.5 994396 23.2 1118347 22.4 1330872 23.6 1639039 25.4 1749311 22.8
(13.8) (14.4) (12.5) (19.0) (23.2)
1.1.1 Financial saving 327956 10.1 438331 11.9 484256 11.3 580210 11.6 571026 10.1 835558 12.9 767691 10.0
1.1.2 Saving in physical assets 435729 13.4 430657 11.7 510140 11.9 538137 10.8 759846 13.5 803481 12.4 981620 12.8
1.2 Private corporate sector 212519 6.6 277208 7.5 338584 7.9 469023 9.4 417467 7.4 532136 8.2 602464 7.9
(30.4) (22.1) (38.5) (-11.0) (27.5) (13.2)
1.2.1 Joint stock companiesS 195910 6.0 257490 7.0 317283 7.4 446187 8.9 393172 7.0 505035 7.8 570847 7.4
1.2.2 Cooperative banks and societies 16609 0.5 19718 0.5 21301 0.5 22836 0.5 24295 0.4 27101 0.4 31617 0.4
1.3 Public sector 74499 2.3 88955 2.4 152929 3.6 248962 5.0 54280 1.0 11796 0.2 130155 1.7
(19.4) (71.9) (62.8) (-78.2) (-78.3) (1003.4)
1.3.1 Public authorities -59516 -1.8 -58279 -1.6 -19983 -0.5 54255 1.1 -133413 -2.4 -177097 -2.7 -99212 -1.3
1.3.1.1 Government administration $$ -75256 -2.3 -76881 -2.1 -44554 -1.0 25526 0.5 -156406 -2.8 -203500 -3.2 -125411 -1.6
1.3.1.2 Departmental enterprises 15740 0.5 18602 0.5 24571 0.6 28729 0.6 22993 0.4 26403 0.4 26199 0.3
1.3.2 Non-departmental enterprises 134015 4.1 147234 4.0 172912 4.0 194707 3.9 187693 3.3 188893 2.9 229367 3.0
2 Less Consumption of Fixed Capital** 319891 9.9 363721 9.8 418729 9.7 484695 9.7 565198 10.0 657897 10.2 753473 9.8
(13.7) (15.1) (15.8) (16.6) (16.4) (14.5)
2.1 Household sector 111036 3.4 125369 3.4 143895 3.4 163673 3.3 196670 3.5 229627 3.6 270049 3.5

2.2 Private corporate sector 99850 3.1 118967 3.2 143347 3.3 175895 3.5 205849 3.7 238071 3.7 277675 3.6
2.3 Public sector 109005 3.4 119385 3.2 131487 3.1 145127 2.9 162679 2.9 190199 2.9 205749 2.7
3 Net Domestic Saving 730812 22.5 871430 23.6 1067180 24.8 1351637 27.1 1237422 22.0 1525073 23.6 1728457 22.5
(19.2) (22.5) (26.7) (-8.5) (23.2) (13.3)
3.1 Household sector (1.1-2.1) 652649 20.1 743619 20.1 850501 19.8 954674 19.1 1134203 20.1 1409411 21.8 1479262 19.3
3.2 Private corporate sector (1.2-2.2) 112669 3.5 158241 4.3 195237 4.5 293128 5.9 211618 3.8 294065 4.6 324789 4.2
3.3 Public sector (1.3-2.3) -34506 -1.1 -30430 -0.8 21442 0.5 103835 2.1 -108399 -1.9 -178403 -2.8 -75594 -1.0
4 Net Capital Inflow*** 13338 0.4 44603 1.2 45524 1.1 64430 1.3 128760 2.3 180700 2.8 210100 2.7

В Capital F
1 Gross Capital Formation 1052232 32.5 1266074 34.3 1540584 35.9 1896799 38.0 2000103 35.5 2332381 36.1 2749189 35.8
(20.3) (21.7) (23.1) (5.4) (16.6) (17.9)
1.1 Public sector 240580 7.4 293350 7.9 356556 8.3 441923 8.9 531730 9.4 591622 9.2 676220 8.8
1.2 Private corporate sector 334869 10.3 500675 13.6 624179 14.5 863147 17.3 636314 11.3 820966 12.7 928512 12.1
1.3 Household sector 435729 13.4 430657 11.7 510140 11.9 538137 10.8 759846 13.5 803481 12.4 981620 12.8
1.4 Valuables+ 41054 1.3 41392 1.1 49709 1.2 53592 1.1 72213 1.3 116312 1.8 162837 2.1
2 Gross Fixed Capital Formation 931028 28.7 1120292 30.3 1343775 31.3 1641673 32.9 1821099 32.3 2041759 31.6 2331383 30.4
(20.3) (19.9) (22.2) (10.9) (12.1) (14.2)
2.1 Public sector 224108 6.9 271342 7.3 339617 7.9 401326 8.0 480698 8.5 543337 8.4 619923 8.1
2.1.1 Construction 144108 4.4 181332 4.9 226288 5.3 268523 5.4 316443 5.6 357747 5.5 423033 5.5

2.1.2 Machinery and equipment 80000 2.5 90010 2.4 113329 2.6 132803 2.7 164255 2.9 185590 2.9 196890 2.6
2.2 Private corporate sector 295621 9.1 436478 11.8 535666 12.5 711221 14.3 581308 10.3 697451 10.8 761108 9.9
2.2.1 Construction 74653 2.3 134607 3.6 161317 3.8 214822 4.3 123111 2.2 187720 2.9 213696 2.8

2.2.2 Machinery and equipment 220968 6.8 301871 8.2 374349 8.7 496399 10.0 458197 8.1 509731 7.9 547412 7.1
2.3 Household sector 411299 12.7 412472 11.2 468492 10.9 529126 10.6 759093 13.5 800971 12.4 950352 12.4
2.3.1 Construction 295003 9.1 296302 8.0 350953 8.2 422779 8.5 582391 10.3 618543 9.6 733655 9.6

2.3.2 Machinery and equipment 116296 3.6 116170 3.1 117539 2.7 106347 2.1 176702 3.1 182428 2.8 216697 2.8
3 Change in Stocks 80150 2.5 104389 2.8 147101 3.4 201534 4.0 106791 1.9 174310 2.7 254970 3.3
3.1 Public sector 16472 0.5 22008 0.6 16939 0.4 40597 0.8 51032 0.9 48285 0.7 56297 0.7

3.2 Private corporate sector 39248 1.2 64196 1.7 88513 2.1 151926 3.0 55005 1.0 123515 1.9 167405 2.2
3.3 Household sector 24430 0.8 18185 0.5 41649 1.0 9011 0.2 754 0.0 2510 0.0 31268 0.4
4 Valuables-»- 41054 1.3 41392 1.1 49709 1.2 53592 1.1 72213 1.3 116312 1.8 162837 2.1
5 Less Consumption of Fixed Capital** 319891 9.9 363721 9.8 418729 9.7 484695 9.7 565198 10.0 657897 10.2 753473 9.8
5.1 Public sector 109005 3.4 119385 3.2 131487 3.1 145127 2.9 162679 2.9 190199 2.9 205749 2.7
5.2 Private corporate sector 99850 3.1 118967 3.2 143347 3.3 175895 3.5 205849 3.7 238071 3.7 277675 3.6
5.3 Household sector 111036 3.4 125369 3.4 143895 3.4 163673 3.3 196670 3.5 229627 3.6 270049 3.5
6 Net Capital Formation 732341 22.6 902353 24.4 1121855 26.1 1412104 28.3 1434905 25.5 1674484 25.9 1995716 26.0
(23.2) (24.3) (25.9) (1.6) (16.7) (19.2)
6.1 Public sector 131575 4.1 173965 4.7 225069 5.2 296796 6.0 369051 6.6 401423 6.2 470471 6.1
6.2 Private corporate sector 235019 7.2 381708 10.3 480832 11.2 687252 13.8 430465 7.6 582895 9.0 650837 8.5
6.3 Household sector 324693 10.0 305288 8.3 366245 8.5 374464 7.5 563176 10.0 573854 8.9 711571 9.3
6.4 Valuables-t- 41054 1.3 41392 1.1 49709 1.2 53592 1.1 72213 1.3 116312 1.8 162837 2.1
7 Errors and Omission 11809 0.4 13646 0.4 -9151 -0.2 3963 0.1 -68723 -1.2 31290 0.5 -57159 -0.7

8 Net Capital Formation (adjusted) 744150 23.0 916033 24.8 1112704 25.9 1416067 28.4 1366182 24.3 1705773 26.4 1938558 25.3

9 Gross Capital Formation (adjusted) 1064041 32.8 1279754 34.7 1531433 35.7 1900762 38.1 1931380 34.3 2363670 36.6 2692031 35.1

Memo:
Government Final Consumption Expenditure 354518 10.9 401619 10.9 443477 10.3 513021 10.3 615333 10.9 774272 12.0 910719 11.9

* Quick esti
capital stock
of payment
Source : Cen

Economic & Political weekly ШШ February i8, 2012 vol xlvii no 7 8l

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82 FEBRUARY i8, 2012 vol XLVii no 7 ШШ Economic & Political weekly

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