By Aparna Pande
This article appeared in Indolink on June 14, 2007

India is one of the fastest growing economies in the world today. Yet despite two decades of reforms and growth increasing sections of society feel deprived either from political or economic power. The recent tensions in Punjab and Rajasthan and the growing Naxalite presence in some parts of the country are adding to the already existing tensions in North East and Kashmir. In order to maintain its growth and ensure the spread of development India needs to find a long-term solution to these problems. 

India’s middle class currently comprises between 200 million and 250 million people. Its potential as a market and as skilled workforce is among the major reasons for the rising Foreign Direct Investment (FDI) flowing into India. Poverty has fallen over the last few decades but still around one-fourth of the population lives on less than $1 a day.

The Indian economy is growing at 7-8 percent per annum but it is buoyed by the growth in the services sector which employs only 1% of the working age population. The agricultural sector which supports around 60 percent of the population has grown only at 2.2 percent per annum.

 

The economic reforms undertaken by the government have not directly benefited the masses. The growth in employment has been more in skill and capital intensive sectors and in the service sector leading to the belief that economic reforms benefit the elite. Pro-market reforms for the future like privatization of the large public sector enterprises, changes in labor laws to institute hire and fire policies and reduction in agricultural subsidies are going to cause immense short-term pain to the masses.

 

The electoral consequences of these reforms and the present left-center alignment at the central government level means that it is less likely such reforms will be undertaken. What this also means is that the view about reforms favoring only the elite will be reinforced.

 

The views of the masses on various issues can be obtained from the National Election Study (NES) which is conducted after every election in India. In 2004 the National Election Study (NES) results showed that 85 percent of the people knew about economic reforms (in contrast to 19 percent in the 1996 NES) and of them the majority believed that the reforms only benefited a privileged few.

 

Clash of economic interests is affecting almost every aspect of social and political life. For example, the Dera Sacha Sauda issue seems to have religious overtones but there is also a socio-economic facet to the problem. In the 1980s there was growing resentment in Punjab both over the income inequality between the few rich Punjabi farmers who benefited from the Green Revolution and the vast numbers who did not as well as the growing number of educated unemployed youth. Even today the issue of income inequality and the rising number of educated unemployed youth still remains.

 

The Gujjar-Meena tensions in Rajasthan have a caste-dimension but there is an economic element too. Granting of Scheduled Tribe status to another tribe means a reduction in the pool of jobs available for those already availing of the privilege.

 

The Naxalite presence in India has grown substantially over the years. Various radical groups are present in almost 160 of India’s 604 administrative districts. Prime Minister Singh referred to them as “the single biggest internal security challenge ever faced by our country”. The causes behind the growth of the Naxalites lies in the non-implementation of land reform and redistribution policies, the immense exploitation of peasants at the hands of the moneylenders and landlords and the absence of any form of government in these remote villages. Economic growth has not reached the Naxalite infected parts of India.

 

The insurgency in the North East has been raging for a number of decades. A large part of the problem lay in the belief of the northeasterners that the central government did not care about them or their problems. The distance, both physical as well as attitudinal, was felt on both sides. Lack of economic growth seems to have only compounded the issue. Once insurgency started its brutal repression further fuelled the fire and this in return prevented further economic growth.

 

The insurgency in Kashmir also has many dimensions but a key element is lack of economic growth and political development. The rising number of educated Kashmiris wanted and demanded more economic growth and more political freedom (i.e free and fair elections). Feeling deprived of these key democratic principles there was an incentive to turn to violent means to demand their rights.

 

According to Alexis De Tocqueville, noted 19th century historian and political scientist, “…if men are to remain civilized or to become so, the art of associating together must grow and improve in the same ratio in which the equality of conditions is increased.”

 

Continuing in the same vein Samuel Huntington, believes that rapid modernization can actually lead to ‘political decay and not political growth.’ This is because rapid economic growth, growth of literacy and education, urbanization, industrialization, growth of communications and universal suffrage all lead to rising demands by the masses. When these demands are not fulfilled then there is instability and tension in society. When the government cannot fulfill these demands then militant ethnic groups or anti- modern radicals fill this gap.

 

India is growing fast, but to prevent ‘overheating’ it needs to reorient the focus of its reforms so that the masses see the benefits of economic growth. Also the government needs to invest in building infrastructure, in primary (and not just tertiary) education, in health care and in providing basic electricity and water to the masses living in the remote parts of the country.

 

There are positives India can still rely on. India has been a functioning democracy for the last sixty years, it has a system of checks and balances between the various wings of government, the judiciary has been independent and the media is free. But to consolidate these democratic gains of six decades, and to maintain the momentum of economic growth of the last few years, it is imperative that prosperity is expanded to include the masses as its beneficiaries.