Distributed by Prof Shafaat Yar Khan for CSS Aspirants

Harish Wankhede
India: the next superpower?: globalisation,
society and inequalities

Report
Original citation:
Wankhede, Harish (2012) India: the next superpower?: globalisation, society and inequalities.
IDEAS reports - special reports, Kitchen, Nicholas (ed.) SR010. LSE IDEAS, London School of
Economics and Political Science, London, UK.

This version available at: http://eprints.lse.ac.uk/43447/

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Available in LSE Research Online: May 2012

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Introduction

P aradoxical judgments are intrinsic to the idea of development. India, the second fastest
growing economy in the world, is also known for the vast majority of people living in acute
poverty and impoverishment. Despite the fact that India’s neo-liberal economy is backed by experts
in global economy and its model of development has indeed reduced economic inequalities, India
is still home to more poor people than the whole of Sub-Saharan Africa (455 Million in 2005).
However, poverty measurements are not the sole criterion to understand the hurdles which restrict
inclusive development1. On most of the other social indicators, multiple forms of inequalities still
persist. For example, more than one third of women are anemic in India, 42 percent of children
are malnourished and the share of Scheduled Castes/Scheduled Tribes and Religious Minorities
in formal and informal sector employments is very low. In the light of such stark facts, the
hope that India will emerge as an economic superpower in 2025 appears to be a distant dream.

India’s economic liberalisation may be here to stay, but the question one must address is how the
economic regime will respond to the growing socio-economic inequalities of its subjects? In this analysis,
the question of inequality is addressed by evaluating its relationship with the state, globalisation and
democracy. My objective here is to illustrate how both the liberal state and the adopted framework of
market economy serve in a cumulative way the interests of dominant capitalist classes and systemised
socio-economic inequalities. It is in fact democracy itself that provides the space for the affected groups
and communities to raise their voice for justice and fairness. It will be therefore interesting to observe
how the growing democratic consciousness amongst deprived and marginalised groups concerning their
systematic exclusion from the market will allow them to take radical measures to achieve substantive
justice in the future.

STATE, INEQUALITIES AND ECONOMIC DEVELOPMENT

The constitution of Independent India is an idealised rhetoric which the majority of the population continues
to celebrate. It envisages a society based on the ethical values of individual freedom, socio-economic
liberties and communal harmony. The modern constitutional principles are grand compromises derived
following a highly contested discourse of nation-building, economic development and social change.

There is general acceptance that the socio-economic conditions of contemporary Indian society, that is,
the functional social relationships and the overlapping mode of production, are exploitative with respect
to the majority of the population and particularly for Dalits, women and religious minorities.

1 ‘Inclusive development’ is defined here as the recognisable and fair participation of various ascriptive communities in the process of
economic growth.

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 Confronted with a society harbouring manifold The rhetoric of state-laden development ensured
oppressions, the nation builders have shown a a quasi-political awakening amongst certain social
committed effort to the enlightened vision of groups which were protected and supported by the
establishing a just society, transcending the obstacles state (mainly the Dalits), but to little effect, as other
of casteism, communalism, feudalism and capitalist forms of inequalities persisted at very high levels. The
exploitation. The concepts of justice derived during position of women, Backward Classes and Muslims
such a complex period, are therefore rooted within on most of the indicators of social development was
the dynamics of social structure and the contestations unimpressive and they remained at the bottom in
that it generated, transforming the classical concept terms of prosperity. Faith in modernity and political
of universal justice into a new institutional framework democracy prevented most of the underprivileged
to handle the multiple modes of inequality in the sections of society from openly challenging the inertia
society. The Constitution validates the necessity of shown by the state towards their empowerment.
fundamental rights for all citizens, a socialism-sensitive Whilst the democratic polity flagged pertinent
welfare state, promotes and protects minority interests questions of socio-economic disparities (the famous
with its secularism doctrine and advises structural Garibi Hatao (Eradicate Poverty) slogan by the Prime
changes for the socially deprived sections through Minister Indira Gandhi in 1980s general elections)
various measures of affirmative actions. These ideas the ruling political elites showed little interest to craft
on the whole express the commitment of the Indian substantive economic policies so that the concerns and
state to end multiple forms of manmade inequalities. the interests of the poor could be served. At a later
However, even such multiple strategic institutional stage, mainly in the 1970s and 80s, the devalued and
norms fail to guarantee justice to a vast number of non-performing nature of Indian economy (the growth
Indian citizens. rate was very low (3.6 average) and even declined to
2.4 percent in 1971-80) paved substantive reasons
The institutional setup and its practices conserve the for the ‘neo-liberal genre’ to convert the state into a
existing socio-economic structures in the interests of libertarian state for open economy.
the social elites. The socialist dream of the Nehruvian
era was high on optimism but failed to fulfil the hopes
GLOBALISATION AND INEQUALITIES
and expectations of ordinary people. State institutions
do advocate people-centric development but the In the 1990s India officially entered the competitive
control and interest of the dominant classes and castes world of emerging economies, opening its borders
hardly allowed it to happen. A very small group of for the developed countries to improve its economic
educated, middle class men holding reputed social conditions. The supporters of market economy
status and economic power became the beneficiaries argued that with the reduction of trade barriers
of it and large numbers of people within various between countries, a large influx of facilities related
communities were almost left out of this framework. to industrial production, capital flow through foreign
The possible instrumentality of the welfare state for direct investments (FDI), and technological support
the greater empowerment of the oppressed and the would modernise industry and create millions of jobs
marginalised sections had very limited success. It did across the sectors of the economy. The new wave of
mark a substantive shift from the economic stagnation economic restructuring under the New Economic Policy
of colonial India, however, it has failed to promote (NEP) was expected to have a tremendous impact
the actual wellbeing of its citizenry. The number of on improving the economic conditions of all Indian
people living under the official poverty line reached citizens, irrespective of gender, regional, social and
a staggering high even after the two decades of the religious differences. The pro-development literature
mixed economy (it was 45.3 percent in 1951-52, 47.4 promises that with the rapid enhancement of capital
percent in 1955-56, 45.3 percent in 1960-61, 56.8 and swift industrialisation, economic inequalities will
percent in 1965-66 and 52.9 percent in 1970-71). be reduced substantially.

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With such economic growth, it was thought that with the result that farmers have been unable to
the reduction of poverty would be inevitable. Such compete globally amid market price volatility. The
positive assumptions drew the policy makers to adopt seminal rise of cases of starvation and malnutrition
aggressive neo-liberal measures in key sectors of the in Orissa, the growing numbers of cases of suicide
economy. The state-controlled economic sectors were among farmers in Maharashtra and Andhra Pradesh
opened up to private holdings, regulations and welfare and the prolonged agitations of farmers in West
measures were reduced considerably and labour laws Bengal (Nandigram and Singur) and Uttar Pradesh
and policies were restructured, mostly in the favour of (UP) (Bhatta-Parasol) for land rights depicts that the
the market economy and to enhance the productive agricultural sector is facing severe crises in the post
capacities of the respective sectors. reform era.

Liberalisation and economic development become The non-agricultural economy (the growing service
synonymous terms, relegating other indicators of sector) mostly benefits the urban middle class groups
inclusive growth (such as agricultural production, with access to good education facilities and other
literacy, health, education, and children welfare) to resources. In contrast, Dalits, women and Muslims
supplements of the market economy. Rather than face discrimination in employment and wage payments
the ‘people-centric’ framework, the new passion for on the pretext of merit, efficiency and suitability.
achieving targeted Gross Domestic Product (GDP), A field survey report by Action Aid demonstrated
economic efficiency and increase in production that the labour market usually functions under the
capacities became the prime assessments of growing aegis of traditionally dominated class/caste groups
economy. There is a merit in the positive contemplation and elsewhere nepotism, conventional networks,
of global market economy, as the Planning Commission and kinship play a detrimental role. The Dalits, who
data shows that there has been a clear reduction are otherwise regarded as an ‘outsider’ to the idea
in poverty over the last two decades. It has been of entrepreneurship, are the unwelcomed entrants
consistently argued by the promoters of Globalisation in the domain of market economy and thus face
that the actual numbers of people living below the discrimination, including the practice of untouchability.
poverty line has decreased (from 54.9 percent in 1973- The market is not ‘rational-secular’ in an ideal sense
74 to 26.1 percent in 1999-2000), but these figures but follows these unethical modes to achieve its
are contested and many on the left have argued that particular objectives. The state sponsored Sachar
the reduction in poverty has been shown by simply Commission Report (2006) thus argued that the
replacing the conventional measurements used to benefits of the market (ATM machines, Access to
study poverty. For example, the 2400 calorie intake Bank credits, Educational Institutes, Hospitals, etc.)
measurement was reduced to 1868 in the ‘indirect remained out of the reach of Muslim communities
poverty’ method adopted by the Planning Commission. that face identical discrimination to Dalits in the labour
market. Whereas Dalits and Muslims are substantively
In a similar vein to the utopia created by the excluded from the profits of the global economy,
promoters of state-based welfare economy, the there is a serious attempt to ‘include’ the Tribals in the
pro-liberalisation camp campaigned for its politics course of development without their own consent.
with the rhetoric of reducing inequalities. Whilst the The tribals of Orissa and Chhattisgarh have taken
growth story is impressive in the service sector, and to radical means by adopting the Maoist-Naxalite
in particular in Information Technology, the rural path and have persistently shown opposition to the
agricultural economy has shown negative growth and mega development plans proposed by the state and
unemployment among the rural poor has increased. multinational corporations.
The causes of this negative development within the
agricultural sector stem from the deflationary policies The market economy further practices the conventional
adopted under WTO dictates and the withdrawal of mode of economy and hardly disturbs the status
subsidies to farmers (in the procurement of seeds, quo of inequalities. The well-off classes and groups
fertilizers, pesticides, electric power and bank credits), have benefitted most from the economic reforms
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 and a significant number of people have entered into with 21 percent); ill health (infant mortality is highest
the category of middle class. However, it is difficult amongst the rural poor Dalits at 90 per 1000 live
to locate whether the classes which were poor, births); and poor education (the literacy rate among
marginalised and oppressed in the past have actually the Dalits is the lowest in India at 52.2 percent).
been empowered by the NEP. In addition, the market
economy has stratified the status quo in other spheres. The theory that the market economy equalises and
Development at the regional level indicates that some frees citizens to pursue their economic betterment is
of the states were conventionally prioritised over others not borne out by actual facts in the context of India.
which resulted in a strict dichotomous relationship The constraints of poverty, gender discrimination,
between the developed states (Maharashtra, Gujarat, regional inequality, caste oppression and communal
Karnataka and Kerala) and backward states (Orissa, stereotypes play a decisive role in excluding sections of
Bihar, Uttar Pradesh (UP) and Madhya Pradesh (MP)); society from the spheres of economy. The inaccessibility
the latter states have shown negative growth rate even of the market kept these communities away from
in the post liberalisation period. The market economy the profits of NEP. Inequalities among citizens persist
has not reduced the gap between these states. This because market practices are determined by unequal
regional disparity is further sanctified by multiple and unfair treatment of the people. As a result, wider
forms of inequalities among different social groups democratic assertions of affected people have risen
at the national and the state levels. The numbers of significantly in the last decade.
illiterate women in the backward regions are more,
and their share in education and employment is dismal
DEVELOPMENT AND DEEPENING INEQUALITIES
in comparison to the developed states. The poor
tribal population in Orissa are more vulnerable than The idea that liberal market reforms will bring
that of Rajasthan. Urban poverty amongst Muslims prosperity to the majority of citizens has always been
is very high in comparison to other social groups in a highly contested judgment. A conscious exclusion of
some states including West Bengal (27 percent), UP categories, mainly of the poor sections of society, has
(44 percent) and Maharashtra (49 percent). The Other become an integral part of the contemporary process
Backward Classes (OBCs) amongst the Muslims are of development. Conditions created by such lopsided
also more illiterate (61.9 percent literacy in comparison economic arrangements have produced new forms
to the national average of 65.7 percent amongst the of hierarchies within gender, regional, caste and at
Hindu OBCs) and poorer (35 percent of the Muslim the community levels.
population is below poverty line compared to the 28
percent at the national average). The Dalits, who comprise almost 17 percent of the
national population, have a negligible presence in the
At the macro level, the post-liberalisation economic formal economy. They consistently suffer discrimination
policies have demonstrated striking improvements with respect to land, labour and capital. The greater
in the majority of social development indicators. In dependency of Dalits on agriculture for their livelihood
the first decade of economic liberalisation experts – mainly as landless labourers with low wage rates
witnessed the decline of low income households – has created the condition described as ‘chronic
from 65 percent in 1984 to a mere 36 percent in poverty’. Such discriminatory disparities remain also
1999-2000, a rise in the literacy rate to 65.1 percent in the educational sectors. Even though there is a
and sudden growth in the service sector employment significant rise in the literacy rate among the Dalits,
owing to the Information Technology Revolution. their participation in elementary and higher education
However, the impact on the removal of obstacles to has lagged behind significantly in comparison
social and economic mobility for the most deprived with the non-Dalit counterparts. Market practices
groups has been less impressive. The most deprived further subtle discrimination in allocating resources,
social groups still suffer under extreme conditions employment, loans and other facilities to this particular
of poverty (rural poverty amongst Dalits remained group. Owing to such conditions, Dalit political
high with 36 percent compared with non Dalits and pressure groups have started demanding newer
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forms of Affirmative Action Policies in the service health hazards and social insecurity. Such denial to
sector and the extension of reservation policy in private possess basic capabilities because of poverty and
industry. unemployment makes economic exploitation one of
the worst forms of oppression. Further segmentation
The tribal groups are geographically excluded and valuation of labour based on a non-economic
communities which remain mostly dependent upon criterion (socio-religious identities) not only restrict the
the natural resources available in the forests. Under entry of these groups in the open market economy
the aegis of private capital and influenced by the but also become a source of discrimination. The poor
new mantra of development, multiple acres of forest with degraded socio-religious identity in this sense are
land have been acquired from them and distributed the worst affected category in contemporary India.
among the industrial classes for various developmental
projects, without firmly addressing the basic question of In the neo-liberal economy, the rural poor and the tribal
compensation and rehabilitation. Mega-development communities are at the bottom of the inequality scale.
projects have entailed large-scale displacement of the The promoters of development are interested in the
natives, including the Big Dam Projects at Narmada controlled utilisation of natural resources (land, raw
River valley, Hirakund, and Bhakra-Nangal. Apart from materials, labour) but show little interest in locating
forced displacement, there is danger of ecological the possibilities by which the affected sections
destruction (the iron-ore mining has the capacity to can be integrated into their heightened economic
contaminate the ground water and natural water falls endeavour. In most cases, development projects ignore
of the forest, making it unsafe for drinking) as observed the essential needs of the poor, misunderstand their
in the case of the current Posco project in Orissa. Such socio-economic conditions and hardly bother about
developmental models have a capacity to drive many the spiritual-cultural bonding that these people attach
communities to destitution and disempowerment, as to the natural resources themselves.
shown through the unlawful occupation by the Mining
The liberal political project is celebrated by the
Mafia of mineral and resource-rich land in Andhra
marginalised and poor as it provides them respectable
Pradesh and Jharkhand. The tribal groups of these
space to raise their voices against any form of injustice.
areas are mobilised by ultra-left forces (Naxals-Maoists)
In India, the growing people’s movement against NEP
and have on occasions resorted to violent means to
are the responses of the underprivileged sections that
oppose multinational companies from seeking to exert
were excluded from the process of development.
control over natural resources.
Democracy as a tool is utilised by the affected sections
The Muslim community in contemporary India is to mobilise people against grand economic projects for
the victim of multiple prejudices and stereotypes. making it fair and inclusive. At a time when economic
Their degraded socio-religious identity is further development excludes the poor and marginalised
supplemented by their deepening poverty and groups from its purview, it is the democratic spaces
educational backwardness. Their presence in the which include their voices to demand justice from
the state.
formal labour market is miniscule and even in the
informal sector Muslims are restricted to mainly manual
and semi-skilled labour jobs. In the absence of basic
CONCLUSION
human capabilities (dignity, education and health)
the majority of poor Muslims remain excluded from The period of liberalisation has produced two economic
the benefits of the NEP. The new era of economic systems: one represented by the urban economy, based
reforms offers them very little hope under such on the service sector and mainly profitable to the smaller
conditions and the growing destitution among the but dominant section of the educated middle classes.
young generation can lead them towards criminal On the other side is the majority (rural poor, socially
activities, religious fundamentalism and extremism. deprived groups, tribals, women and Muslims)
Economic exploitation can cause multiple forms who have little hope that their situation will
of deprivations, including the denial of education, be empowered under the changed conditions.
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 Understanding the value of economic exploitation, based on poverty indices, will not ensure remedies to
multiple forms of inequalities faced by these groups. Providing an equal space to other forms of exploitation
(social, religious, cultural) is indispensable while redefining the question of growing inequalities.

The social and political marginalisation of these groups from the public spaces in general and from the
institutions of influence (including the economy) in particular has made them the most vulnerable communities.
Their identities are prejudiced and condemned as ‘others’ in the social life. Moreover, the liberal economy
is itself not free from the influence of social and political maladies. In the sphere of the open economy, the
participant is not treated as an aspired individual with rational attributes, talent and free choices, but his or
her role and calibre is largely determined by his or her possessed social position and status. In this respect,
the Dalits, Muslims and tribal groups’ social exclusion presages their disadvantaged status in the sphere of
modern economy.

The liberal market economy and democratic freedom hypothetically guarantees every individual free
choice in determining their economic and political objectives. However, in a very real sense both arenas are
controlled by the same societal values against which such ideals were developed. The current understanding
of development has not produced economic freedom in any substantial way. If the market discriminates and
excludes certain communities from its purview on the basis of specific group identities, then the market has
failed in protecting the rights of the individual as a free agent of their own will in the open economy. The
future of the market economy is dependent upon its capacity to reduce the discrimination and marginalisation
of these unequal citizens. ■

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