A peculiar aspect of India’s recent growth story is its increasing disconnect from agriculture. The sector that happens to be the source of earning of more than half of the population seems to matter hardly in either demand or supply side of the success story. It is also remarkable that India moved to higher growth without employing even one-fifth of the workforce in industry. Increasing contribution of services in output resulted in a weakening of linkage between overall growth and agriculture on the one hand and liberalized trade reduced the need for growing home market that supports growth. The sustainability of this peculiar growth precisely depends upon demand generated from fewer and fewer people and the majority of the workforce depending on agriculture survives at subsistence levels, unwanted and excluded from the current phase of high growth.
The planners however recognized the conflict and tried to address the problem under the broad rubric of ‘inclusion’ which pertains to a two prong strategy of creating provisions for some social security on the one hand and on the other, corporate led industrialization to pull out the vast underemployed mass from low productive subsistence agriculture to increasing returns activities. However the Lewisian transformation from traditional to modern sector didn’t come true and although a large part of population shifted from agriculture to non-agriculture it seems to be a movement within the composite traditional sector that includes the urban informal segment. The question remains that given the declining employment elasticity either in organized manufacturing or services, the technology choices of which are exogenously determined, how far it is prudent to believe that industrialization is the preferred path of employment generation in countries such as India at least in the context of present policy dispensation. At another level it is reasonable to ask whether one can conclude that diminishing returns in agriculture are unavoidable or the scope of increasing productivity in agriculture is really exhausted especially in the context of the fact that agricultural productivity in India is much less than other Asian developing countries. And furthermore whether the growth of non-farm segment which is much talked about today could be sustainable without being supported by rising productivity and earnings in agriculture? The moot point however is that are we heading towards a break-up of an assumed linear linkage between modernity and industry or can we think of a different kind of industrialization.
In spite of the worries that the present nature of industrial growth brings to us, there is perhaps not enough reason to throw away Kaldor’s ‘engine of growth’, the manufacturing sector, that is assumed to have larger spillover effects in terms of both productivity and employment. And especially in countries such as India there is hardly any reason to believe that the consumption demand has already reached to a level that could sustain a service led growth. Hence we need industries and of course not industries that merely generates earnings supportive to subsistence but both employment and surplus generating. The conspicuous absence of large and especially medium scale manufacturing industries in India vis-à-vis other developing countries had been mentioned in the literature. There is also little choice for capital left in the present context of having land for industry without displacing settlers precisely because of paucity of alternative economically viable spaces. The distress caused to a vast section of dispossessed however remained unacknowledged and also largely undocumented to further the logic of capital. We come across ‘primitive accumulation of capital’, alienating people from their means of production but it seems to be half-hearted in its objective. It brings natural resources into the realm of capital but do not employ the displaced as wage labour the way it did earlier. The crux of the debate on land acquisition perhaps lies in the fact that it becomes increasingly difficult to establish ‘social gains’ derived from ‘private profits’. And as a result displacement becomes increasingly painful causing violent discontents and discomforts in the democratic space.
The question at another level is of course related to the problem of aggregation. How come the loss of one can be compensated by the gains to others? The macro perspectives sometimes become insensitive to the consequences of displacement that entails various cultural and social dimensions. And whether there are enough theoretical tools to capture those losses? Does ownership of industries, private or public really solve the problem of accommodating the displaced? Differences in systems might cause a difference in determining the distribution of gains and losses but how to make social choices beneficial to all. How can we really conceive of a ‘just compensation’? And more precisely what are the institutional and legal changes required to empower the dispossessed to raise their voice which any way creates lot of discomfort to the smooth sail for capital whether private or state-owned. The doctrine of ‘eminent domain’ provides legal sanctions to keep the state machinery on the side of capital but how can we conceive a state more capable of mitigating the emerging conflicts which it is supposed to do instead of silencing discontents. The efforts to create silence zones like SEZs would hardly solve the problem. The conflict between aspiring middle class and the noisy poor seems to appear in the new battle ground of land acquisition positing questions beyond the realm of economic calculations and entails political contestations.
The workshop is designed to debate the present policies on land acquisition and find ways that could suggest a more inclusive kind of development and more equitable distribution of gains and losses. We would like to hear from experts in this field and comments from participants which would provide us more clarity to the questions to be looked into.
Dr Satyaki Roy
Institute for Studies in Industrial Development
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New Delhi - 110070 INDIA
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