By Dr Kamal Nayan Kabra*
Basic Issue: Growth sans employment is travesty of development
Fair, remunerative, assured (that is continuing over a reasonable length of time such that cannot be terminated arbitrarily ) provision of opportunities to the adults to earn their livelihoods to sustain themselves and their families by contributing to the national/ social production process may be considered a reasonable description of what is mean by employment generation. This participation in the social labour process enables one to discharge her/his role as a social human being by participation in the social/national market economy. Hence widely prevalent/observed inability /failure to provide employment, as described above, to a varying, often large, part of their labour force, is among the seminal, historically observed and presently prevalent systemic characteristics of the modern market economies, including India.
Experience has shown that many counties adopt measures to go in for the growth of their GDP, basically in the existing framework, though also going in for, at the same time, new products and technologies and similar other changes. It is believed that by means of this process enough new job opportunities would emerge to meet the economy’s needs both in terms of numbers as also in terms of the requisite remuneration (wages) as also the supplies of the goods and services to maintain the economy on an even keel. In case many adults do not find such a work opportunity, or the wage level is not adequate and assured the resulting situation would demand steps to provide either partial, fleeting relief or long term major interventions to increase and improve the conditions of the people willing to work. Such a situation of lack of conditions to absorb a part of the labour force willing to work may not enthuse the employers who make investment. The resulting condition of a buyer’s market for labour may increase the rate of return the employers may obtain. The resulting high rates of profit may further attract new investments and help increase profit. But labour surplus may remain intact. Often this situation may not be able to remove the mismatch between the supplies of and demand for labour. It may lead to less than full use of both the installed capital equipment and/or available labour supply. The state may have to intervene in such cases to maintain the macro-economic balance and social dissatisfaction and contain social unrest. It is also possible that the economy may be allowed to limp along with less than full use of the productive potential. Prevalence of such situations generates both unequal societies as also inadequately developed or unbalanced economies. Different countries with varying experience of this kind spawns an unequal, divided world.
For long India finds itself in such an unenviable situation. Let us look back at the experience of India over the past over seven decades. During this period the state along with the big private companies have been making vigorous efforts to increase the rate of growth of GDP of the country. It also expressed its intention to correct socio-economic imbalances and move towards a fair and just society.They have been trying large scale modernization and industrialization and creation of supporting infrastructure facilities. Some other efforts are also been visible to make good the disabilities, gaps and distortions bequeathed by the departing British Raj. However, ever since the time of the First Plan the intention to follow the course of GDP growth-led high productivity has been expressly chosen as a pragmatic course of interventions for development.
A bird’s eye view the story of how India has been doing shows that a lot has been done to increase the growth of big capital-guzzling industries. However the same unfortunately cannot be said about the demands and legitimate aspirations of the country’s vast and growing labour force. Yes many policies were announced and in part have been carried out as well. Growth rate, though fluctuating, has noted remarkable gains. But it seems pro- employment and pro-equity measures for decent work for everyone remains a distant dream. Later on following greater submission to the pulls and pressures of the rich and powerful who are eh major players in the growth game, mainly the private corporates, employment and equity receded in the background and the supremacy of the growth policies came to the fore much more boldly than before :the sign post of the neo-liberal era. For a pretty long time every year over 10 million new entrants to the labour force try to find a toehold in the work force. Many estimates about the huge reserves of wealth in the hands of a small super rich sections (both declared and hidden) indicates that just as there is a virtual glut in the labor market, similar glut can be seen in the coffers of the plutocrats. The crisis is that the gap between the needs and urges of the two polar opposite poles remains unbridgeable for a number of reasons which go beyond our present concern. The growth game lumbers on but the struggles for livelihood adequacy and security remain unrewarding for a huge majority.
It would add to the existing inequalities and thus further limit the market for the small and informal industries. The initial neglect of the decentralized small men essentially small town and rural industries, just like small farmer agriculture across the country received step-motherly treatment. Little wonder the “ half-real, half-illusory” services sector had precociously stolen march over the rest of the sectors. Thanks to the pro-rich farmer modern high tech agriculture India is bale to export food grains while the country remains high on global hunger/malnutrition index. In fact the creation of a growing marketable and marketed surplus is essential for creation of market for industries and services remains subdued.. The modern high tech industries heavily leaning on the external economic forces have contributed to the situation of Indi’s chronic balance of trade deficit, met by drawing on the capital account and the contributions of the Indians working abroad. Assured and adequately rewarding employment adds to equalities and creates basis for sustainability/ social desirability. A real self-reliant India. But the dream of the planners to adopt the pragmatic path seems to have floundered, with early signs appearing even by late 1950s. By mid-1960s the warning by many about the swelling tide of the people suffering the pangs of absolute poverty sounded global alarm bells.
What it means is that modernizing-industrializing Growth of GDP could not lead to the outcomes expected from it. Of course some stray attempts, right from land reforms to progressive taxation, to setting up of Pachayats and decentralized institutions and abolition of privy purses, nationalizations of banking and many key industries and, to cap them all, the much hyped Garibi Hatao and other rural development programmes of asset distribution, have been undertaken. Now a bunch of populist measures in new avatars galore: even some private goods are supplied by the state: Freebies are a new vote and support game.
However the stubborn fact remains. In an iniquitous society and economy Growth cannot guarantee adequate employment to gradually lead to the creation of a sellers labour market, that is, an era approaching a full employment situation except as frictional unemployment. In any case development cannot be justly treated as a mere quantitative economic phenomenon of very large and increasing production and has to address the social problems in their totality in small but self-sustaining sure steps over a reasonable period. Actually employment, equality, poverty reduction and environmental protection are very closely inter-related, These problems are also seen in very high income countries, say the Global North. Why does one miss the apparent truth!
A major part of such worse-off sections, of course, with their own stratified and caste and disparities-ridden character, working in farming, small and traditional, mainly village and small town industries, are able to make have low level of linkages with much larger outside markets. They largely meet local and regional demands: the forte of rural, cottage and handicrafts industries. Their incomes are low and uncertain and standard of living pitiable. Also they face innumerable uncertainties and insecurities. Also they get little public/social goods and services by the state, even recent policies are silen ton the universalization of these services and facilities to enable citizenship and market participation on a meaningful scale.. The question of their employment, if proper and adequate and assured, may help them overcome many other problems they face. It is in fact a primary condition for proper citizenship as members of civil society and participative development process.
It is exclusion from such employment, as described above, and as outsiders to the circles of formal, organized, better-off sections. Often they are placed in a portmanteau category called informal/unorganized economy with people eking out subsistence and as partly employed, partly or un- or under-employed. Their size varies according to the criteria and sources of data, but as a matter of consensus, it can be placed to cover about three-fourths of Indians. Regular organized sector employment, largely in the rich, urban and metropolitan areas or in remote, inaccessible areas where natural resources are located forces the employment-seekers to migrate and exposes them to many vulnerabilities with often hidden costs on the regions and rest of the stay -put members of the family from which people have to migrate. The simple point is employment is a many-faceted search for livelihoods and both physical and social lebensraum as the very essence of human existence. The incidental outcome of growth of production and the gains made by the organizers, investors-owners and managers and the public agencies hardly leave enough for the workers who are recruited, often through touts and contractors who also take their own cuts. The meaning of employment without a roof, home and hearth and adequate food and physical rest for the next day’s work are parameters the market economy – growth centric view of the economy, its growth as development perspective hardly concerns itself about. In the present exercise we take a humanistic, social and moral view of employment in a democratic society true to the Constitutional values and ideals. It is some such perspective which is implied when one speaks of decent employment as the relevant category.
Mahakavi Nirala said,
“Manav yahan bail Ghora hai,
Kaisa Tan-man ka Joda Hai.”
It is ironic indeed that even many highly industrialized rich countries, governed by democratically elected states, enjoying very high per capita GDP/GNP and dominated by mega corporate entities operating on the global scale, commanding humongous capital and potent productive resources in various forms and counted as developed economies and democratic societies are unable to provide regular, remunerative and secure participation to their labour force.(Rifkin, 2004). This situation may well be termed as one of adverse inclusion, as a feature of an essentially involutionary society. Even in cases where various forms of social security is provided, pucca and full decent employment may remain a far cry. This kind of situation comes to prevail irrespective of their enviable high levels of GDP/GNP, an electoral political system (based on each country’s history and culture) and a fairly comfortable place in the global market system. This kind of treatment meted out to the bulk of the work force is neither a recent nor an isolated phenomenon. In view of the foregoing, we may say that with persistent lack of employment to a reckonable part of the population, there comes to prevail high levels of inequalities (generally non-functional). The above two factors, among others, result in the creation of pockets of unacceptable poverty among some sections: the levels and spread of such poverty simply mock their high levels of total and per capita GDP. Nor have they been able to maintain a reasonable ecological balance. Thus overall, these countries seem to be bereft of the critical essential attributes of a developed nation/society (Dudley Seers).
As theoretical examination and empirical evidence show growth of GDP and social Indicators such as highand rising levels employment, increasing equality, reduction of poverty and better ecological balance do not always and necessarily move in the same direction. Certainly by itself GDP has little to do with normative issues and outcomes. Much depends on the specific policies and their relative priority compared to the policies directed towards pushing up the growth rate. Also important is the historical situation inherited by the country in question. If a country starts with a heavy backlog of the four main items of social malaise, as listed above, and follows policies to push up the rate of growth by giving precedence and priority to growth accelerating measures, the initial situation would further worsen (Harry Johnson).
One may note: We are not speaking of any drastic change to reduce initial bad situation as a precondition. But for the future the new, additional policies have to give emphasis on improving the lot of the lower sections, even if their net contribution to growth is small, but at least a net addition. India talked of many lofty ideals and a grand social-national vision (Nehru and Rajendra Prasad on 15th August 1947 in r the Constituent Assembly). But the policies and their implementation did not match with declared aims. It means the existing power balance was greatly potent and able to call the shots for its partisan purposes. On the contrary, the declared aims were given in practice an inferior position (Tarlok Singh). The likely beneficiaries were not able to, despite the democratic rights and numerical upper hand to get the policies calibrated in their favour.
True the journey of different countries towards such a state of development may be at various stages depending on the positioning and strength of the development friendly processes and institutions. It means the quantitative, economistic, status quo- centric, one-dimensional concept of growth as development stands in sharp contrast vis-Ã -vis the integrated multi-dimensionality of the holistic concept of inclusive development based on clearly stated value premises. It may be noted that the GDP/GNP centricity is generally used by most agencies as the sole over-riding criterion for the global ranking of nations on the metric of “growth as development”, irrespective of the levels and direction of unemployment, inequalities and poverty. The recently released Global Social Mobility Index, based on survey of 82 countries regarding six specific broader socio-economic indicators by the WEF may be taken to show a welcome departure from the socially disembodied one-dimensional indicator of GDP growth. (also Stglitz, Sen and Fitoussi report). Equality, employment, escape from poverty and ecological depredations may be taken as value-based comprehensive indicators of social wellbeing, justice and inclusion. They have to be treated as inalienable features of a developing democratic country.
One may wonder whether any tangible movement towards the three goals may be registered with a static or a declining level of GDP. As a general proposition, a positive thrust towards comprehensive scial development, the GDP of a country is likely to be higher. It is a point the advocates of de-growth may do well to ponder over. We do not wish to go into the complex question of whether or how to set off some of the four criteria vis-a-vis each other or the likely inter se conflict between them. The essential issue is that neither growth in isolation, that is, by itself, nor with sacrifice of any of the elements of the desirable four pillars can be considered a part of the traverse towards development. The de facto position of nominal GDP/GNP (as a business proposition is different from the de jure level of real GDP/GNP, as the livelihood proposition, see Veblen 1923) has far-going implications for development discourse in general and development and employment and equity policies in particular. This has been critically indicated in many writings either by implication or explicitly (Schmelzer, 2016, the report by Stiglitz, Sen and Fitoussi among dozens of other powerful critiques).
In view of the above let us look specifically at the Indian growth story and how it tended to worsen the employment, that is the livelihood adequacy and security of the common citizens. The market-centred ideas of employment seem to have rather limited relevance to the Indian conditions owing to the predominance of the informal sector as the main means to cater to the needs of people’s livelihood. Instead of livelihood adequacy and security the poor were defined as employed or partly employed on the basis of their willingness to opt for more work! or, efforts at scrapping a living by various means in a limited manner: often in terms of their survival level consumption of food with a given calorific value. The point of such exercises seemed to ensure that one may remain available for work at grossly inadequate sub-human level/ remuneration and the surplus garnered by the rich. This way the managers of the economy may count them “above the poverty-line”! These concepts/ideas/ policies betray the basic human needs and dignity, let alone rights the Constitution so eloquently upholds.
To sum up so far: We went into the above issues with a particular purpose; we think that given the prevalent Indian reality, nothing would be far from truth to consider the level and rate of growth of GDP/GNP as the sole, overriding indicator of India’s development. In fact, it may, in some cases, turn out to be the opposite of development. This is specially so with respect to the question of the four critical closely inter-connected dimensions of development ( viz, employment, equalities, exit from poverty and ecological balance). These four seem to have worsened despite (if not owing to) fairly high fluctuating rate of growth recorded by India’s GDP/GNP over the period of past over seven decades. What has emerged is a very large, often growing but highly imbalanced economy in which the huge majority has continually to face misery and privation (what Simon Kuznets considered the hall mark of backwardness) owing to disproportionately low access to the means of livelihood, as a small minority of plutocrats dominate the economy and polity and intensify myopic exploitation of non-renewable and renewable. An even deeper malaise connected with GDP paradigm is that in spite of the growth of the number of persons counted as ‘employed’/above poverty line, this assessment seems to be based on a particular apologetic set of ideas/ standards regarding whom to consider employed or non-poor (as discussed above). It can be seen that of the four inter-related cardinal dimensions of development, the content and implications of employment directly link up with equality, poverty and ecological balance seen at the ground level. In simple straight terms, growth resulting from priority provision of adequate and secure livelihoods on a reckonable scale (what Hicks has called ‘absorption’) contributes simultaneously to poverty reduction and equality. But growth without incorporating employment on a substantial scale as its principal contributor is likely to worsen the lot of the left-outs (Letouse). Moreover, balanced emphasis on the quantitative and social-institutional dimensions of improved/ enhanced productivity may well turn out to be eco-friendly as well. For comparative purposes we may mention in passing that primary emphasis on increasingly higher levels of growth as the be-all and end all of social endeavours is not unlikely to be injurious to the four social cardinal pillars of development, as discussed above.
Even for the growth of GDP many aspects associated with it have to be reckoned. Special attention would have to be devoted, inter alia, to the commodity composition and factor –intensity of growth, from the point of social, macro, regional, cultural and micro-level considerations. Similarly volatility, lop-sidedness, weaknesses and infirmities plaguing the estimates of growth, regional-sector-specific and international balance associated with the growth rates call for pointed attention.
Similarly the gulf between the declared/recorded or reported numbers of GDP on the one hand, and the actual ones on the other (which in fact become virtually unknowable for a number of administrative, political, corporate practices and global financial linkages related reasons) is becoming a highly critical aspect of both the state agencies and the private corporate sector entities as principal growth agencies. These kind of factors seem to subtract substantially from its real economic, social content, let alone the ethical dimensions of the growth of GDP.
Without going further into this aspect, at least for the sake of putting the record straight, we simply reiterate that it is tragic indeed that right from the word go Indian policy and development establishment adopted and claims to have practiced the pursuit of accelerated economic growth by means of catching-up industrialization as the principal element of the growth strategy. (See the first chapter of the First Five Year Plan, 1953). This was based on following in the footsteps of the rich Western countries who have already by mid-1950s attained high level of GDP and world domination with near monopoly of heavily capital and energy intensive technologies, multilateral global institutions and reliance on high quality educated experts. Even the supplies of increased output caters to the demand of the small number of the plutocrats, other rich and top-end middle classes, mainly in the urban and metropolitan areas; and thus lead to adverse inclusion.
In simple terms such growth of GDP is not capable of addressing what scholars call massive material misery and deprivation which is the other name of the living conditions of the majority of Indians. Only limited and inadequate measures have been taken to universalize the supply of public goods to enable people to participate in growth and democracy. Later liberalizing policy changes right up to the present day are continuation of essentially similar policies with greater freedom to the Indian and foreign big companies and their political-administrative cronies to spearhead the growth rate with hardly any positive bearing on the living conditions and livelihoods of the masses.
In view of the above we briefly examine the question of employment along with its close bearing on the other main dimensions of development as they emerges in India.
It is rare indeed to come across analyses probing why there have been virtual riots around the recruitments camps for the military and paramilitary jobs; or, why for a handful of the low level government jobs there is an avalanche of the number of hopeful applicants; or, why huge total sums are collected by the government agencies which advertise vacancies and virtually ‘tax’ the hopefuls by way of fees for holding ‘tests’, but he process is not completed for years. The unending search for jobs has led to the mushrooming of thousands of coaching centres and publication of reading material for these tests. Unemployment as a source of employment is an abiding irony indeed! Have our job market experts cared to look into their rationale? The simple fact that for a number of years a little over ten million Indians annually enter the labour market while only a small fraction succeeds to find an entry. What are the cumulative implications of this hardly annual phenomenon of accumulating frustrations? Thanks to the onslaught of neoliberal ideology the freedom of the potential employers has been enhanced by granting them in advance the freedom of to ‘fire’ ! One wonders whether the newly acquired freedom to fire is just a Damocles’ sword to discipline the workers and job aspirants to accept whatever terms and conditions of work the employer decides to offer.
Let us look at the agricultural scene as the direct and only life line of more than about half of the population of India. It includes mostly the small and marginal farmers, whose land holdings are below 3 acres each cultivator. They control over 80 percent of the land-holdings. All the farmers taken together contribute under 15 percent of the nominal GDP. The rest goes to the formal/corporatized/organized and the rest, including the non-farm informal economy. It also bears the imprint of gender, caste and regional situation, particularly in the rural and remote habitats. Out of a hugely complex and massive economy, society and polity we have hinted at some crucial aspects which indicate how massive, acute and often weakly acknowledged and unattended remains the question of adequate and assured livelihood, that is real and effective employment. Recall an American Scholar of repute, Thomas Paine, considered the responsibility of the democratic state to provide the means of livelihood to the citizens. The metaphor of “Roti as Ram” is nothing but the same story in our own Indian metaphor: as that of Roti and Rozgaar as Ram. In this way we identify regular decent employment as the principal means for the journey towards development. It makes employment the basic fulcrum of development : Achieve sustained high growth rate to enable over a foreseeable time period, not as a pre-condition but surely as one of the items of outcomes, all the adults to attain livelihood adequacy and security. This has to be the first and foremost item on the agenda of development. It is the stepping stone, followed by the later tasks towards further embellishment of both quality of work life, outcomes and livelihood and democracy.
Such a course of action (Some of the elements required for this kind of outcome we outline in the form of some Bullets here below). But this has to be preceded by implementation of certain plans and programmes to ensure that quality social consumption services and goods are made available to everyone on the basis of a rational and scientific plan (like one presumes needed for universalization of the Corona vaccine). Its advantage is that it is like mercy, something which is twice blessed. First it provides a very basis of citizenship and market participation. At the same time it productively absorbs a huge mass of persons into productive work for ensuring the supply of such services consisting of public goods as distinct from private or family goods and services essentials for livelihood.
The public goods time-bound universalization (which increases direct, immediate employment of service-providing personnel) may run counter to its objective if the task is entrusted to private –profit motivated agencies.IN fact,it would not be able to cover the people unable to pay for it. An essential point supply of quality public goods by public agencies based on the criterion of needs has to be the watch word. Its opposite the privatized, that is market-driven and ability to pay based services and goods are in the Indian conditions of massive adverse inclusion, a cover for denial and deprivation.
One way to find resources is to withdraw from public provision of personal/private goods and services. However, given the peculiarities of the food system in India, subsidized food has to be made universal essential item of food security. By local procurement at MSP and local storage in a Panchayat controlled Warehouse, based on district Food Budget, showing the surplus/deficit position may reduce over –centralization and avoidable warehousing, cross movements, transport and pilferage. Every farmer may make use of the Panchayat warehouse and get a negotiable Warehouse receipt ,against which bank advance may be given. It would increase marketable surplus, especially owing to subsidized public distribution of food and help improve nutrition, can reduce dependence on borrowing, etc. We need not go here into its detailed modalities. Combining this decentralized food storage system with pre-packaging of cereals in packets suitable for PDS at the Panchayat Warehouse would increase employment, may help reduce costs of distribution, wastage and pilferage and discipline the supply outlets.
Such a programme requires micro-level (village and habitat ) level action by decentralized local agencies funded out of the coffers of the national public agencies. The former have to be equipped for these tasks in terms of men, materials and money and funded, trained and empowered to undertake these tasks based on a comprehensive local resource and responsibilities mapping. A huge task indeed and may call for a reshaping of aspects of governmental and corporate functioning. It is a sure means to control inflationary ravages and make real welfare a practical outcome.
Project appraisal on equity, security and poverty and equality criteria as well as on ecological sustainability seem critical to social sustainability and has to be based on guaranteed living wage. Other wise investment and growth and productivity may well become another name for profiteering and swelling nominal incomes ! No licensing, yes, but several mandatory approvals have to be based on self-assessment and ex-post audit to justify the draft made on energy, land and social savings and ecological balance!
Agriculture has to be revamped. Organic farming, dry farming, water conservation, choice of cropping pattern based on water availability and introduction of new varieties, food processing by involving the farm hands for value addition, micro finance by SHGs, and extension services by simple trained Kisan Mitra for enhancing farm productivity, use of local educated youth for the purpose and measures to link up rural industries and services with farmers families, including the landless and marginal and small farmers, etc., may change the rural scene, especially because under the universalization of public services, specifically health, education, sanitation, intra-village roads and disposal of waste water, waste management, and so on.
For major public policies, say fiscal, monetary, foreign trade, credit creation, location etc.,the criteria for clinching choices must relate to the talisman: does it help improve the levels of living, well being and social participation of the ordinary citizen, including those not born so far. It has to be an exercise of creative destruction: removing the policies which do not pass the talisman and replacing them. A robust public debate on these issues is called for.
We do not want to make the list longer. Just reiterate the basic point: a grand switch over from the quantitative growth of output, that also without its appropriateness to the needs of the majority, involving them as partners and contributors from affordability, sustainability angles require. It calls for thorough re-tuning the markets, administration, democracy, public services, etc. from grandiose imitative production, technological structures to ones best suitable to reach those who need them the most, that is towards what the Great Freedom Movement of India strived for. A grand cultural overhaul of most of what has been done under attractive slogans so far is an absolute priority in order to make dignified work based livelihoods a birth right of every Indian citizen.
—
*Professor Economics (1980-2003), Indian Institute of Public Administration, New Delhi; Malcolm Adiseshiah Chair Professor (2010-2017), Economic Development & Decentralized Planning, Institute of Social Sciences, New Delhi
Experience has shown that many counties adopt measures to go in for the growth of their GDP, basically in the existing framework, though also going in for, at the same time, new products and technologies and similar other changes. It is believed that by means of this process enough new job opportunities would emerge to meet the economy’s needs both in terms of numbers as also in terms of the requisite remuneration (wages) as also the supplies of the goods and services to maintain the economy on an even keel. In case many adults do not find such a work opportunity, or the wage level is not adequate and assured the resulting situation would demand steps to provide either partial, fleeting relief or long term major interventions to increase and improve the conditions of the people willing to work. Such a situation of lack of conditions to absorb a part of the labour force willing to work may not enthuse the employers who make investment. The resulting condition of a buyer’s market for labour may increase the rate of return the employers may obtain. The resulting high rates of profit may further attract new investments and help increase profit. But labour surplus may remain intact. Often this situation may not be able to remove the mismatch between the supplies of and demand for labour. It may lead to less than full use of both the installed capital equipment and/or available labour supply. The state may have to intervene in such cases to maintain the macro-economic balance and social dissatisfaction and contain social unrest. It is also possible that the economy may be allowed to limp along with less than full use of the productive potential. Prevalence of such situations generates both unequal societies as also inadequately developed or unbalanced economies. Different countries with varying experience of this kind spawns an unequal, divided world.
For long India finds itself in such an unenviable situation. Let us look back at the experience of India over the past over seven decades. During this period the state along with the big private companies have been making vigorous efforts to increase the rate of growth of GDP of the country. It also expressed its intention to correct socio-economic imbalances and move towards a fair and just society.They have been trying large scale modernization and industrialization and creation of supporting infrastructure facilities. Some other efforts are also been visible to make good the disabilities, gaps and distortions bequeathed by the departing British Raj. However, ever since the time of the First Plan the intention to follow the course of GDP growth-led high productivity has been expressly chosen as a pragmatic course of interventions for development.
A bird’s eye view the story of how India has been doing shows that a lot has been done to increase the growth of big capital-guzzling industries. However the same unfortunately cannot be said about the demands and legitimate aspirations of the country’s vast and growing labour force. Yes many policies were announced and in part have been carried out as well. Growth rate, though fluctuating, has noted remarkable gains. But it seems pro- employment and pro-equity measures for decent work for everyone remains a distant dream. Later on following greater submission to the pulls and pressures of the rich and powerful who are eh major players in the growth game, mainly the private corporates, employment and equity receded in the background and the supremacy of the growth policies came to the fore much more boldly than before :the sign post of the neo-liberal era. For a pretty long time every year over 10 million new entrants to the labour force try to find a toehold in the work force. Many estimates about the huge reserves of wealth in the hands of a small super rich sections (both declared and hidden) indicates that just as there is a virtual glut in the labor market, similar glut can be seen in the coffers of the plutocrats. The crisis is that the gap between the needs and urges of the two polar opposite poles remains unbridgeable for a number of reasons which go beyond our present concern. The growth game lumbers on but the struggles for livelihood adequacy and security remain unrewarding for a huge majority.
It would add to the existing inequalities and thus further limit the market for the small and informal industries. The initial neglect of the decentralized small men essentially small town and rural industries, just like small farmer agriculture across the country received step-motherly treatment. Little wonder the “ half-real, half-illusory” services sector had precociously stolen march over the rest of the sectors. Thanks to the pro-rich farmer modern high tech agriculture India is bale to export food grains while the country remains high on global hunger/malnutrition index. In fact the creation of a growing marketable and marketed surplus is essential for creation of market for industries and services remains subdued.. The modern high tech industries heavily leaning on the external economic forces have contributed to the situation of Indi’s chronic balance of trade deficit, met by drawing on the capital account and the contributions of the Indians working abroad. Assured and adequately rewarding employment adds to equalities and creates basis for sustainability/ social desirability. A real self-reliant India. But the dream of the planners to adopt the pragmatic path seems to have floundered, with early signs appearing even by late 1950s. By mid-1960s the warning by many about the swelling tide of the people suffering the pangs of absolute poverty sounded global alarm bells.
What it means is that modernizing-industrializing Growth of GDP could not lead to the outcomes expected from it. Of course some stray attempts, right from land reforms to progressive taxation, to setting up of Pachayats and decentralized institutions and abolition of privy purses, nationalizations of banking and many key industries and, to cap them all, the much hyped Garibi Hatao and other rural development programmes of asset distribution, have been undertaken. Now a bunch of populist measures in new avatars galore: even some private goods are supplied by the state: Freebies are a new vote and support game.
However the stubborn fact remains. In an iniquitous society and economy Growth cannot guarantee adequate employment to gradually lead to the creation of a sellers labour market, that is, an era approaching a full employment situation except as frictional unemployment. In any case development cannot be justly treated as a mere quantitative economic phenomenon of very large and increasing production and has to address the social problems in their totality in small but self-sustaining sure steps over a reasonable period. Actually employment, equality, poverty reduction and environmental protection are very closely inter-related, These problems are also seen in very high income countries, say the Global North. Why does one miss the apparent truth!
A major part of such worse-off sections, of course, with their own stratified and caste and disparities-ridden character, working in farming, small and traditional, mainly village and small town industries, are able to make have low level of linkages with much larger outside markets. They largely meet local and regional demands: the forte of rural, cottage and handicrafts industries. Their incomes are low and uncertain and standard of living pitiable. Also they face innumerable uncertainties and insecurities. Also they get little public/social goods and services by the state, even recent policies are silen ton the universalization of these services and facilities to enable citizenship and market participation on a meaningful scale.. The question of their employment, if proper and adequate and assured, may help them overcome many other problems they face. It is in fact a primary condition for proper citizenship as members of civil society and participative development process.
It is exclusion from such employment, as described above, and as outsiders to the circles of formal, organized, better-off sections. Often they are placed in a portmanteau category called informal/unorganized economy with people eking out subsistence and as partly employed, partly or un- or under-employed. Their size varies according to the criteria and sources of data, but as a matter of consensus, it can be placed to cover about three-fourths of Indians. Regular organized sector employment, largely in the rich, urban and metropolitan areas or in remote, inaccessible areas where natural resources are located forces the employment-seekers to migrate and exposes them to many vulnerabilities with often hidden costs on the regions and rest of the stay -put members of the family from which people have to migrate. The simple point is employment is a many-faceted search for livelihoods and both physical and social lebensraum as the very essence of human existence. The incidental outcome of growth of production and the gains made by the organizers, investors-owners and managers and the public agencies hardly leave enough for the workers who are recruited, often through touts and contractors who also take their own cuts. The meaning of employment without a roof, home and hearth and adequate food and physical rest for the next day’s work are parameters the market economy – growth centric view of the economy, its growth as development perspective hardly concerns itself about. In the present exercise we take a humanistic, social and moral view of employment in a democratic society true to the Constitutional values and ideals. It is some such perspective which is implied when one speaks of decent employment as the relevant category.
Mahakavi Nirala said,
“Manav yahan bail Ghora hai,
Kaisa Tan-man ka Joda Hai.”
It is ironic indeed that even many highly industrialized rich countries, governed by democratically elected states, enjoying very high per capita GDP/GNP and dominated by mega corporate entities operating on the global scale, commanding humongous capital and potent productive resources in various forms and counted as developed economies and democratic societies are unable to provide regular, remunerative and secure participation to their labour force.(Rifkin, 2004). This situation may well be termed as one of adverse inclusion, as a feature of an essentially involutionary society. Even in cases where various forms of social security is provided, pucca and full decent employment may remain a far cry. This kind of situation comes to prevail irrespective of their enviable high levels of GDP/GNP, an electoral political system (based on each country’s history and culture) and a fairly comfortable place in the global market system. This kind of treatment meted out to the bulk of the work force is neither a recent nor an isolated phenomenon. In view of the foregoing, we may say that with persistent lack of employment to a reckonable part of the population, there comes to prevail high levels of inequalities (generally non-functional). The above two factors, among others, result in the creation of pockets of unacceptable poverty among some sections: the levels and spread of such poverty simply mock their high levels of total and per capita GDP. Nor have they been able to maintain a reasonable ecological balance. Thus overall, these countries seem to be bereft of the critical essential attributes of a developed nation/society (Dudley Seers).
As theoretical examination and empirical evidence show growth of GDP and social Indicators such as highand rising levels employment, increasing equality, reduction of poverty and better ecological balance do not always and necessarily move in the same direction. Certainly by itself GDP has little to do with normative issues and outcomes. Much depends on the specific policies and their relative priority compared to the policies directed towards pushing up the growth rate. Also important is the historical situation inherited by the country in question. If a country starts with a heavy backlog of the four main items of social malaise, as listed above, and follows policies to push up the rate of growth by giving precedence and priority to growth accelerating measures, the initial situation would further worsen (Harry Johnson).
One may note: We are not speaking of any drastic change to reduce initial bad situation as a precondition. But for the future the new, additional policies have to give emphasis on improving the lot of the lower sections, even if their net contribution to growth is small, but at least a net addition. India talked of many lofty ideals and a grand social-national vision (Nehru and Rajendra Prasad on 15th August 1947 in r the Constituent Assembly). But the policies and their implementation did not match with declared aims. It means the existing power balance was greatly potent and able to call the shots for its partisan purposes. On the contrary, the declared aims were given in practice an inferior position (Tarlok Singh). The likely beneficiaries were not able to, despite the democratic rights and numerical upper hand to get the policies calibrated in their favour.
True the journey of different countries towards such a state of development may be at various stages depending on the positioning and strength of the development friendly processes and institutions. It means the quantitative, economistic, status quo- centric, one-dimensional concept of growth as development stands in sharp contrast vis-Ã -vis the integrated multi-dimensionality of the holistic concept of inclusive development based on clearly stated value premises. It may be noted that the GDP/GNP centricity is generally used by most agencies as the sole over-riding criterion for the global ranking of nations on the metric of “growth as development”, irrespective of the levels and direction of unemployment, inequalities and poverty. The recently released Global Social Mobility Index, based on survey of 82 countries regarding six specific broader socio-economic indicators by the WEF may be taken to show a welcome departure from the socially disembodied one-dimensional indicator of GDP growth. (also Stglitz, Sen and Fitoussi report). Equality, employment, escape from poverty and ecological depredations may be taken as value-based comprehensive indicators of social wellbeing, justice and inclusion. They have to be treated as inalienable features of a developing democratic country.
One may wonder whether any tangible movement towards the three goals may be registered with a static or a declining level of GDP. As a general proposition, a positive thrust towards comprehensive scial development, the GDP of a country is likely to be higher. It is a point the advocates of de-growth may do well to ponder over. We do not wish to go into the complex question of whether or how to set off some of the four criteria vis-a-vis each other or the likely inter se conflict between them. The essential issue is that neither growth in isolation, that is, by itself, nor with sacrifice of any of the elements of the desirable four pillars can be considered a part of the traverse towards development. The de facto position of nominal GDP/GNP (as a business proposition is different from the de jure level of real GDP/GNP, as the livelihood proposition, see Veblen 1923) has far-going implications for development discourse in general and development and employment and equity policies in particular. This has been critically indicated in many writings either by implication or explicitly (Schmelzer, 2016, the report by Stiglitz, Sen and Fitoussi among dozens of other powerful critiques).
In view of the above let us look specifically at the Indian growth story and how it tended to worsen the employment, that is the livelihood adequacy and security of the common citizens. The market-centred ideas of employment seem to have rather limited relevance to the Indian conditions owing to the predominance of the informal sector as the main means to cater to the needs of people’s livelihood. Instead of livelihood adequacy and security the poor were defined as employed or partly employed on the basis of their willingness to opt for more work! or, efforts at scrapping a living by various means in a limited manner: often in terms of their survival level consumption of food with a given calorific value. The point of such exercises seemed to ensure that one may remain available for work at grossly inadequate sub-human level/ remuneration and the surplus garnered by the rich. This way the managers of the economy may count them “above the poverty-line”! These concepts/ideas/ policies betray the basic human needs and dignity, let alone rights the Constitution so eloquently upholds.
To sum up so far: We went into the above issues with a particular purpose; we think that given the prevalent Indian reality, nothing would be far from truth to consider the level and rate of growth of GDP/GNP as the sole, overriding indicator of India’s development. In fact, it may, in some cases, turn out to be the opposite of development. This is specially so with respect to the question of the four critical closely inter-connected dimensions of development ( viz, employment, equalities, exit from poverty and ecological balance). These four seem to have worsened despite (if not owing to) fairly high fluctuating rate of growth recorded by India’s GDP/GNP over the period of past over seven decades. What has emerged is a very large, often growing but highly imbalanced economy in which the huge majority has continually to face misery and privation (what Simon Kuznets considered the hall mark of backwardness) owing to disproportionately low access to the means of livelihood, as a small minority of plutocrats dominate the economy and polity and intensify myopic exploitation of non-renewable and renewable. An even deeper malaise connected with GDP paradigm is that in spite of the growth of the number of persons counted as ‘employed’/above poverty line, this assessment seems to be based on a particular apologetic set of ideas/ standards regarding whom to consider employed or non-poor (as discussed above). It can be seen that of the four inter-related cardinal dimensions of development, the content and implications of employment directly link up with equality, poverty and ecological balance seen at the ground level. In simple straight terms, growth resulting from priority provision of adequate and secure livelihoods on a reckonable scale (what Hicks has called ‘absorption’) contributes simultaneously to poverty reduction and equality. But growth without incorporating employment on a substantial scale as its principal contributor is likely to worsen the lot of the left-outs (Letouse). Moreover, balanced emphasis on the quantitative and social-institutional dimensions of improved/ enhanced productivity may well turn out to be eco-friendly as well. For comparative purposes we may mention in passing that primary emphasis on increasingly higher levels of growth as the be-all and end all of social endeavours is not unlikely to be injurious to the four social cardinal pillars of development, as discussed above.
Even for the growth of GDP many aspects associated with it have to be reckoned. Special attention would have to be devoted, inter alia, to the commodity composition and factor –intensity of growth, from the point of social, macro, regional, cultural and micro-level considerations. Similarly volatility, lop-sidedness, weaknesses and infirmities plaguing the estimates of growth, regional-sector-specific and international balance associated with the growth rates call for pointed attention.
Similarly the gulf between the declared/recorded or reported numbers of GDP on the one hand, and the actual ones on the other (which in fact become virtually unknowable for a number of administrative, political, corporate practices and global financial linkages related reasons) is becoming a highly critical aspect of both the state agencies and the private corporate sector entities as principal growth agencies. These kind of factors seem to subtract substantially from its real economic, social content, let alone the ethical dimensions of the growth of GDP.
Without going further into this aspect, at least for the sake of putting the record straight, we simply reiterate that it is tragic indeed that right from the word go Indian policy and development establishment adopted and claims to have practiced the pursuit of accelerated economic growth by means of catching-up industrialization as the principal element of the growth strategy. (See the first chapter of the First Five Year Plan, 1953). This was based on following in the footsteps of the rich Western countries who have already by mid-1950s attained high level of GDP and world domination with near monopoly of heavily capital and energy intensive technologies, multilateral global institutions and reliance on high quality educated experts. Even the supplies of increased output caters to the demand of the small number of the plutocrats, other rich and top-end middle classes, mainly in the urban and metropolitan areas; and thus lead to adverse inclusion.
In simple terms such growth of GDP is not capable of addressing what scholars call massive material misery and deprivation which is the other name of the living conditions of the majority of Indians. Only limited and inadequate measures have been taken to universalize the supply of public goods to enable people to participate in growth and democracy. Later liberalizing policy changes right up to the present day are continuation of essentially similar policies with greater freedom to the Indian and foreign big companies and their political-administrative cronies to spearhead the growth rate with hardly any positive bearing on the living conditions and livelihoods of the masses.
In view of the above we briefly examine the question of employment along with its close bearing on the other main dimensions of development as they emerges in India.
The indian scene: Gigantic livelihood deficit as the crux of employment/development challenge, some stylized facts
It is well-known that in India around 90 percent (according to the National commission on Unorganized Workers,2007) of the work force is outside the organized/formal economy. The earnings of most of the adults (except many of the owners of own-account enterprises and cultivators operating viable land holdings) engaged in it may fall short the minimum considered essential for survival, bringing up a family and to meet the emergency needs of a rainy day. According to the National Account Statistics, 2020 (online tables) private companies numbering a little over 11.50 lakh contribute gross output amounting nearly to Rs 175,96,952 crore in the year 2018-19, that is about 50.6 per cent of the nominal GDP. It shows that along with a disproportionately large share of the nominal GDP, the private corporate sector also commands an overwhelming proportion of the total reproducible wealth, i.e., the capital, used in the economy. Available evidence shows that it is the organized sectors which generates most of the GDP, or to which it accrues and consequently is utilized by it. On the other end is the unorganized, including the overwhelming part of agriculture (around 60 percent of labour force and around 15 per cent of GDP), which provides the wherewithal for subsistence level livelihood with little marketable surplus, and produces disproportionately low portion of the total GDP of India. The reality which is fleetingly captured by the some of the above stylized facts is grievously missed by the NSSO data on various types of ‘employment’ and consumption expenditure based on periodic sample survey data regarding labour use and expenditure from the respondents. It may be noted that the labour market in India is highly iniquitous buyers market in which the choice facing most suppliers of labour is between utter deprivation and irregular work at low level of monetary reward whose real purchasing power is steadily eroded by the ‘price-giving’ component dominating the national markets. To treat this data as employment data seems to be a cruel joke.It is rare indeed to come across analyses probing why there have been virtual riots around the recruitments camps for the military and paramilitary jobs; or, why for a handful of the low level government jobs there is an avalanche of the number of hopeful applicants; or, why huge total sums are collected by the government agencies which advertise vacancies and virtually ‘tax’ the hopefuls by way of fees for holding ‘tests’, but he process is not completed for years. The unending search for jobs has led to the mushrooming of thousands of coaching centres and publication of reading material for these tests. Unemployment as a source of employment is an abiding irony indeed! Have our job market experts cared to look into their rationale? The simple fact that for a number of years a little over ten million Indians annually enter the labour market while only a small fraction succeeds to find an entry. What are the cumulative implications of this hardly annual phenomenon of accumulating frustrations? Thanks to the onslaught of neoliberal ideology the freedom of the potential employers has been enhanced by granting them in advance the freedom of to ‘fire’ ! One wonders whether the newly acquired freedom to fire is just a Damocles’ sword to discipline the workers and job aspirants to accept whatever terms and conditions of work the employer decides to offer.
Roti and Rozgaar as “Ram”
Since the test of the pudding is in the eating, the test of employment makes sense when one relates employment to the adequacy and, regularity of wages, that is, to participation in development by means of decent employment. On this criteria one finds that a valuable source of one of the most reliable set of data have become available recently. We are speaking of the all India Socio-Economic Caste Census 2011. Its rural sector data only have been released so far. Arguably it is the most comprehensive census based data on the socio-economic conditions of the people ever since Independence. A synthesis of the facts brought out by the published Census data regarding rural India show that 65.8 crore people belonging to about 13.34 crore households in rural India ( out of the total of nearly 88 crore rural residents) reported that as many as about three fourths of the households belonged to the category in which the monthly income of the highest earner in the family did not exceed Rs five thousand. With the average size of the family being almost 5 persons, it means that the daily money available per person amounted to about Rs 34 at 2011-12 prices. Obviously the highest earner’s nominal income is often supplemented by that of the others as also by consumption in kind based on local conditions. At current prices comparable figure based on nth National Income statistics but also covering the urban sector, comes to Rs 176 in nominal terms. The urban average income has lately been about four times the rural average. One point must be noted: the SECC data we have cited above are far more realistic compared to other series based on sample survey concerning the consumption, employment levels regarding different recall periods. Compare these facts against some comparable facts for the mid-1950s, as reported by BS Minhas. He showed that at 1960-61 prices an expert group of eminent persons considered standard private consumption of Rs 240 per person per year at 1960 -61 prices a bare minimum. Against it he estimated, based on official data, that the actual figure was Rs 200 for about 17.3 crore rural Indians. It amounted to paisa 55 per capita per day! The 2011 -12 data come indicate that per rural Indian had at least 92 paisa per person per day at 1960-61 prices. Surely Minhas was not exaggerating when he described this situation as one of “infernal destitution”!Let us look at the agricultural scene as the direct and only life line of more than about half of the population of India. It includes mostly the small and marginal farmers, whose land holdings are below 3 acres each cultivator. They control over 80 percent of the land-holdings. All the farmers taken together contribute under 15 percent of the nominal GDP. The rest goes to the formal/corporatized/organized and the rest, including the non-farm informal economy. It also bears the imprint of gender, caste and regional situation, particularly in the rural and remote habitats. Out of a hugely complex and massive economy, society and polity we have hinted at some crucial aspects which indicate how massive, acute and often weakly acknowledged and unattended remains the question of adequate and assured livelihood, that is real and effective employment. Recall an American Scholar of repute, Thomas Paine, considered the responsibility of the democratic state to provide the means of livelihood to the citizens. The metaphor of “Roti as Ram” is nothing but the same story in our own Indian metaphor: as that of Roti and Rozgaar as Ram. In this way we identify regular decent employment as the principal means for the journey towards development. It makes employment the basic fulcrum of development : Achieve sustained high growth rate to enable over a foreseeable time period, not as a pre-condition but surely as one of the items of outcomes, all the adults to attain livelihood adequacy and security. This has to be the first and foremost item on the agenda of development. It is the stepping stone, followed by the later tasks towards further embellishment of both quality of work life, outcomes and livelihood and democracy.
Some Specific Elements of the Employment Agenda
Presenting a detailed blueprint of employment-centric development policy for real sabkaa saaath, sabkaa vikaas and sabkaa vishwaas, including the means, content resources and institutions, is too big a task for a paper. What we mean is to pitch for attainment of Sab ko employment based development over a short period of five years which would be reflected, among so many factors, in a healthy high rate of growth as well: that is growth by means of employment based development to generate the wherewithal for fuller family and community lives :clearly it is not attainable by means of growth per se as the major precondition. Briefly stated above this is as a part of multifaceted socially desirable outcomes centred around the four pillars we have mentioned above.Such a course of action (Some of the elements required for this kind of outcome we outline in the form of some Bullets here below). But this has to be preceded by implementation of certain plans and programmes to ensure that quality social consumption services and goods are made available to everyone on the basis of a rational and scientific plan (like one presumes needed for universalization of the Corona vaccine). Its advantage is that it is like mercy, something which is twice blessed. First it provides a very basis of citizenship and market participation. At the same time it productively absorbs a huge mass of persons into productive work for ensuring the supply of such services consisting of public goods as distinct from private or family goods and services essentials for livelihood.
The public goods time-bound universalization (which increases direct, immediate employment of service-providing personnel) may run counter to its objective if the task is entrusted to private –profit motivated agencies.IN fact,it would not be able to cover the people unable to pay for it. An essential point supply of quality public goods by public agencies based on the criterion of needs has to be the watch word. Its opposite the privatized, that is market-driven and ability to pay based services and goods are in the Indian conditions of massive adverse inclusion, a cover for denial and deprivation.
One way to find resources is to withdraw from public provision of personal/private goods and services. However, given the peculiarities of the food system in India, subsidized food has to be made universal essential item of food security. By local procurement at MSP and local storage in a Panchayat controlled Warehouse, based on district Food Budget, showing the surplus/deficit position may reduce over –centralization and avoidable warehousing, cross movements, transport and pilferage. Every farmer may make use of the Panchayat warehouse and get a negotiable Warehouse receipt ,against which bank advance may be given. It would increase marketable surplus, especially owing to subsidized public distribution of food and help improve nutrition, can reduce dependence on borrowing, etc. We need not go here into its detailed modalities. Combining this decentralized food storage system with pre-packaging of cereals in packets suitable for PDS at the Panchayat Warehouse would increase employment, may help reduce costs of distribution, wastage and pilferage and discipline the supply outlets.
Such a programme requires micro-level (village and habitat ) level action by decentralized local agencies funded out of the coffers of the national public agencies. The former have to be equipped for these tasks in terms of men, materials and money and funded, trained and empowered to undertake these tasks based on a comprehensive local resource and responsibilities mapping. A huge task indeed and may call for a reshaping of aspects of governmental and corporate functioning. It is a sure means to control inflationary ravages and make real welfare a practical outcome.
Project appraisal on equity, security and poverty and equality criteria as well as on ecological sustainability seem critical to social sustainability and has to be based on guaranteed living wage. Other wise investment and growth and productivity may well become another name for profiteering and swelling nominal incomes ! No licensing, yes, but several mandatory approvals have to be based on self-assessment and ex-post audit to justify the draft made on energy, land and social savings and ecological balance!
Agriculture has to be revamped. Organic farming, dry farming, water conservation, choice of cropping pattern based on water availability and introduction of new varieties, food processing by involving the farm hands for value addition, micro finance by SHGs, and extension services by simple trained Kisan Mitra for enhancing farm productivity, use of local educated youth for the purpose and measures to link up rural industries and services with farmers families, including the landless and marginal and small farmers, etc., may change the rural scene, especially because under the universalization of public services, specifically health, education, sanitation, intra-village roads and disposal of waste water, waste management, and so on.
For major public policies, say fiscal, monetary, foreign trade, credit creation, location etc.,the criteria for clinching choices must relate to the talisman: does it help improve the levels of living, well being and social participation of the ordinary citizen, including those not born so far. It has to be an exercise of creative destruction: removing the policies which do not pass the talisman and replacing them. A robust public debate on these issues is called for.
We do not want to make the list longer. Just reiterate the basic point: a grand switch over from the quantitative growth of output, that also without its appropriateness to the needs of the majority, involving them as partners and contributors from affordability, sustainability angles require. It calls for thorough re-tuning the markets, administration, democracy, public services, etc. from grandiose imitative production, technological structures to ones best suitable to reach those who need them the most, that is towards what the Great Freedom Movement of India strived for. A grand cultural overhaul of most of what has been done under attractive slogans so far is an absolute priority in order to make dignified work based livelihoods a birth right of every Indian citizen.
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*Professor Economics (1980-2003), Indian Institute of Public Administration, New Delhi; Malcolm Adiseshiah Chair Professor (2010-2017), Economic Development & Decentralized Planning, Institute of Social Sciences, New Delhi
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