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8/3/2019 Social_Democracy Pranab Bardhan
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1
Inequality,Inefficiency,andtheChallengesforSocialDemocracyinIndiasEconomicTransitionByPranabBardhan
I TheVariousInequitiesandDeprivations
Differentpeoplemeandifferentthingsbysocialdemocracy.Withoutgoingintothatdiscussion
letme
start
by
briefly
describing
what
Id
mean
by
social
democracy
in
this
paper
and
then
go
ontoanalyzingthevariouschallengesthattheIndianeconomyfacesinbringingitabout.
Socialdemocracyforthispaperhasthreeessentialingredients:
(1)Democracyprimarilyintheformofmeaningfulpoliticalcompetition,effectiveaccountabilitymechanisms,andsomebasichumanrights;
(2)Acompetitiveandincentivecompatibleeconomicsystemwithindividualpropertyrightswithinreasonablebounds,andeconomiccoordinationmechanismsprovided
bymarkets,multitieredgovernment aswellascommunityorganizations, with
thesemechanismsoperatingindifferentfieldsinmainlycomplementaryways;
(3)Aneffectiveandcomprehensivesystemofsocialprotectionforthegreatmassesofpeoplefromdeprivation,destitutionandvulnerabilitiestoindividualandsocialrisks
ofdifferentkinds.
InthispaperIshallkeep(1)and(2)largelyinthebackground,withoutagreatdealof
discussion,andlookatproblemsofachieving(3)underthecircumstances.EventhoughIam
fullyawarethatwehavemilestogoon(1)and(2),Indiaisatpresentparticularlyand
atrociouslydeficientin(3).Indiaistheworldslargestcountryofilliteratesandschooldropouts,
ofchildandmaternalmortality,largestnumberofstuntedandunderweightchildren,andthe
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largestincidenceofanemiaandTB,andtheoverwhelmingmajorityofpeoplelackinganyofthe
socialbenefitsthatareconsideredaspartofaminimumsocialsafetynet.Morethan400
millionpeoplehavelessthanwhatbyIndianofficialstandardswillbeconsideredthebarest
minimumpovertyline.Ifonetakesincomeinequality,orwhatismoreimportant,inequalityof
economicopportunity,Indianinequalityisoneofthehighestintheworld,contraryto
conventionalwisdom.InacountrylikeIndiainequalityofopportunitylargelydependson
distributionofland,ofeducation,andsocialidentityachildborninarurallandlessadivasi(indigenous)familywithverylittlescopeforeducationwillbeseverelyhandicappedinherlife
chancesfornofaultofherown.
ItmaybewellknownthatlanddistributioninIndiaismuchmoreunequalthan,say,inChina
(thisis
partly
because
India
has
amuch
larger
landless
population).
But
most
people
seem
to
beunawarethatIndiaseducationalinequalityisoneoftheworstintheworld.Ifonemeasures
thisinequality,verycrudely,justbylookingattheyearsofschoolingintheadultpopulation,it
isworsethanthatinalmostallLatinAmericancountries,andsomeAfricancountries,notto
speakofChinaagain,thisispartlybecauseofIndiaslargeilliterateandnearilliterate
population.Takingalongview,whatismoreimportantthanstaticinequalityisinter
generationalmobility.Onthisquantitativeempiricalworkisratherscanty,butsocialmobility
maybe
particularly
low
in
India,
partly
no
doubt
because
of
the
deadening
legacy
of
the
system
ofcasteoppressionanddiscriminationinIndia(thoughthereissomeevidencethatsocial
mobilityisimprovingforsomeofthelowcastes).
Somepeoplethinkthatpreoccupationwithissuesofinequalitydeflectsattentionfrom
economicgrowthwhichiswhatmainlyalleviatespoverty,throughcreatingnewandbetterjobs
andgeneratingmorepublicrevenueforwelfareprogrammes.Buthowmuchofgrowthtrickles
downtothepooritselfdependsoninitialinequality(forexample,ithasbeenestimatedthat
thesameonepercentriseingrowthreducespovertybymuchlessinIndiathaninChinapartly
becauseofthehigherinequalityinIndia)andtheresultantdistributionofeconomicand
politicalpower.Besides,inequalityofopportunityitselfcanhaveseriousadverseeffectson
economicgrowth.Thisisparticularlyimportantwhentherearebarriersfacedbythepoorin
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landandcapitalmarketsandinskillacquisitionandincopingwithrisks,whichsharplyreducea
societyspotentialforproductiveinvestment,innovation,andhumanresourcedevelopment.
Theyoftenblockthecreationofsociallymoreefficientpropertyrights(forexample,inland
tenure)andinvestmentinhighriskbuthighreturninnovativeprojectsonthepartofsmall
producers.Inequalitythatkeepstheworkforcelargelyuneducatedandunhealthycannotbe
beneficialforprivatebusinesseither,apartfromthelawandorderproblemsthatinequality
generatedconflictsmaybringabout.Moreover,institutionalstructuresandopportunitiesfor
cooperativeproblemsolvingareoftenforegonebysocietiesthatarehighlypolarized.
SociologistshavenotedhowextremelyhierarchicaltheworkorganizationwithinIndian
factoriesis(oftenreflectingthesocialstratificationoutside),andthisisnotunrelatedtothelow
productivityofIndianfirmseveninsimpleproductionprocessescomparedtoothercountries,
andthesocialdistanceanddistrustbetweenmanagers,supervisersandjobbersontheone
handandthegreatmajorityofworkersunderminethecooperationthatisneededfordayto
dayshopfloorinnovationsthatcharacterizemoreproductiveworkplaces. Equityandefficiency
thusoftengotogether,contrarytotheoppositepresumptionofmuchoforthodoxeconomics.
Apartfromseveredeprivationsandhighinequalityofopportunity,anotherfeatureofthe
economythatraisesspecialchallengesforsocialdemocracyinIndiaisthatofallthemajor
developingcountries
India
has
the
largest
informal
sector,
with
94
per
cent
of
the
labour
force
workingthere,mostofthemdailyfacingthebrutalinsecurityofnoretirement,disability,
unemploymentorhealthbenefits. Evenoutsidetheagriculturalsectormorethan80percent
ofthelabourforceisintheinformalsector.Thetinyminorityofformalsectorworkers(two
thirdsofthemgovernmentemployees)clingontotheirpaltryprivilegeswithnervousmilitancy,
astheyfacethesocialvertigooflookingonthevastmassesoftheunprotectedhuddleddown
below.Thisgreatvoid,theabsenceofevenarudimentaryframeworkofgeneralsocial
assistance,makes
the
implementation
of
social
protection
as
difficult
as
it
is
urgent.
Theprocessofeconomicgrowthinaworldofglobalcompetitionhasmadethisworkeranxiety
andinsecuritymoreacute.Evenwhenmarketcompetitiondoesnotleadtonetjobloss,it
usuallycausesagreatdealofjobchurninganddisplacement.Eveninrichcountrieswith
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relativelyweaksafetynets(liketheUS,incontrasttotheNordiccountries)thisleadstostiff
workingclassoppositiontoglobalcompetition.Thereissomeevidencethatincreasedglobal
competitioninthelasttwodecadeshaswipedoutsomeofthelowproductivitytinyinformal
firmsinIndianmanufacturing,whomayhavethencrowdedthenontradedsectors.Itisnot
surprisingthatinIndiawhereanysafetynet(outsidethediminishingsupportofextended
familiesandkinshipgroups)isabsentfortheoverwhelmingmajorityofpeople,mostsurvey
evidencesuggeststhatmarketreformsarevastlyunpopular.Yetthesereformsareimportant
foruncloggingthechannelsofentrepreneurship andinnovation.
Thematterismademuchworsebythefactthat,unlikeinChinaandVietnamwheretheinitial
growthspurthasbeeninlabourintensiveindustries,inIndiathesuccessstoriessofarhave
beenlargely
in
skill
intensive
(software,
business
processing,
pharmaceuticals)
or
capital
intensive(machinetools,vehiclesandcarparts)sectors,andasaresultthehigheconomic
growthhasnotresultedinalargeexpansionofjobprospectsforpoorunskilledworkers.The
publicpolicydeficienciesineducationandskillformationhavealsolimitedtheemployabilityof
thepoorworkersinmanyofthenewjobs.
Agrowthpatternthatisskill andcapitalintensiveobviouslyexacerbatestheproblemof
inequality.Inadditionthereisapeculiarbimodalityinthesizedistributionofmanufacturing
firmsinIndia;mostfirmsarebunchedatthelowerendwithverylowproductivity,paying
extremelylowwages,whereasatthehigherend(withamissingmiddle)ofthefirmsize
distributionwagespaidaremuchhigher.Thislargewageinequalityinthesameindustryadds
ontotheinequalitybetweencapitalandwageincomes.
Ontopofallthistherearetheusualprocessesofagglomerationeconomiesofscaleintheearly
stagesofgrowthwhichleadtoregionalandsectoralconcentrationresourcesandcapital
moveto
growth
poles,
the
poorer
areas
fall
behind.
The
large
urban
growthdriven
by
such
agglomerationforcesthatIndiaisexpectinginthenexttwodecades,withtheurban
populationexpectedtoreach600million,willenhancethisinequality,apartfromstrainingthe
urbaninfrastructuretonearbreakingpointandstokingthenativistforcesinbigcitiesin
resistancetolargescalemigrationfromtherestofthecountry.Yettheproductivitygap
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betweentheruralandurbansectorsorbetweenagricultureandmanufacturingandservicesis
solargethatsuchtransitionwillbeinexorableintheprocessofeconomicgrowth.Insituations
whereeconomicgrowthinvolvesextractionandprocessingofmineralsfromlandcurrently
belongingtotheindigenouspeopleofIndiawhoareuprootedintheprocess,oracquisitionof
landingeneralfromthepeasantsforcommercialandindustrialdevelopment,agreat
distributiveconflictisalreadyshapingup,oftenturningintoviolence,ultimatelyturningonthe
questionoftheappropriatedistributionofthelargerentalincomefromscarceappreciating
resources,nowaccruingdisproportionatelytothecorporateoligarchy,realestatetycoons,the
miningmafia,andtheirpoliticalpatronsandcollaborators.
Itisinthislargercontextofthemountingforcesofinequalityanddisplacement,theneedfor
organizingaviable
system
of
social
protection,
already
rather
enormous,
is
all
the
more
desperate.
II ApproachestoSocialProtection:ACriticalAppraisal
Inthe
Indian
discussion
there
have
been
different
approaches
to
the
question
of
how
to
tackle
socialprotection.Averypopularapproachthesedaysistocouchitintermsofrights(tofood,
education,information,jobs,etc.),andthereisagreatdealofcommendableactivismonthis
front,andalreadysomeachievementstoshow,particularlyinthelandmarklegislationsonthe
righttoinformationandtoworkonpublicworksprojects(thoughtheirimplementationin
manystatesareasyetratherslowandfeeble,andfacingagreatdealofresistancefrom
bureaucrats,contractors,etc.).Thisapproachcan,attheminimum,servetoraise
consciousnessamong
the
poor
and
vulnerable
about
their
entitlements,
asense
that
they
are
notmeresupplicantstothepoliticiansorbureaucrats,thatifthelatterfailthereisaccessto
courtstoenforcetheserights,andpublicinterestlitigationandcourtinjunctionsonthese
mattershaveattractedagreatdealofattention.
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Butatthesametimeoneshouldrecognizesomelimitstothisrightsbasedapproach.Ifthe
deliverystructureforimplementingsomeoftheserightsremainsasweakandcorruptasitis
now,merepromulgationofrightswillremainhollowandwill,afterapoint, generateagreat
dealofcynicism.Indianpublicarenaisalreadylitteredwithhundredsofunenforcedor
spasmodicallyenforcedcourtinjunctions,andthereissomedangeroftheproliferatingjudicial
activisminstretchingtheinterpretationoftheconstitutionalrighttolifeendingup,forallits
goodintentions,inunderminingthecredibilityandlegitimacyofthejudiciaryitself.
Forexample,iftherighttofoodisexertedwithnoconsiderationoftheefficiencyandcost
effectivenessofthewaysofimplementingit(likethecurrentPublicDistributionSystemPDS
whichinmanystatesisanenormousprojectoftheftandwastagearoughestimateisthat
lessthan
aquarter
of
the
subsidized
foodgrains
reaches
the
poor),
it
is
an
unwarranted
and
unfairburdenontaxpayerswhofundthegallopingcosts.Inanycasetheprogrammeas
currentlyadministeredisweakestinthepoorestregionsthatneeditmost.Foodstampsthat
havebeenadvocatedfromtimetotimewillreducesomeofthewastageandtheftinthe
storageanddistributionbypublicagencies,butwillnoteliminatetheproblemsof(a)fraud
rampantinnonuniversalmeanstestedtargetinglikethattobelowpovertyline(BPL)people
and(b)thedevelopmentofsecondarymarketswheremerchantsbuyupthestampsin
exchangeof
some
(smaller)
cashin
which
case
you
might
as
well
directly
give
people
cash
ratherthanstamps. TherecentRighttoEducationActdoesverylittleforthepoorqualityand
quantity ofeducationservicesactuallyprovidedingovernmentschools(thatdrivechildrento
privateschoolseventhoughteacherstherearebyandlargelessqualifiedandlesswellpaid)or
aboutthenegligencewithwhichthenewpoorstudentsfoistedontheprivateschoolsarelikely
tobetreatedwithoutaproperqualityevaluationofschoolsinplace,ortheremedialeducation
thatthepoorperformingchildren(atprivateorgovernmentschools)andtheschooldropouts
desperatelyneed.
ThecurrentEmploymentGuaranteescheme,thelargestofitskindanywhereintheworld,for
allitsflaws(whichwouldhavebeenfarlessifaregularandinstitutionalizedsystemof
independentsocialauditswereinplace),providesapossiblefallbackoptionformanyable
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bodiedruraladultsforworkingonmostlyconstructionprojectsforaperiodof100daysevery
year(thoughthislimitof100daysandtimelypaymentofwageshavesofarbeenreachedonly
inveryfewareas),andthismayhavealreadyexertedsomepositiveindirecteffectsontherural
wageearnedbythepoorestpeople.Thisis,ofcourse,quitedifferentfromtherighttojoboften
demandedbyorganizedworkersintheformalsector. Therighttojob,ifnarrowlyinterpreted
asthesecurityonagivenjob,canconsiderablydistortthelabourmarket,ifitfreezestheability
oftheemployer(publicorprivate)toadjusttochangingconditionsintechnologyormarket,
thushurtingthewholeeconomy,andthejobprospectsoflessprivilegedworkers.Itisvery
importanttodistinguishbetweeneconomicsecurityandjobsecurity. Aworkershouldhavetherighttoexpectfromsocietygeneraleconomicsecurity,butnotsecurityonagivenjob.Myown
empiricaljudgment,however,isthatstringentlabourlawsthatareaimedatensuringjob
securityinlargeindustrialfirmsmaynotbethemostimportantconstraintonIndianindustrial
growth;otherconstraintslikeinfrastructure,creditandmarketingmaybemoreimportantin
manycases,butthattheyconstituteaconstraintcannotbedenied.Thereisultimatelyno
alternativetoapackagedealbetweenemployersandorganizedworkers:allowingmore
flexibilityinhiringandfiringhastobecombinedwithareasonableschemeofunemployment
compensationoradjustmentassistance,fromanearmarkedfundtowhichemployersand
employees
should
both
contribute.
No
Indian
politician
has
yet
gathered
the
courage
or
imaginationtocomeupwithsuchapackagedeal.
Thedistinctionbetweeneconomicsecurityandsecurityofaparticularjob(usuallyintheformal
sector)alsobringstotheforegroundaparticularconflictamongworkerswhichorganizedtrade
unionswouldratherslurover.ItiswellknownthatsocialdemocracyinWesternEuropecame
outofahistoriccompromisebetweencapitalandlabour(thelattergetssociallyprotectedand
areasonableshareoftheeconomicpie,andinreturngivesupitsdemocraticpowerof
expropriatingthe
former,
so
that
it
can
carry
on
its
innovations
that
expand
the
pie).
In
India
wheretheinformalsectorismassive,socialdemocracymayrequireanadditionalimplicit
compromiseinthelabourmarket,betweenformalandinformalworkerssinceinmanyways
theirinterestsmaybeinconflict(oneexampleisstringentjobprotectionofformalworkers
maybeattheexpenseofthepotentialexpansionofjobpossibilitiesforinformalworkers;
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anotherexampleisthatthegeneralstrikesandbandhsfrequentlycalledbyformalsector
unionsaspartoftheirorganizationalmuscleflexingparalysecitylifeandrobthedailyinformal
workersandstreetvendorsoftheirsubsistence).Besides,thestrongestorganizedworkersare
thoseinthepublicsectorservices,anditistheircorruptandcallousservicenondeliverywhich
thepoorinformalworkersaspotentialrecipientshavetofaceeveryday.
Ingeneraloneshouldnotlookatthesocialprotectionrightsinabstractionfromcosts(direct
andindirect),deliverymechanismsoreventheirpoliticalconstituency.Welldesigned,well
administered,costeffectiveprogrammesofimplementingsomebasicrightsgeneratemore
politicalsupportevenamongthosewhoarepayingforthem.Oneshould,ofcourse,mention
herethatonepositiveimplicationoftherightsapproachisthatofuniversalprinciplesand
standards,which
in
some
cases
may
help
better
administration.
For
example,
it
has
been
pointedoutthatthePDSforfoodgenerateslessmalfeasancewhenitisuniversal(asinTamil
Nadu);aswehaveindicatedbefore,whensomepeopleareexcludedunderatargetedsystem
ofdelivery,itleadstodualmarketsandmoreincentivesandopportunitiesforfraud,apartfrom
erodingitslargerpoliticalsupportbase.
Onuniversalisticprincipleofsocialprotectiononeofthecleanestandleastincentivedisruptive
ideas,both
ethically
and
economically
compelling,
is
that
of
Universal
Basic
Income
(UBI),
under
whicheverybody,richorpoor,getsanunconditionalannual(orperiodic)incomesupplement.
Thisisanoldidea,originallyinspiredbysomeEuropeanutopiansocialistsinthe19th
century,
triedunsuccessfullyinMcGovernsPresidentialcampaignintheUSAintheformofaproposed
demogrant,currentlysupportedbysomeGreenPartiesinEurope,andactuallyimplemented
innonsocialistresourcerichAlaskasince1999(intheformofanannualPermanentFund
Dividend).IntheWestthediscussioninoppositiontotheideausuallycentresaroundthe
encouragementthis
may
give
to
idleness
and
dependency
and
the
unfairness
of
ahandout
to
therichaswell.Ithinkweneedtoworrylessaboutidlenessinacountrywherethe
overwhelmingmajorityofthepeopleareextremelypoorandoverworked.Givingtotherichas
wellmaybefoundadministrativelytolerablebymanywhoknowtheformidableproblemsof
monitoringandcorruptioninIndiaintryingtotargetitonlytothepoor.Themainquestionis:if
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wewantittobeuniversal,canweaffordit?Ofcoursetheanswerdependsontheamountto
begivenout,ifthiswillbeareplacementfortheexistingtransferprogrammeswhichhavealot
ofwastageandmisappropriation,howtheproblemofmisappropriationofthebasicincome
supplementwillbehandled,etc.Letsmakesomebackoftheenvelopecalculations.
Supposeinacountryof1.2billionpeoplewewanttogiveouteveryyearRs.5,000toeach
family(assumedtohave5members).ThisamountstoRs.120thousandcrores(notcounting
administrativecosts,whichneednotbelarge,withelectronichelp).Letsassume,forthetime
being,thatwiththeforthcominginstallationoftheelectronicUniqueIdentificationSystem(UIS)
theadministrativecostsofthisunconditionaltransferprogramwillbeminimal.Letsnow
comparethissumofRs.120thousandcroreswithsomebenchmarkfigures.Thetotalestimates
ofhowmuchiscurrentlyspentbythegovernmentonalltheantipovertyprogramscombined
easilyexceedthisamount.Whatismoreimportantisthatthisamountismuchlessthanthe
totalsubsidiesthegovernmentgivesouttotherelativelyricheveryyear.Wedonothaveiron
cladestimatesofthelatter.TheNationalInstituteofPublicFinanceandPolicyhasfromtimeto
timeestimatedthetotalamountofsubsidies(implicitaswellasexplicit)givenoutbythe
centralandthestategovernments.Thiscomestoabout14percentofGDPeveryyear.These
subsidies
are
classified
into
merit
and
non
merit
subsidies.
Without
going
into
the
intricacies
ofthedefinitions,letussay,veryroughly,thatthenonmeritsubsidiesmostlygotothe
relativelyrich.Ofthe14percentofGDPintotalsubsidies,roughlytwothirdshavebeen
estimatedtobenonmeritsubsidies:thatcomestoabout9percentofGDP.Letusmakea
conservativeestimateandbringthisfiguredownto6percentofGDPasgoingtotherelatively
rich.In200910theannualGDPofIndiawasaboutRs.4500thousandcrores(at20045prices);
6percentofthiscomestoRs.270thousandcrores.Sowhatthegovernmentpaysoutas
subsidies
every
year
to
the
relatively
rich
is
more
than
twice
the
amount
itll
need
to
pay
out
a
basicincomesupplementofRs.5,000toeachfamily,richorpoor.Andifthisreplacessomeof
theexistingdysfunctionalprogrammes(likePDS)ornotveryeffectivecashtransfer
programmes(likeSGSYSwarnajayanti GramSwarojgarYojanaorIAYIndiraAwasYojana),
theincomesupplementscanbeevenlarger.Allthisisbasedonaveryroughandready
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calculationandoneshouldnottaketheestimatestooseriously,butitgivesussomesenseof
proportion.
Butarethepossibilitiesofmisappropriationthatafflictmostsocialprotectionprogrammesin
IndiaseriouslylowerwiththebasicincomesupplementideafortifiedwithUIS?Ifthemoneyis
depositedinanaccount(atanearbypostofficeorbank)fromwhichwithdrawalsrequirebio
metricidentification,andnomeanstestingorrichpoorclassificationisnecessary,manyofthe
currentproblemsoffraudandcorruptionandmanipulationofBPLcategoryarelikelyto
diminishconsiderably.Yetonecannotruleoutpossibilitiesofclerkswhodissuethewithdrawn
moneydemandingbribes,orlocalmusclemenregularlyextortingsomeofthecashfromthe
defenselessrecipient(likerobbersinmanycountriestakingtheirvictimstotheATMmachines
andforcingwithdrawals).Ofcourse,whenPDSgivesapoormansubsidizedfoodthatcanalso
berobbedandsoldinthemarket,butIsupposethelureofdirectcashmaybestrongerforthe
criminals. Similarly,chancesofalcoholicsanddrugaddictrecipientsblowingthecasharea
problemthatworriesmanycriticsofsuchprogrammes.Ofcoursetherearetwokindsof
reactiontothis.Onekindisthelibertarianone,sayingthatweshouldletpeopledecidehow
theywanttospendthemoney,bearingtheconsequencesoftheirdecisionispartofthe
responsibility
that
every
individual
has
to
take,
etc.
The
other
is
the
soft
paternalistic
kind,
tryingtominimizetheproblembyhandingoverthemoneytotheusuallymoreresponsible
femaleadultinthehousehold,devisingallkindsofgoodspecificvouchers,etc.Inacountry
wherewomenandchildrenareamongthemostdeprivedintheusualwayahouseholdisrun,
andchildandmaternalmortalityandmalnutritionareamongtheworstintheworld,concerns
abouthowunequallytheunconditionalcashtransferisspentbythefamilyaretobeexpected
andthemattermaynotbeleftsimplytothemercyofindividualresponsibility.
Moreimportantly,justhandingovermoremoneytothepoorresolvesonlypart(thefinancial
part)ofthesocialprotectiontheyneed.Aspettyproducerstheyalsoneedotherkindsof
assistance(knowledge,skills,marketingconnections,etc.)oraspatientstheyneedinformation
aboutdoctorquality,healthpractices,nutritionandsanitation,andsoon.Intheurbanslums
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wheretheruralkingroupsupportstructuresareweaker,socialprotectionhasalsotoinvolve
activesocialsupportstructuresagainstviolence,drugs,familybreakdowns,juvenile
delinquency,etc.
InanycaseitisprobablyhighlyunrealistictoexpectthattherelativelyrichinIndiawilleasily
giveuponmuchofthesubsidiestheyenjoyorthatthevestedintereststhathaveaccumulated
aroundlongstandingwastefulprogrammeslikePDSwillallowanythingmorethanmoderate
tinkering.Soproposalslikeunconditionalcashtransfersoruniversalbasicincomesupplements
areunlikelytoflyinthepoliticsoftheforeseeablefuture,asthequestionofcanweafford
suchprogrammes?willremainunderthosepoliticalconstraints,eventhough,aswehaveseen,
inprincipleitisresolvable. Newprogrammesofsocialprotectionwithagreatdealoftargeting
(withlowercostsbutalsomoreleakages)andsomeadditionalgarneringofresourcesaremore
likelytobeimplemented.Oneclassofsuchprogrammesisthatofconditionalcashtransfers,
withtheaddedweaponofUIS.InsomesensetheRuralEmploymentGuaranteeisonesuch
programme,ofcashconditionalonwork,withselftargetingsavingsomeadministrativecosts
andleakageasthenonpoorwillnotusuallywanttoworkonsuchmanual,oftenback
breaking,constructionworks.UISmayreduceagreatdealofcurrentleakageintheformof
false
muster
rolls
of
workers.
In
the
delivery
of
social
services,
nothing
on
the
scale
of
OportunidadesinMexicoorBolsaFamiliainBrazilhasyetbeenattemptedinIndia.Mostofthe
conditionalcashtransferprogrammesfortheseservicesinIndiahavebeenrelativelysmalland
aimedatensuringthesurvivalofgirlchildren(andtheirmothersatthetimeofbirth),andtheir
continuededucationinschoolsandinraisingtheirageatmarriage.Wedonotyethaveenough
rigorousevaluationoftheseprogrammes.
In
general,
the
main
presumption
of
conditional
transfer
programmes
is
somewhat
paternalistic:lefttothemselvesthepoordonotexertenougheffortinsendingtheirchildrento
school,healthclinics,immunizationcenters,etc.Sotransferprogrammestrytoinducethem
withcontingenttransfers.Thereisalargeadministrativecostinmonitoringandenforcingthe
stipulatedconditions.Inanycase,suchdemandsidedinterventions(inducingthepoorto
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demandtheservices)donotsolvethesupplysideproblemswhicharesevereinIndia:not
enoughschoolsorhealthclinics,facilities,qualityteachersordoctors,teacheranddoctor
absenteeism,etc. Ofcourse,onthesupplyside,ourbureaucracyisoftennotmindfulof(or
interestedin)thefactthatthegovernmentmaybethefinancierbutneednotbetheactual
supplierandcanworkoutallkindsofinnovativesolutions.Forexample,itcanfinancethe
educationservicesbutoutsourcesomeofthem(asinthecaseofcharterschoolsintheUS);just
asinthecaseofPDS,theFoodCorporationofIndiacanoutsourceitswarehousingtoprivate
companies,insteadoflettingitsprocuredgrainsrotoutside(aboutonequarterofthetotalin
recentmonths)forlackofpublicwarehousingspace.
III GovernanceIssuesinSocialProtection
Intheprevioussectionwediscussedtheprosandconsofdifferentapproachestosocial
protectionintheIndiancontext.Inthissectionwediscusssomegenericgovernanceissuesthat
ariseinanyschemeofsocialprotectionandareparticularlyacuteinIndia.First,letustakeup
thedeliverymechanismitself.Iftheservicesaretobeprovidedbythegovernment,arethere
enough
incentives
on
the
part
of
the
bureaucracy?
In
the
Indian
civil
service
(which
has
often
beendescribedasneithermuchserviceorientednorverycivil)rewardsarenotingeneral
performancebased,promotionsareoftenmainlysenioritybased.Frequenttransfers,
sometimesarbitrarilydeterminedbythepoliticalbosses,discouragethedevelopmentofany
stakeinanyparticularlocalityofservice.Badperformanceisveryseldompunished;inanycase
themeasurementofperformanceisnoisyparticularlywhenthequalityofserviceis
necessarilymultidimensional.Thispromotesarampantcultureofimpunity.Theschool
teachers
and
doctors
and
nurses
are
not
punished
for
the
dereliction
of
their
duties,
their
salariesandpromotionsaredecidedfromabove,notbythelocalpeoplewhobearthebrunt.
Thisobviouslysuggeststheneedfordecentralizationandaccountabilitydownwards.Infact
thereissomeevidencethatinsomecases(e.g.inNagaland)whereevenaverysmallfractionof
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theteacherssalarywaspaidbythelocalpanchayatorvillagecouncil,itimmediatelyledtoa
significantimprovementinservices.ButinmostpartsofIndia,whilelocalelectionsarenow
regularlyheld,effectivedecentralizationismissing,onaccountofaseveredearthofdevolved
fundsordelegatedpowerorappropriateprofessionalpersonnel.Localelectionsareusually
foughtonsupralocalissues,andmoreoftenthannotthestatelevelpoliticiansand
bureaucratshijacktheprocessofmandateddevolution.Suchhijackingismadeeasierbythe
lackofinnerpartydemocracyinalmostallpoliticalparties,sothatlocalpoliticalleadersareat
themercyofthehighertierleadership.IthasnotbeenwidelyrecognizedinIndiahowthelack
ofinnerpartydemocracy,apartfrommakingpoliticalpartiesstructurallyundemocratic,hasthe
sideeffectofcorrodingthevitalsoflocaldemocracyinIndia.
Thesituationisparticularlyironicinthecities,wheretheelectedmunicipalgovernments,while
presidingoverareaswheremuchoftheboomingwealthofIndiaiscreated,haveneitherthe
autonomynortherevenuestosignificantlyimprovethequalityorquantityofmunicipal
services.Theelectoralprocessalsoencouragespoliticalclientelism,politiciansfinditeasierto
lurevoterswithpromisesofprivategoods(say,colorTVsetsorloanwaivers)thanthoseof
longtermimprovementofpublicservices(say,qualityofschools).Bothcapture(bythelocal
elite
and
the
state
level
parties)
and
clientelism
have
ensured
that
local
democracy
remains
the
weakestpartofIndiandemocracy.
Therearesomeextraincentiveandstructuralissuesinhealthservices(qualitativelysome
similarissuesarisealsoineducationornutritionprogrammes).Atthemomenthealthcarein
Indiaisprimarilyprivate(andlargelyunregulated).Householdsurveydatasuggestthat85per
centofallvisitsforhealthcareinruralareas,evenbythepoorestpeople,aretoprivate
practitioners.
While
the
poor
quality
of
service
in
public
clinics
and
hospitals
(and
absenteeism
bynursesanddoctors)oftendrivepatientstoprivatedoctors(someofthemquacksorcrooks),
insomecasesevenwhenthepublicservicesareavailable,thepatientsprefergoingtoprivate
medicalpractitionerswhomorereadilyobligethemwithunnecessaryantibioticsandsteroids.
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Thepublichealthdeliverysystemisafflictedbypoorproviderincentives,coupledwithlow
accountabilitytothepatients.Themedicalpersonnelarepaidafixedsalaryindependentofthe
numberofpatientsoroftheirvisits,sotheyhavenoeconomicincentivetoservetheminthe
publicclinic(theyhavealltheincentivetoaskpatientstocometotheirprivatechambersfor
paidserviceandsendthemforunnecessarydiagnostictestsatlabsinwhichtheyhavea
monetaryinterest).Thepoorhaveverylittleorganizedvoiceinsanctioningtheerrant
provider.Theyareassertiveinelections,butevenalocalelectionisabluntinstrumentof
sanctionforanyparticularservice:electoralplatformsaremultidimensionalwherespecific
grievancesaboutanyparticularpublicserviceprovidergetdiluted,oftenbylargerstatewide
issues.Inaddition,comparedtocurativemedicalservices,theIndiansystemisparticularly
deficientinsystematicplanninganddeliveryofpreventivepublichealthservicesorsustained
programmesoflargescalediseasecontrol(thepublichealthadministrationinTamilNadu,I
understand,isamajorexception).Oneofthecostviabilityproblemsforanypublichealth
insuranceserviceforthepoorinIndia(liketheasyetfledglingprogramme,RSBYRashtriya
SwasthyaBimaYojana thatissupposedtocoveruptoRs.30,000forhospitalizationrelated
expensesforBPLfamilies)isthatthepoorinmostcasesgoforhospitalizationwithillnesses
(likediarrhoeaortyphoidormalaria)whichcouldbepreventedbybasicpublichealth
programmes
like
provision
of
clean
drinking
water,
sanitation,
spraying,
etc.
Thus
the
deficienciesofpublichealthadministrationinIndiaincarryingoutitsprimarydutiesmake
healthcareinsurancesocostly.
Outsideofgovernmentorprivateprovisionofhealthservicestherecanbeotheralternatives.
SeveralNGOsinIndia,aspartoftheirdevelopmentprogrammes,haveinitiatedcommunity
healthinsuranceschemesforpoorpeople,oftenlinkingupwithaninsurer(withalargerrisk
pool)andpurchasinghealthcarefromanexternalprovider.SEWAinGujaratisanimportant
exampleof
organizing
community
health
insurance
for
its
members
and
their
families
in
this
way.Thisandothersimilarmodelsneedtobestudiedandreplicatedinamuchlargerscalein
workerassociationsandcooperativesinIndia,particularlyintheinformalsector.Inthehistory
ofGermansocialwelfareprogramsworkerassociationsplayedaleadingrole.InIndiawhere
theinformalsectorismuchlarger,smallscaleassociationsneedtobemobilizedforsocial
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insurance,theNGOscanplayamediatingrolewithinsurersandhelpprocessingpaymentsof
premium(apartfromidentifyingbeneficiariesandgivingthemtherequisiteinformation),and
thegovernmentcanintroducesomeprovideraccreditationsystemstohelpthechoiceof
providers.
IV LivelihoodProtectionaspartofSocialProtection?
Whentheinformalsectorislargeandthemajorityofpeopleareselfemployedintinyfarmsor
firms,theboundarybetweenahouseholdandanenterpriseisblurred,whichmeanssocial
protectionprogrammesmayhavealsotoinvolvevariouskindsofprotectionoflivelihoods.
Theseincludeprovisionofcredit,developmentofmarketingnetworks,insuranceagainst
productionrisks(say,rainfallinsuranceinagriculture,rentingoutserviceforgeneratorsto
coverpoweroutagesinmanufacturingfirmsorrepairshops),roads,extensionservices,etc.For
thosewhoworkinthecasualwagelabormarketandfortheunemployed,skillformation,
vocationaltrainingandpublicfacilitiestoconnectthemupaftertrainingwithpotential
employerscanallbepartofageneralsocialprotectionprogram.
Ofcoursealltheseprogrammeswillcostagreatdealofmoney(apartfromorganizational
resources).Tosomeextentandtotheextentpoliticallyfeasible,somerestructuringofexisting
wastefulorineffectiveprogrammeswillsavesomemoney.Butultimately,astheEuropean
experienceshows,socialdemocracyisexpensiveonthepublicexchequer,itllbemoresoin
Indiawherepovertyanddeprivationaresomassive.IndiastaxtoGDPratioisatthelowerend
amongmajordevelopingcountries(muchlowerthaninChina).Whilekeepinginmindthat
highertax
rates
often
encourage
more
tax
evasion,
there
is
alot
of
scope
for
raising
the
tax
to
GDPratio,particularlyfromcapitalgains,inheritance,andtheburgeoningrentalincomesof
variouskindsinrealestate(thecorruptpropertyassessmentsysteminourcitiesleavesout
muchoftheenormousriseinvalue),inruralandsemiurbanlandaroundinfrastructural
projects,andinminesandotherextractiveindustries.Thiswill,ofcourse,immediatelyraise
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loudscreamsfromIndiasrich,butsanerelementsofthelatterwillrealizethatsocial
protectionforthepoorwillultimatelyhelpthemaswell,particularlysincethehumancapital
chainsarepresentlybrokenwithoutwhichtheirbusinesscannotthrive.Aswehaveindicated
before,therearemanywaysequityandefficiencycangotogether.Ofcourse,thetaxing
governmenthastoimproveitscredibilitybyminimisingwastefulsocialprogrammes.Atthe
locallevelifpanchayatsandmunicipalitiescanraisepropertytaxes(assessedmaybeonarea
basednondiscretionaryratesasisbeingcurrentlytriedinMumbai,reducingthepowerofthe
assessorofficials)andiftherevenueisearmarkedforspendingontransparentandtimebound
specificlocalbenefitprojects(whichcanbepubliclydiscussedingramsabhasandward
meetings),thetaxpayersmaybemorewillingtocontribute.
Ifsocial
protection
has
to
involve
livelihood
protection,
at
some
point
one
has
to
grapple
with
thecontroversialissueofhowmuchofthetraditionalextremelylowproductivitylivelihood
patternshavetobeprotectedagainsttheonslaughtofmarketsandcapitalistdevelopment.As
thelatterhasoftenbeenidentifiedwithdispossessionanddislocationofpeoplefromtheirland
anddespoliationofthelocalenvironment,therearenowstrongmovementsinIndiaagainst
acquisitionoflandfromfarmersandadivasisforthepurposeofindustrialandcommercialdevelopmentandmining.Idonothavethespaceheretogointothedetailsofthisimportant
controversyhere,
Ishall
only
register
here
aplea
for
some
balance
between
the
need
for
economicdevelopmentthatcreatesproductivejobsandenhancessocialsurplus(whichcan
potentiallyberedistributed)ontheonehand,andontheotherhandtheneedforminimising
(andadequatelycompensatingfor)thedislocationbymeansofaprocessinwhichthelocal
stakeholderscanbefullparticipants.Useoflandandmineralsbyprofitseekingcompaniesfor
nontraditionalhigherproductivityactivitiesisindispensableifwewantanychangeinthe
miserablewayoflifethatthefarmersandadivasishaveenduredforcenturiesastheMarxist
economistEmmanuel
once
wrote,
the
horrors
of
capitalism
fade
in
comparison
with
the
horrorsofprecapitalism,orasJoanRobinsonfamouslyremarked,whatisworsethanbeing
exploitedisnottobeexploitedatall.Thereistoomuchromanticizingofthetraditionallife
amongsomeotherwisewellintentionedactivistsandtoolittleinterestinassessingthe
complextradeoffsinvolved.Infactthereisalargersocialorganizationalissuehere.Voluntary
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groupsandNGOsmoreoftenthannotbeingessentiallysingleinterestadvocacylobbieslack
themechanismoftransactionalnegotiationsandgiveandtakeamongdiverseinterestgroups
aroundthosetradeoffsthatlargepartyorganizationsrepresentingandencompassingthese
diverseinterestscouldfacilitate. Thattheexistingpartyorganizationslackingininnerparty
democracydoabadjobofitdoesnotnegatethegeneralpoint.Ontheotherhand,aswehave
mentionedbefore,inthecurrentdispensationthesurplusgeneratedintheprocessof
developmentintheseareasisgrosslyinequitablydistributed,muchofitgrabbedbythe
corporateoligarchy,realestatetycoons,theminingmafia,andtheirpoliticalpatronsand
collaborators.Thereisneedfortransparentandcarefullymonitoredauctioningofminingrights
amongcompetingcompanies,andforasubstantialannuitypaidtothelocaldispossessed
peopleandforanenvironmentalimprovementfundoutofthemoneythusraisedandsharesof
thecompanies.Wehavetofindabalanced,equitable,andsustainablewayofdividingthe
surplusandminimisingtheloss(bothprivateandsocial,includingenvironmental). Inthis
balancingNGOscanplayanextremelyvaluableroleinespousingthecauseofthedeprived,
increasingtheirawarenessandinformation,catalyzingtheirorganizationsandactingas
watchdogsagainsttheabusesofstateandcorporatepower.
V SocialProtectionandDemocraticMobilization
Finally,thebigpuzzleinIndiandemocracyisthis: thenumericallylargepooraresoassertiveat
electiontime,andyetsocialprotectionforthemcontinuestobeweak,andelectionafter
electiontheyselect(orfailtopunish)leaderswhodosolittleforthemintermsofsocial
protection.Theremaybeseveralfactorsatplayhere:
(i) Itispossiblethatendemicpovertyandlackofsocialprotectionarewidelyregardedamongcommonpeopleasacomplexphenomenonwithmultiplecauses,andthey
ascribeonlylimitedresponsibilitytothegovernmentinthismatter.Themeasuresof
governmentperformanceareinanycaserathernoisy,particularlysoinaworldof
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illiteracyandlowlevelsofcivicorganizationandformalcommunicationonpublic
issues.Aperceivedslightinthespeechorbehaviourofapoliticalleaderfeltbya
particularethnicgroupwillusuallycausemuchmoreofanuproarthanifthesame
leaderspolicyneglectkeepsthousandsofchildrenseverelymalnourishedinthe
sameethnicgroup.
(ii) Thelattersuggeststhatwhatismoresalientthansocialprotectionisdignitypolitics.Ofcourse,inalargersensesocialprotectionshouldincludedignityissues.Ifelecting
alowcasteleader,howevercorrupt,reducesthechancesofupper castethugs
harassingorrapinglowcastewomen,thatsurelyshouldcountasagaininsocial
protection.
(iii) Sincethepoorusuallygetmobilizedoncasteandethniclines,themodalitiesofsuchmobilizationareoftenmultidimensional,andpovertyalleviationorsocial
protectionisonlyoneofthemanyissuesthatgetarticulatedinthepublicdomain.
Also,theprocessofsuchethnicmobilizationisofteneasytobehijackedbytheelite
ofthesegroups,whochannelalionsshareofthebenefitstowardsthemselves.The
intendedpoorbeneficiariesareoftenunorganizedanduninformedabouttheir
entitlements,andtheyalsolacktheabilitytoevaluatethequalityoftheparticular
educationorhealthserviceprovided.
(iv) ItispossiblethattheobservedpreoccupationinNorthIndiawithsymbolicvictoriesamongtheemerginglowercastepoliticalgroupsmaybejustamatteroftime.The
socialandpoliticalchangeshavecometoNorthIndiaratherlate;inSouthIndia,
wheresuchchangeshavetakenplaceseveraldecadesback,itmaynotbea
coincidencethattherehasbeenalotmoreeffectiveperformanceinthematterof
publicexpenditures
on
social
protection
projects
like
food,
health,
education,
housinganddrinkingwater.ThisreflectsthefactthatinSouthIndiatherehasbeen
alonghistoryofsocialmovementagainstexclusionoflowercastesfromthepublic
sphere,againsttheireducationaldeprivation,etc.inawaymoresustainedand
broadbasedthaninNorthIndia.Onemayalsonotethattheuppercasteopposition
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tosocialtransformationissomewhatstrongerinNorthIndia,asdemographically
uppercastesconstituteingeneralalargerpercentageofthepopulationthanhas
beenthecaseinmostpartsofSouthIndia.Sonewpoliticalvictoriesoflowercastes
inNorthIndiagetcelebratedintheformofdefiantsymbolsofsocialredemption
andrecognitionaimedatsolidifyingtheirasyettentativevictories,ratherthanin
committedattemptsatchangingtheeconomicstructureofdeprivation.
OnemajordifferencebetweenIndiandemocracyandtheWesternisthattheemphasis
hereismoreongrouprights,lessonindividualrights(whichareoftencrasslyviolatedwhen
thereisevenaremotechanceofsomegrouporothertakingoffence).Oneindicatorofthe
emphasisongrouprightsisthatreservationsareoftenthemostpopulartoolof
redistribution.Public
sector
job
reservations
for
some
historically
disadvantaged
groups,
for
example,ferventlycatchthepublicimagination,eventhoughobjectivelytheoverwhelming
majorityofthepeopleinthesegroupsmayhavenochanceofeverlandingthosejobs,as
theyandtheirchildrenlargelydropoutofschoolbythefifthgrade.Attentionisthus
directedatsymbolicpolicies,andthepatronagebenefitsareprimarilyenjoyedbytheelite
ofthesegroups,deflectingpublicattentionawayfromthemoreurgentanddifficult
challengesofimprovingthedeliverystructureofbasicsocialservicesincludingeducation.
Reservationsoften
become
asurrogate
for
effective
action
on
the
social
protection
front.
Thereisscopehereforimaginativepoliticalleadersbuildingongroupsolidaritiesof
hithertosubordinategroupstofocuspoliticalattentiononbasicsocialservicestheyare
denied,notjustinlobbyingwithhigherauthoritiesbutinmobilizinggroupfinancialand
organizationalresourcesforthispurpose(includingrevitalizingthevarioustraditional
groupbasedcharitableorganizations).Theemphasishastobeongroupbasedsocial
movementsthatemphasizeawarenessoftheirpublicentitlements,ofsomejudgmentand
adviceonthequalityofelementaryhealthcareandeducationalservicestheyreceivefrom
villageprivateprovidersofeducationandmedicalcare,oftheadverseeffectsof
superstition,ignoranceandfaithhealing(somewhatonthelinesofthehistorically
successfulpeoplessciencemovementinKerala),andofbasicsanitation,drinkingwater
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purification,personalhygieneandenvironmentalpracticesthatimprovetheirlives. As
Indiabecomesmoreurbanized,thedifficultiesandcostsofsuchcommunityorganizations
andsocialmovementsshoulddeclinecomparedtothoseindispersedruralsociety.There
arealreadymanywardcommittees,residentsassociations,cooperativesandselfhelp
groups,whichcantrytointegratesocialinsuranceasapartoftheirgeneralactivities,at
leastinnegotiatingwiththeauthorities,processingpaperwork,monitoringandsocial
auditsofgovernmentwelfareprogrammes.Inruralareaswherelivelihoodscrucially
dependonthemanagementoflocalenvironmentalresources(forests,fisheries,irrigation,
grazinglands),historicallycommunityorganizations(panipanchayats,wateruser
associations,vanpanchayats,jointforestmanagementcommittees,etc.)havebeenactive.
Therearenowmanystudiesthathavetriedtounderstandtheconditionsunderwhichthey
succeedandwhentheyfail. Oneshouldderivetheappropriatelessonsfromthis
experience.Aboveall,socialprotectionhastoinvolvethebeneficiariesinactive
participation,awayfromthecurrentframeworkofdolegivingfromthetopbyan
insensitive,unmotivatedandcorruptbureaucracy.
Inconclusion,whilethediscussiononsocialdemocracyinWesterncountriesoftenputsthe
emphasisonitshighcosts(particularlyinviewoftheausteritiesnecessitatedbyintense
globalcompetition)
and
issues
of
incentives
for
work
and
enterprise,
in
India
high
inequality,massivepovertyandavastinformalsectormakethechallengeofimplementing
socialdemocracyextremelydauntingasmuchasitishighlyimperative.Theparticular
governanceissuesinIndia,withinept,corruptandunmotivatedpublicofficialsinchargeof
thedeliverysystem,makethemobilizationofsocialgroupsandcommunityorganizations
andvariousparticipatoryprocessesallthemoreimportant.Butthereisamore
fundamentalissueherethatinvolvestheinteractionoftheproductivesystemandthe
politicalculture.
As
we
have
mentioned
before,
European
social
democracy
is
the
outcome
ofaclasscompromiseandasocialpact:theworkerswhoareelectorallypowerfulenough
toexpropriatethecapitalistsandendthecapitalistsystemhavechosennottodoso,they
havefiguredoutthatcapitalismistheonlyviablewayleftforadequatelyexpandingthepie,
sotheyarepreparedtobearsomecost(exploitation)andletthecapitalistshavea
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reasonableshareofthatpiewhichinducesthelattertokeepontheireffortsat bringing
aboutdynamicinnovations.IamnotsureiftheIndianelectoratehasyetbeenconfronted
withthissocialpact,andifsoconfrontedhowtheyllreact.
Afterthe
demise
of
the
short
lived
Swatantra
Party,
India
has
not
had
afull
scale
pro
businessconservativeparty;eventherightwingpartiesarelargelypopulistonmany
economicissueswhentheygototheelectorate.Inspiteofthegreatfloweringof
entrepreneurialenergiesinrecentyearsthroughoutthecountry,Ibelievethereisastrong
anticapitalist(particularlyantibigcapital)streakinIndianpoliticalculture.Thisisnot
surprisinginacountrywheresmallpeople(smallandmiddlepeasants,selfemployed
artisansandshopkeepers,bazaarmerchantsandpettymiddlemen,clerks,schoolteachers
andservice
workers)
constitute
an
overwhelming
majority
of
the
population,
and
their
ranksareswelledbytheinexorabledemographicpressureandbythetraditional
inheritancepracticesinvolvingsubdivisionofproperty.Thereisadeepsuspicionofmarket
competitionwherebythelargereconomicinterests,oftenutilizingtheiradvantagesof
economiesofscaleandbetterpoliticalconnections,candevourthesmall.Gandhijihad
givensensitiveandeloquentexpressiontothisantimarket,antibigcapital,smallis
beautifulpopulismandmobilizeditinthefreedommovementagainsttheBritish.Inrecent
decadesthose
bearing
the
legacy
of
the
Gandhian
moral
critique
of
market
expansion
and
competitionhavejoinedforceswiththoseespousingtheleftcritiqueofcapitalist
exploitationofworkers,peasants,andothersmallpeopleandtheirrightsovernatural
resources,inbuildingactivegrassrootsmovementsinmuchofthecountryforthe
protectionoftheenvironmentandofthetraditionallivelihoodoftheindigenouspeople,
againstthedepredationsofthecapitalistoligarchy.Eventhoughtheprivatecorporate
sectoristhrivinginIndiaandinsomesenseitshegemonylooksmorepervasivetodaythan
before,it
is
involved
in
the
work
life
of
too
few
people
(as
it
directly
employs
only
about
2
percentoftheIndianworkforce),anditisnotclearthattheelectorateisstillreadyto
accepttheclasscompromiseliketheonebehindthesocialdemocracyenterpriseinthe
West.Ontheotherhand,thepopulistopposition,foralltheirstrengthinnumbers,have
notyetsucceededinpointingtoanyviable,incentivecompatible(i.e.notentirely
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dependentonrevolutionaryormoralzealforsustenance),systemiceconomicalternative,
outsidetheesotericconfinesoftheirwishfulthinkingorutopiananarcho
communitarianism.Thepassionateintensityoftheirnegativecritiqueofcapitalismisnot
matchedbyaconvincingdemonstrationofasustainedpositivealternativesystemthatcan
generatethenecessarysurplus.Untilthistensionisresolved,thesocialdemocracyproject
inIndiawillremainsomewhattentative.