Like most urban dwellers, I too live in an apartment complex with the associated service suppliers, two of them being my household help and the couple who iron my clothes (in perfect crease) every week. My household help’s daughter works alongside while her cousin is practising as a lawyer in Australia; the ironing lady’s son is midway through a degree course in information technology. Both families are clear that the next generation will not be in any way associated with the professions of their parents.
Over the last decade, when economic growth acquired a new trajectory, particularly in the five years ended 2007-08 when growth averaged almost 9%, you would have heard this anecdotal tale of social change over and over again. It is no coincidence; instead, it is a facet of the opportunity that the explosion in India’s growth process has provided to various demographic segments.
More importantly, they are also part of the growing tribe of new stakeholders. It is my case that they are an outcome of the melding of some game-changing norms in society, such as the empowerment of the backward classes through the implementation of the Mandal Commission report and the opportunity that such rapid economic growth creates. It is an aspect of the political economy of the emerging India: the challenge to status quo and the growing number of stakeholders with a keen desire to uphold the system that gave them an opportunity.
Looking ahead, I would, provided the Congress party does not lose its nerve from this stage, argue that the Women’s Reservation Bill approved by the Rajya Sabha is yet another epochal measure that will catalyse this process further. At the moment, the Congress is on the horns of a dilemma: balancing the survival of the government with its electoral promise on an issue that was first considered 14 years ago. At worst, its implementation may get delayed and probably even marginally diluted; it is unlikely to be put off. To borrow a cliché: It is an idea whose time has come.
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The plan, as it stands, envisages 33% reservation for women in the Lok Sabha and state assemblies. It will work through a process of rotation in every general election. As a result, in every election, a minimum of one-third of the constituencies will have a female representative. What this guarantees is a set of new faces in the state assemblies and the Lok Sabha. It may, as purists argue, roil the development prospects for a constituency since an incumbent will have no interest to invest in long-term measures. Yet it will certainly guarantee a new set of stakeholders in society.
Modern history is replete with such examples. Ironically, the two Yadavs who are opposed to the Bill in its present form owe their emergence to a structural change introduced in the existing social and political order by V.P. Singh’s implementation of the Mandal Commission report, which empowered the so-called other backward classes by providing them reservations in government jobs.
On the business side, status quo started to be challenged when the government commenced dismantling industrial licensing controls three decades ago. The first decade forced a change in the mindset and the last two initiated policy change, resulting in an entirely new structure for Indian industry along with a rash of new marquee names. Not only has the collective clout of Indian industry risen dramatically and made it competitive even at the global level, the process of change has also completely reworked the business order. Several of the top companies, such as Bharti Airtel Ltd and Reliance Communications Ltd, did not exist three decades ago and have edged out some of the traditional business houses at the top.
Along the way, the rapidly transforming system also gave birth to an entirely new stakeholder: the Indian consumer. The new millennium has witnessed the rapid emergence of the consumer, who was for long completely bereft of choice. Not surprisingly, the overall consumer base has expanded dramatically, in turn, providing industry a greater opportunity. Some companies, by offering products in small sachets at affordable prices, have now even brought parts of the bottom of the pyramid into the consumer base for personal care and household goods.
The emergence of the rural consumer (captured by Mint in a series called Bharat Shining that ran last year) is the big story of the last five years. Part of the reason is that there has been a spurt in the prices of farm goods. Alongside, the launch of the Mahtama Gandhi National Rural Employment Guarantee Scheme in 2004, offering 100 days of employment a year to at least one member of every rural household, provided a safety net for the poor on the one hand and assured basic consumption demand on the other.
If we connect the growing number of dots, one can identify the emergence of the new set of stakeholders in Indian society. In fact, it is this new order that makes this change so fascinating and also enduring—the new stakeholders will invest in preserving the system. This gradual conversion of India into a society of stakeholders in a peaceful manner (so far) is probably the biggest subtext of the political economy in the country’s new growth phase.
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comment at firstname.lastname@example.org