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Resource centre on India's rural distress
 
 

A wrong diagnosis
-The Business Standard


NAC shouldn't have seen growth as the enemy of welfare

For the nine years of the United Progressive Alliance government, the National Advisory Council led by Sonia Gandhi and including many well-known people from the corporate and non-governmental organisation world - mostly those with a left-of-centre perspective - has been the focus of much attention. The conventional narrative is that the NAC represented Sonia Gandhi's socialist instincts, and regularly overruled the liberal instincts of the higher levels of Prime Minister Manmohan Singh's government. There was much that was wrong with this theory always - but, as Aruna Roy's recent resignation from the NAC shows, perhaps what is least true about it is that the NAC determined policy on a regular basis. The initial burst of legislation of UPA-I was based on both the NAC's recommendations and the Common Minimum Programme of that government; it is clear that, since then, the NAC has not exactly had things its own way. Thus there are resignations not just of Ms Roy, but before her of Jean Dreze and Harsh Mander - these three individuals together represented the activist heart of the NAC.

The immediate provocation for Ms Roy's departure, according to her statements in the press, has been disagreement over minimum wages in the National Rural Employment Guarantee Scheme. This may only be the last straw as she is concerned, however. The real point is that, when economic growth ceases, it becomes impossible for a government to expand any welfare schemes. If Ms Roy worries that UPA-II has paid less attention to the NAC's suggestions than UPA-I, the answer lies in the faltering growth of the past years. Tellingly, Ms Roy misdiagnoses the cause and effect here - her public statements seem to indicate that there are some people who believe in social-sector progress, in the NAC; that there are others who believe in growth, in the government; that the two sets of people must disagree; and that the second set are winning. This belief is simply wrong. The truth is that whatever advances have been made in the nine years of the UPA came because of, and not in spite of, high growth. In the absence of the buoyancy to government revenue that growth provides, India simply finds itself unable to expand the safety net that it must provide its poorest, and for which Ms Roy and others have persuasively argued.

After all, what are the UPA's flagship schemes? Consider the Sarva Shiksha Abhiyan, for school education. In 2003-04, government spent '2,730 crore on it. In 2011-12, it spent '20,841 crore. Where could this tenfold increase in expenditure come from, but from increases in revenue born of the eight-per-cent growth that India experienced in those years? Expenditure on health went up from '7,500 crore in 2003-04 to '27,000 crore in 2011-12, resulting in a startling five-year increase in Indians' life expectancy in that same period; could that money have been found if growth was not an equal priority for the state? The problem, in the end, with the National Advisory Council was not that it had excessive power, or that its members were opposed to the nuts-and-bolts - "the plumbing" - of policymaking. The problem was that it failed to grow out of an adversarial ideological relationship with the idea of growth; it failed to see that prioritising growth was, in fact, necessary for its own conception of what the Indian state should put into place.