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A futile chase in India

Inequalities have a way of remaining entrenched from generation to generation; only their manifestation changes
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First Published: Tue, Mar 12 2013. 07 32 PM IST
A file photo of workers working under MGNREGS in Rajasthan. Photo: Mint
A file photo of workers working under MGNREGS in Rajasthan. Photo: Mint
Soon Parliament will pass the National Food Security Bill (NFSB). NFSB is a measure meant to impart food security to underprivileged citizens; the expression “security” being a code word for reducing inequality in the consumption of food. Along with the Mahatma Gandhi National Rural Employment Guarantee Scheme, or MGNREGS, (income) and the Right to Education Act (education), the Bill is part of this government’s signature campaign to reduce inequalities prevalent in India. The entire effort is doomed to fail.
There is, of course, a strong moral case for reducing inequalities of various kinds. The problem lies in finding the right measures to do so. Different inequalities have different causes. Income inequality, for example, can arise from job market entrants not having the required skills for good jobs. Location, too, can play a role: regions not linked to markets are always poorer. In many cases deliberate inequalities—due to caste and gender discrimination—can be removed by appropriate legislative means. But the more durable ones—largely due to paucity of human capital—do not afford easy solutions. For example, in any market economy, people with better education, often from elite universities, are bound to do better. In the West, these inequalities are born from an inability to exploit opportunities and not the absence of equality of opportunity. The two causes require very different remedies. In India, in contrast, the absence of equality of opportunity is the motor that drives inequalities.
That, however, has never been deliberated by our policymakers. As in other collectivist societies, our leaders want to effect “final mile” solutions. If jobs are not available, swish a wand and create jobs on a gargantuan scale (MGNREGS); if it is the absence of high-income jobs, ask the private sector to set aside a quota for those whom politicians deem fit. If it is inequality in the consumption of food, simply legislate one more right. In all this, cause and effect are conveniently confounded. It is almost axiomatic that those inequalities that promise instant political gratification will command attention; policy measures that can make a lasting impact are ignored. In this context it is interesting to note the contrasting fate of RTE and MGNREGS. The former has the potential to reduce income inequality in the long run while the latter is a vote-spinner. No marks for guessing which one has greater political traction.
The danger in all these measures is that their unintended consequences outweigh the intended benefits. In the case of MGNREGS, its adverse fiscal impact is now widely admitted. It’s not clear what the scheme’s lasting contribution is, but its negative effect is pretty clear: it has played a role in derailing growth. From this perspective, the fears about NFSB are quite legitimate.
One good, historical example of these unintended consequences can be seen in Punjab. When India began its quest for self-sufficiency in food in the mid-1960s, this state was a natural choice for experimentation. It did not suffer from debilitating institutional legacies (as in the case of Bihar); it had, so to speak, a “yeoman” class of farmers with landholdings that did not defy economies of scale. Ample availability of credit and hybrid seeds did the rest.
Viewed from the vantage of the 21st century, the results are decidedly mixed. Inequality—in terms of consumption of cereals across the country—has certainly come down after the Green Revolution. Within Punjab, however, there has been a marked concentration of landholding. On the one hand, the state has seen a decline in the number of marginal farmers. And on the other hand, among major agricultural states, Punjab has a rather high concentration of large (10 hectares and above) landholdings. The political effects of this change have been, to put it mildly, rather adverse for dalits and other underprivileged groups. Political power is firmly entrenched within one particular caste, if not one family representing that caste. The percentage of dalits in Punjab is one of the highest in the country, yet they are probably the remotest from acquiring political authority anywhere in India.
It is safe to say that an increase in food production in Punjab and the resultant, countrywide, expansion in food consumption has led to the emergence of political inequality not only in Punjab but in other states such as Andhra Pradesh as well. Could anyone have thought of these effects, say, 40 years ago? The political consequences of the NFSB—a measure that will require millions of tonnes of additional foodgrains—in view of past experience will only be negative. Reducing inequality in one arena is bound to heighten it elsewhere. And each emergent inequality is more durable than the one that policy measures seek to remove. The mechanisms of social exclusion may vary from state to state but policy measures implemented with the best of intentions certainly have a role in accentuating them.
It is a dreary conclusion that one can do so little about ameliorating inequalities. But as every new crop of social scientists discovers, inequalities have a way of remaining entrenched from generation to generation; only their manifestation changes. Before our policymakers, and their intellectual advisers, inflict lasting damage on India’s social landscape, they should think hard about the causes of inequalities. Only then should they think of the means to reduce them.
Siddharth Singh is Editor (Views) at Mint. Reluctant Duelist will take stock of matters economic, political and strategic—in India and elsewhere—every fortnight. Comments are welcome at siddharth.s@livemint.com. To read Siddharth Singh’s previous columns, go to www.livemint.com/reluctantduelist-
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First Published: Tue, Mar 12 2013. 07 32 PM IST