As mentioned earlier, the free market expects the Govt. to have little interference in the economic matters and leave it all on the market to sustain the system. This coupled with Karl Marx assertions in his manuscript, the desires of a capitalist are never in sync with that of the society and a capitalist always attempts to increase its earning by lowering the competition, increasing monopoly by earning the power clearly explains the future of the poor. The result of it is witnessed multiple times across the history.
Around 65 million people are estimated to have been displaced in India since Independence, the highest number of people uprooted for development projects in the world. This amounts to around one million getting displaced on an annual basis on the name of “public good”. The striking point is its only 20%-25% of them who get resettled every time. To protect the rights of those whose survival depends on the land “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act” was passed in 2013, but since then multiple attempts are being made to relax it and to make it more favourable and motivating for the corporates to invest.
In a market, a labour gets turned into a commodity, and as the supply of the commodity get increased the prices suffer a downfall. The same is what seen across the history where even after registering such growth years, the wages of labours are still on the same mark. The pattern of wage to profit ratio (a basic indicator of the distribution of economic prosperity) in this period captures the rate of exploitation of the industrial working class in the post-reform era. From around 2.73 in the late 1980s, the wage to profit ratio has declined to 0.25 in 2012 a spectacular 10-fold decline. This coupled with multiple relaxations being made in the labour laws to make the business environment more incentivizing for the corporates, have made the system completely devastating for them.
In this lockdown, when each of us residing in the urban sector are sharing posts related to nature reclaiming itself, it’s again those in the villages who are watching the dark smoked sky. Even though the whole nation is shut, mining and steel manufacturing units are allowed to operate, under normal circumstances, all industrial, infrastructure and mining operations are supposed to be monitored by regulatory bodies. The disturbing point is that the environmental regulatory bodies are not operating at their full run and ground visits are not possible for them and hence there these mining and manufacturing units are operating without regulations. Based on visual perception, people residing near the mines are reporting higher levels of effluent discharge and localized dust pollution since the lockdown.
With each passing year, Govt. comes up was an amazing budget for the nation progress, as they state it always. A very basic look at the budget across the years can make you conclude that the spending in the development sector is getting reduced regularly. The budget for the food subsidy, employment provision, improving the standard of living, helping farmers etc, everything is facing a fall. This is perfectly in relevance with Neo-liberal policies where Govt. slowly attempts to stop subsidies, providing jobs, investing in public domain etc and leave it all on the market to sustain.
These were just the part of the long list of examples which affects those in the bottom of the economic pyramid. 94% of the total employment in the country is in the unorganized sector, and as per one of the estimates 136 million people are at the risk of losing their job with this economic slowdown caused because of the pandemic.
I am afraid, that with this huge downfall in the GDP of this quarter, the Govt. will be pushed to come up with policies to compensate for this, even the corporate will be willing to expand to compensate this loss, this might again push for more relaxed labour laws, more SEZs/CEZs, more relaxed land acquisition laws and what not? Combined with it will come the change in the consumer behaviour forever, this will have a large scale impact on the daily wage workers be it those working in roadside shops, roadside food corners, domestic helpers, tourist places, water parks and all those places where human interaction at close proximity is possible.
Way Ahead
As even Ex-Governor of RBI Mr Raghuram Rajan mentioned that the export demand is in no position to rise. The global demand is falling and it is almost impossible to replace China or to export as much as they do.
This combined with the increasing opportunity of domestic demand, I believe we are again standing at the same place where the third planning commission was i.e. to opt either to strategize the increase in exports or to strategize the reduction in imports. And again, I believe we should go with the path of self-reliance. The following could be some of the steps which Govt. should consider:
The direct taxes contribute only 35% of the total tax in India which is far below other countries, also the avg. tax rate in India ~ 33% which is again far below the world average. Hence tax the wealthy and big corporates to direct that sum into developmental projects.
Invest in public sectors to make elementary education and VET accessible to all, build a strong primary healthcare system to ensure universal health coverage, regulate the functioning of secondary and tertiary health care units.
Increase the wages of the workforce to ensure that the people have money in the hand to boost the domestic demand.
Invest in agriculture and unorganized sector to ensure the well being and advancement of the majority part of the workforce.
Slowly increasing the import tariff to reduce the imports and promote the domestic vendors, also ensuring that the domestic demand don’t get leaked out to foreign vendors.
Investing in small domestic manufacturing firm by helping them improve their infrastructure and more importantly, modernization of the tier two and tier three of private sector firms.
Lowering of policy-induced barriers for scaling up the operations and more collaborated public-private partnership in R&D activities.
Lower interest rates to those producers who are prevented from producing more for lack of access to credit.
Associate with NGOs, Social Development Firms and Civic Organizations to increase the capacity of the governmental offices and to increase the coverage of the policy by making it reach the last mile.
By maintaining the feudal power of the states, a collaborative work of the centre with the states to ensure an equitable distribution of resources across the region rather than accumulating it at certain regions and increasing disparity.
Abhishek Singh is a student at IIT Kanpur
This article is the final part of a three-part series. You can read Part 1 here and Part 2 here
The views expressed in this article are solely that of the author and may not necessarily reflect Qrius Editorial Policy.