Lesson 10 Developmental and Welfare Dimensions Important Notes

Lesson 10 Developmental and Welfare Dimensions

The development and the emergence of India state from the imperial power can be view in this chapter where the continuity and discontinuity of colonial legacy be study in details. We are going to study how India takes up certain challenges as a sovereign nation. The trajectory of modern Indian state follows the western pattern which have some different in practices. The Indian state needs different understanding and proper analysis of its developmental aspects. This chapter will focus on the developmental and welfare dimension vis-à-vis with the political development. India being a socialist democratic state focuses on welfarism for the development of the state and its people.

With the end of colonial rule in India after nearly two hundred years of subjugation; political, economy and social aspect of the newly independent nation was in disarray and shattered.

Partition was one such factor that made our leaders to acknowledge the importance of peace for country’s development and prosperity. In spite of ample challenges that encircled India, our leaders were able to frame our constitution which gives hopes for the people of young new nation. Jawaharlal Nehru, the first Prime Minister of India was influenced by the Soviet type planned economy where the central should command and steer the developmental process of the country.

With the emergence of Indira Gandhi in the political scene, the state took another route to embark for developmental processes. The 42nd Amendment Act of 1976 added the word, ‘SOCIALIST, SECULAR and FRATERNITY’ to our Preamble of the Constitution. Part-IV of our constitution mentioned Directive Principles of State Policies. With the emergence of Janata Party government various policies that were adopted by the previous government were scrapped. Indira Gandhi came back to power with a policy, ‘GARIBI HATAO’ where she tried to remove inequality and bring about social justice through government interventions. Schemes were introduced to remove poverty and self-employment generation were created.

India took an important measure to reform India’s economy and this is when Liberalization, Privatization and Globalization came into our political economy. India’s economy was improving gradually where market orient reform existed. International factors also contribute while structuring our political economic strategy. One such important event was the emergence of Cold war and the policy of Non-Alignment that India was following. The disintegration of Soviet Union and the emergence of US hegemony made India to follow and discarded certain policies that were followed by India.

The presence of international bodies, regional and multilateral organization is also one of the concerns while following certain polices. When India loss cases on Solar energy issues with USA in WTO, India economy and politics is not shape by domestic institutions alone. The state remains at the centre in the development process with the support of technological advancement and improvement in human resources.

Developmental Dimension of India

Post-colonial state in India begins with the development of various sector that includes agricultural and industrialization. It was Nehru who took a great important step to bring India into a new dimension of growth and development. There was no doubt that majority of the population (70%) directly engaged in agricultural sector. Land reform measures were introduced though not that successful except in four states (Jammu and Kashmir, Kerala, West Bengal, and Tripura).

Jawaharlal Nehru and Subhash Chandra Bose, the two stalwarts of the left within the congress put aside nagging of ideological debate by arguing that the whole questions of industrial development should be resolved within the framework of ‘all India industrial plan’. National Planning Committee was formed as Nehru as its Chairman. The significant about the planning was that; (i) It determines the policy of the state when India was still under the colonial power and policies of provincial congress government which turned out to be a concrete idea of a nation state.(ii) Planning as an exercise of state policy with technical evaluation and on scientific grounds. (iii) Appeal to committee of expert was an important instrument in resolving a political debate which, much to the irritation of the emerging state leadership of the congress was still refusing to go away.

In the 1940s the nationalist argued that in order to prosper and develop, firstly the foreign rule should be abolished as it impedes for the development of India. At this juncture the economic exploitation was the central point for national movement. Self-government consequently was legitimate because it is a necessary condition for growth and development.

Politics in India from 1947-1969 was characterized as ‘the Congress system’. The party governed both at the centre and states. This period was also a stage of developmental state which intervened in the economy, planning and guiding its growth directly. It was legitimizing the post-colonial state by this intervention. India choose soviet model of planning working within the framework of mixed economy.

The war that broke out in 1962 and 1965 that coupled with poverty was a setback for industrial growth in India. Government was forced to devalue rupee. Election in 1969 was a major challenges face by the Congress party since India got independent as in nine states non-Congress government was formed.

In 1971 General election, Congress party under the leadership of Indira Gandhi came to power with a slogan ‘garibi hatao’ (remove poverty) . The structure of the Congress was different from the ‘congress system’ and the state became the principle for bettering the condition of the people. At the same time public-sector undertaking also continued to grow rapidly and the urban middle class and large section of the working class became dependent upon its further expansion.

The developmental ideology of Nehru was now purveyed in a new rhetoric of state socialism with the central executive structure of government playing the pivotal role. Welfare packages were now targeted towards specific groups of the population such as SCs/STs, workers, women and minorities. In spite of success in Green Revolution, certain sections of the societies were facing economic hardship where agitation spread across the country.

Pranab Bardhan (1984), Marxist scholars identified the capitalists, the rich farmers, and the bureaucracy as the three dominant classes competing and aligning with one another within a political space. Achin Vaniak (1990) also endorsed the dominant coalition model, emphasizing the strength of the agrarian bourgeoisie important that could even ascribe to its ability to mobilize rural electorate. Atul Kohli (1991) described the story of the state in the 1980s as one in which, by surrendering the immediate electoral pressure exerted by various social groups, democratic state institutions were allowed to decay, leading to all-round crisis of governability.

After Indira Gandhi was assassinated in 1984, Rajiv Gandhi took up the leadership of Congress where it was short-lived. The politics of India was witnessing a coalition government since 1989. The National Front Government was forming a government where it was short-live due to lack of political consensus. P.V. Narasimha Rao government in1991 was a minority government where structural economic reform was introduced. Chakravarty (1987:7) says that in the early 1950s, when the planning process was initiated in India, there was a general consensus on ‘commodity-centred’ approach.

 

Political Economy in India

Political Economy integrates the relationship between the economic policies within the political framework of a country. Economic policies and economic development were strongly influenced by the compulsion of political democracy. As the twentieth century draws to a close and we approach a new millennium, market economy and political democracy are buzz words not only in Eastern Europe and developing countries of Latin America, Africa and Asia.

There was opposition for trade liberalization and limited itself within the domestic products to protect infant industry. The believed that infant industry especially industry and high technology areas required substantial state support. Financial support and protection from foreign industries was the responsibility of the government. Nehru was in support of planning and promotion of powerful and technocratic Planning Commission and greater involvement from the state for economic development of India. The First Five Year Plan from 1951-1956 was a very successful with agricultural output beyond the target, but the industrial sector which was given more priority in the second Five Year Plan was successful yet agriculture shows declined in fund allocation from 34.6% to 17.5% which decrease the output.

India needed to devalue rupee, liberalize importing, free some sector such as fertilizer production from government control, reduced the size of public sector and increase foreign investment. The government come to promote agriculture in the aftermath of devaluation which was done under the advice of World Bank. India imported high-yielding seeds of wheat from Mexico which was successful. The output in agricultural sector was increasing with the technological and financial aid from US which India starts as Green Revolution.

Apart from the Green Revolution, Indira Gandhi nationalized certain sectors like steel, copper, banking, insurance and wheat trade. In spite of all the economic measures taken up by the government, there was still unacceptable high level of poverty and economic slowdown which coincides with the authoritarian rule of Indira Gandhi. Political opposition is increasing and the movement of Jay Prakash Narayan in some states were another stumbling block for the government to carry ahead their political and economic policies.

Asian economies performed well with their private initiative. Countries such as South Korea, Taiwan and Singapore experienced economic growth during this time. From 1960s to 1980s the leaders continued to gradually and often stealthily deregulate the economic activities of the private sector despite the socialist rhetoric. The vast majority of Indian industrialists had become accustomed to beating the system of controls, where licenses and approvals were required for production, imports and exports.

Rajiv Gandhi during his tenure as Prime Minister, he reduced government control over industrial activity and took a step to improve technological upgradation. Thirty industries and 82 pharmaceutical products were de-licensed during his time as Prime Minister. The need for license was removed for investment up to rupees 250 million in developed region during the time of V.P. Singh. Suzuki Company of Japan collaborates with Indian government despite various protest.

The system of English education and Engineering colleges were also increasing during this period and the availability of low wages enabled the IT sector to start investment. There was easy way of importing computer and software that facilitates this sector to grow. In the 1980s the annual agricultural growth rate was 3.4% which was higher than any other decade since India’s independence.

Leaders like Mahendra Singh Tikait, Sarad Joshi, and M.D. Nanjundaswamay kept pressurizing the government and convincing the government about rural agricultural backwardness. The new political landscape of the 1970s and 1980s saw not only the decline of the Congress party and the rise of opposition parties, it also marked a period in India’s political economy when a prospectively developmental state implode that lead to economic reform in 1991.

Post-Liberalization and the Structural Changes of India’s Political Economy

Changes in India’s economy can be seen even in the 1980s and it systemically started in 1991. There was a change in domestic regulator system which was followed by a change in India’s global strategy. Trade, FDI and technological changes were encouraging accordingly. Liberalization of the policy of India’s economic affected the growth pattern of India. Economic changes in different sectors in India economy, technological changes, the import substitution strategy all have transformed the economic potential of the state in India.

This structural reformed took place where the Congress party held insecure majority. Democracies find it difficult to switch into trade friendly especially when the party in power does not hold absolute majority in the era of coalition government. The trajectory of India’s economic transition was different from the economic reforms under authoritarian regime. The synergistic issue-linkage between the International Monetary Fund (IMF), the Executive, and Indian industry at the time of foreign exchange crisis of 1991was critical for initiating economic reform. The growth of India’s economy in the 1970s and 1980s were not very satisfying to bring trade and business along.

The situation during the 1980s prepared the ground for a shift in economic policies after 1991. Atul Kholi had argued that the government of Indira Gandhi and Rajiv Gandhi tilt the economic policy in the direction of business. FDI courting was still not the priority in the 1980s albeit few ventures were established which was benefited by few elite classes. The Monopolies and Trade Practices Act made heard for business to expand in core sector like chemicals and cement industries. At the same time poor people from the countryside migrated to urban India for their survival. The economic growth that was not sustaining the problems of the country was visible when the crisis was at it peak.

Under the initiative of Confederation of Indian Industry (CII), the business communities discourage the economic mismanagement and limited choice in the market of the country. V.P. Singh’s National Front Government attempt to reward mainly the rural backward section through reservation was one the appeasement policy towards the farmers. By the early summer of 1991, India’s fiscal deficit stood nearly 9% of GDP and the country had sufficiently just two weeks’ worth of imports.

Substantial tariff liberalization especially in the intermediate goods was accompanied with the significant devaluation of rupees. Tariff liberalization reduced the cost of imports pressure the Indian industries to become more competitive. India’s merchandise exports doubled between 1991- 1999. The presence of foreign companies with the FDI creates job opportunities and employment to the unemployment youth. The collaboration with foreign industries enabled the small Indian industries to access the world class technology and support of infrastructural development. Industrialization can create political awareness among people and encourage them to participate in political mobilization. Industrialization results in rapid urbanization and modernization. India’s trade reform involved a gradual reduction in trade protection with substantially increased incentives for export promotion.

India’s economic problem culminates one of the biggest democratic nations of the world to undergo economic reform. Trade and private investment orientation were born from the inability of import-substituting economic policy to deal with a growing fiscal deficit, which bought India into a problem of balance of payment crisis when Gulf crises were happening. After 1991 reform a sharp rise in the rate of economic growth was reported. The GDP was between 7.5% and 8.5% in 2003-2004 to 2005-2006. Even the growth of industrial sector was also stable at around 6% per annum.

India as a Welfare State and Challenges

 

Welfarism in India is a vision dream by our freedom fighter and also a principle that is conceptualized in our constitution of free India. There are some philosophical aspects which can be seen in the works of T.H. Marshall in his ‘social citizenship’ which include the rights to ‘a modicum of economic welfare and security, to the right to share the social heritage and to live the life of a civilized being according to the standards prevailing in the society’.

A welfare state is a concept of government in which the state plays a key role in the protection and promotion of economic and social well-being of its citizens. A welfare state is based on the principles of equality of opportunity and equitable distribution of resources. It also focuses on the governmental responsibility for the upliftment of those who are unable to avail themselves a good life. Under this system, the welfare of its citizens is the responsibility of the state. India was not a welfare state prior independence.

Economically, India’s situation was miserable. Socially also India was having a number of problems. There were social inequalities and all the vulnerable sections of the society such as women, dalits, STs and children were deprived of basic means of living. The Constitution makers were very much aware of the problems. The framers of our constitution decided that India would be a welfare state. As you must have seen, India is described as a “sovereign socialist secular democratic republic” in the Preamble of the Indian Constitution.

There are also various other programmes for women that includes the establishment by the government of India the National Committee on the Status of Women in 1976. Programmes such as establishment of hostel for working women, functional literacy for adult women, training courses for rehabilitation of women, employment and income generating production units, socio-economic programmes for women, vocational training programme etc. Indian government launched many programmes to control the social problems including programmes like- prison welfare schemes, suppression of immoral traffic, beggary prevention, prohibition and drug abuse. The government also provides certain welfare schemes for Scheduled Castes/ Scheduled Tribes and Backward Classes. The constitution has prescribed certain protective measure and safeguards for these classes.

Main attention is given to integrated health, maternity and child care in rural areas social services for the welfare of the society. A major qualitative and quantitative change in the housing and urban development sector include Housing for all, rural electrification, and other rural infrastructural measures. Integrated Rural Development Programme provides practical assistance to economically deprived families for the upgradation of skills via the Training for Rural Youth for Self[1]Employment (TRYSEM). Indian Government has implemented with an objective of welfare. The Sarva Siksha Abhiyan, the Beti Bachao Andolan, Mahatma Gandhi National Rural Employment Guarantee Scheme, Public Distribution System and the National Food Security Act and the establishment of public health units (PHU), the execution of vaccination campaign, and the granting of oil and gas subsidies are all examples of such policies.

In spite of provisioning of many welfare measures, expenditure on health, education has very less in comparison to the expenditure on health and education in other South-east Asian countries in terms of percentage to GDP. Education expenditure doesn’t reach even 5% till 2019 budget.

There are various challenges that entangled around while implementing welfare policies. India being a diverse country faces with lots of difficulties while formulating a policy. Unstable coalition government at the centre and the emerging of regional parties poses hindrance in terms of policy implementation. India being a member of the WTO and other international and regional organization, it sometimes has to follow the mandates of being a member which can cause a huge cripple to domestic economy.

One such issue was with reservation. Some examples which can be seen at present are the Jat in Haryana and some other north Indian states, the Patidar in Gujarat, the Marathas in Maharashtra.

India in the 21st Century

Economically and politically, India in the twenty-first century is very different country from that which emerged from colonial rule into independence in 1947. By the year 2020 India is expected to be the fourth largest economy in the world in terms of purchasing power parity. Developmental dimension too took different routes. Apart from basic needs, focus has been shifted to accessibility of skilled labour, human capital development and access to quality education in technical, role of information technology in human capital development, skills development etc.

Make in India, Skill India and others will be a huge benefit if the government utilized the demographic dividend to leverage the growth of India in the 21st century. Policies in the absence of skills and technological support will be less benefit. Human resources should be supplemented by good political environment to generate employable citizens.

India today is at the cusp of significant developmental transitions. Choices made will fundamentally shape its future developmental trajectory. The policy challenge today lies in identifying appropriate pathways and institutional mechanisms to negotiate these transitions and set India on a path toward a sustainable, inclusive future. While identifying appropriate pathways, India has to navigate important tensions in our polity. One important tension is the often-conflicting needs of rural vs urban populations, best demonstrated in the on-going agrarian crisis. The other challenge is institutional.

India is dealing with transitions at a time when public discourse has become increasingly sharp and polarised often blurring the lines between critical engagement and partisan endorsement of ideas. This polarisation has made sober, objective evaluation of policy choices confronting India today, difficult resulting in the adoption of short term and often unsustainable quick fixes.