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LATEST NEWS UPDATES | Tackling inequality the big challenge for new government-Neha Sethi

Tackling inequality the big challenge for new government-Neha Sethi

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published Published on May 12, 2014   modified Modified on May 12, 2014
-Live Mint
 

Recent Maoist violence highlights the conflicts that centre around the model of India's economic growth

 

New Delhi: The deaths of nine people from violence related directly to the general election-occurring in and around polling booths-are an early warning to the next government that it must start thinking about how to balance economic growth with social justice and equity, experts said.
 
These deaths-mostly in areas hit by Maoist violence-highlight the conflicts that the incoming government will have to deal with.

 

While five paramilitary soldiers and three polling officials carrying voting machines were killed in an attack by Maoists on 24 April in Jharkhand, a poll officer was shot in Kashmir on the same day. These conflicts, which fuel extremist attacks, centre around the model of India's economic growth.

Whether to grow first, and then worry about distribution of wealth, or to make sure that all sections of society grow together, and how much of one can be compromised for the other, will be some of the tough decisions facing the new government.

With the aspirations of the youth fired up, S.L. Rao, former director general at National Council of Applied Economic Research (NCAER), said the new government will have to factor in these aspirations while thinking about addressing inequality.

"While inequality in the country has increased in the past 10 years, the good news is that the majority of the poor have not become poorer," Rao said. "The overall poverty ratio has reduced and this means that while a few of the people have become extremely rich, the mass of the population is also doing better than before."

Planning Commission figures show that the number of Indians who were below the poverty line declined to 22% of the population in 2011-12 from 29.8% in 2009-10 and 37.2% in 2004-05.

 

However, unemployment rates have not shown a drastic change although the rate at which the economy grew increased from 4% in 2003 to 4.5% in 2013 (with years of much higher growth rate- 9.6% in 2007 and 9.5% in 2006).
 
According to the World Bank, the unemployment rate (modelled on International Labour Organisation estimates) went down from 4.3% in 2000 to 3.4% in 2012.

 

N.C. Saxena, a member of the National Advisory Council (NAC) that set the social agenda of the outgoing United Progressive Alliance government, said there is no conflict between growth and equity and there should be none. "Both of them should go together," Saxena said. "We need to have growth which in turn will lead to more taxes and generation of revenue, that can be used in the social sector and for safety net programmes."

The incumbent coalition led by Congress did not fully understand its own strategy and messed up the situation, said Jayati Ghosh, professor of economics at Jawaharlal Nehru University. "There needs to be no trade-off if you manage your social programmes properly," Ghosh said. "If they had done well on the agriculture and small-scale industries level, then growth would have been reflected (the performance) and it would have had a multiplier effect."

Latest 2011 Census figures have underscored the links between economic growth, consumption and aspirations. Data released last year show Indians living in slums are not different from others in cities in terms of their ownership of assets, including consumer products and property. This justifies growing aspirations, which increases the desire for better jobs.

There will be 50 million young people in the market in the next five years with these aspirations, said Ghosh. "Privatized higher education is associated with huge aspirations which cannot be met at many levels," she said. "The biggest reason is that there is a mismatch in the skills and educational institutions are not creating effective skills."

Two-thirds of tertiary education enrolment is in private institutions but they are not resulting in creating better jobs, added Ghosh. "Even though we have doubled tertiary education, the institutions that are functioning are no better than shops. The government's skill-development mission was a good idea but it did not take off," she said.

Saxena said higher education should not be a priority and the focus has to be on building skills.

 

"We do not need new universities. We have unemployed engineers because there are third grade engineering institutions which are not able to produce qualified people," he said. "Quality is important, quantity is not."
 
Another trade-off related to the potential for conflict that the incoming government will need to consider is that between economic development and environment.

 

Economic growth, said Saxena, will have an impact on the environment, which then will need to be compensated for. "So if you need to cut some trees for a project, then the solution is to plant a hundred other trees for every tree that is being cut. We need to do afforestation to make up for it," he said. "This is easily reconcilable by having a massive afforestation programme."

But the Maoist movement in the country seems to be on the decline because of the lack of its leadership, says Ajai Sahni, executive director at the Institute for Conflict Management in New Delhi.

Sahni said Naxalism was not an extraordinary threat to the country and was manageable. "It has grown in the country because of the incompetence and non-governance of successive governments. We should focus on targeted operations based on specific intelligence and not use force blindly. Maoists need to be dominated by use of force and then be brought to the negotiating table. They can be reasonably contained," he said.

Experts say conflicts around environmental issues and land acquisition are set to grow in the country, with industries wanting to expand and grow, and locals unwilling to part with their land or live in a degraded environment.

Chandra Bhushan, deputy director general at Delhi-based not-for-profit Centre for Science and Environment (CSE) said the coming government must prioritize resolving conflicts that have grown around environment clearances, and around allocation of natural resources.

Dongria Kondh tribals' rejection of bauxite mining by the British multinational Vedanta Resources Plc. in the Niyamgiri hills of Odisha was the first true environmental referendum that India has seen. Village-level protests against South Korean steel maker Posco's plant in Odisha were another example of locals fighting to protect their environment.

Similarly, villagers in Kudankulam in Tamil Nadu have resisted government moves to set up a nuclear power plant built in collaboration with Russia.

 

Dayamani Barla, an Aam Aadmi Party Lok Sabha candidate and a social activist who has been protesting land acquisition, said the previous governments had been following the model of international development agencies to determine how much clean water is needed, how many trees are needed, and the amount of land required industries. "PPP (private-public partnership) model is being followed for all sectors and schemes," Barla said. "But we need to design our own model for the country."
 
"There are huge conflicts around land, minerals and water.

 

A system of crony capitalism has set in where the resources of the poor are being given to the rich in the name of economic development," said CSE's Bhushan. "We must have a natural resource allocation policy that benefits all (but especially the poor) as well as allows prudent and sustainable use of these resources."

Live Mint, 12 May, 2014, http://www.livemint.com/Politics/91Gf4v9E8CdwqqgF9iD95K/Tackling-inequality-the-big-challenge-for-new-govt.html


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