Two decades of neo-liberalism in India
Exactly two decades ago, Dr. Manmohan Singh, then the finance minister, launched India on the course of liberalisation, privatisation and globalisation (LPG). On the event's anniversary, all the cronyism, criminality and plunder of public wealth associated with neoliberalism is on full display.
Neoliberalism's apologists deny its link with scandals, and claim there's no such thing as crony capitalism. It's as if the stockmarket and Enron scams of the 1990s, the three great telecom scams of the 2000s, and the more recent 2G, POSCO and Krishna-Godavari gas-pricing scandals hadn't happened.
Some neoliberals say the Washington Consensus no longer exists. It was called that because LPG policies were drafted by the US government with the World Bank and the IMF, headquartered in Washington. But the Consensus is very much alive. It's being thrust down the throats of Greece and Ireland with the same brutality with which it was imposed on over 100 developing countries.
This is a good moment to make a balance-sheet of neoliberalism in India. Its main claimed merit is that it produced high growth -- in keeping with GDPism, or worship of rapid Gross Domestic Product growth, regardless of social-economic, political and environmental costs.
"Emerging power" India's GDP has risen from the 12th position globally to 10th in absolute terms, and from the 9th to the 4th position in purchasing-power parity -- although in per capita terms India still belongs to the bottom quarter of all nations.
However, the connection between policy and growth isn't straightforward. The 1980s also saw high GDP growth, without a neoliberal regime. Factors such as high investment and savings rates, and improved infrastructure, also played a part in speeding up growth.
However, growth is one thing, distribution quite another. The quality of India's growth is poor and extremely uneven: skewed in favour of services, which now account for over 50% of national income. Agriculture, on which three-fifths of people depend, has declined to under 20%. Industry has grown far too slowly to absorb surplus labour from agriculture.
India's agrarian crisis is grave. It has driven more than 200,000 farmers to suicide over 12 years, an unprecedented tragedy in history
The fruits of growth have accrued largely to the top 10-15% of India's population. Growth hasn't raised the incomes of the majority, nor reduced income poverty. On optimistic official estimates, rural poverty fell from 50.1% in 1993-94 to 41.8% in 2004-05, and in cities, from 32.6% to 25.7%.
These numbers are considered far too low by many capable economists. But even assuming they're correct, the poverty decline was modest. It still leaves nearly 400 million Indians living at or below an animal level of subsistence, consuming fewer calories than needed to keep body and soul together.
So, at the end of the two highest-growth decades in recent history, India still has the highest number of dirt-poor people of any country in the world.
These numbers hide non-income forms of poverty and deprivation, including dispossession from land, ecological destruction, widespread malnutrition, social bondage, gender-related poverty, compulsion to drink unsafe water and live in unhygienic conditions, etc.
One-half of India's children are malnourished and two-fifths of its adults have an abnormally low body-mass index. It's no achievement that more Indians have cellphones than toilets.
Acute deprivation damages the ability of people to develop their elementary human potential. Life with dignity, and the capabilities that demarcate human beings from other species, remain impossible for crores of Indians.
Their number has grown over two decades as the economy's natural base has become degraded and common property resources increasingly privatised.
Income, wealth and regional disparities, always grotesque, have created two Indias: a huge cesspool of poverty, social backwardness and acute deprivation, especially in India's heartland; and islands of high growth and moderate social indices in the South and the West.
To this day, only one state (Tamil Nadu) comes close to matching Kerala's 1980s social indices.
Obscenely high income and wealth disparities are socially undesirable in themselves. They ensure that inequalities in opportunity will grow, putting the already disadvantaged at further disadvantage.
In India, inequalities cascade strongly at each stage of life: if you're poor, you have less access than the rich to nutrition, healthcare, education, employment, and other services. You are permanently underprivileged.
GDPism is reshaping India into a society which lacks cohesion and a shared sense of nationhood. An un-tutoured sense of community can only arise from relatively equal entitlements amongst people. A notion of common citizenship and shared destiny, which goes beyond participation in electoral processes, cannot grow in a divided society, made even more unequal by neo-liberalism.
All manner of parochial identity politics, as well as superstition and obscurantism, will thrive in such a society. It's therefore no surprise that Gujarat, among India's most industrialised and fastest-growing provinces, is also its most communalised state -- and Hindutva's laboratory.
All this means that India is paying an exorbitant price for GDPism -- including enormous waste of precious human potential, perpetuation of suffering, rising gender inequality, loss of social cohesion, growth of irrational faith, and a weakening of the foundations of political democracy.
Now add to this the ecological costs of GDPism through the melting of the Himalayan glaciers, rising sea levels, loss of prime natural forests, degradation of land, chemicalisation of agriculture, the ravages of reckless mining, extensive air and water pollution, poisoning of major rivers, overuse of groundwater, loss of priceless biodiversity, and rising greenhouse gas (GHG) emissions.
Driven by a luxury consumption boom under neoliberal policies, India's emissions are growing twice as fast as the rest of the world, accelerating climate change.
India is now the world's fourth biggest GHG emitter. Among the worst victims of climate change anywhere in the world will be Indians themselves. India couldn't have found a better way of shooting itself in the foot.
India and her neighbours have a lot to learn from this "emerging power" -- including lessons in how not to emerge.