Given the kind of stark inequity that exists in India, the debate on this will never cease. For the last quarter century, elected governments and the main political parties pretended that the priority should not be on social and economic justice but on aggregate economic growth. The opportunity provided by the resurgent neoliberal capitalism at the global level came in handy to justify this obsession with growth. But in political economy terms, it was an opportunity to privilege capital over everything else.
With the 1997 Asian crisis, essentially managed by Asian countries themselves, the IMF lost face when it failed by advising them to follow self-destructive austerity policies. Of course, when Europe faced, in 2008, a much larger financial and then economic crisis, the IMF quietly extolled the virtues of Keynesianism. By then finance capital had already established its dominance that finally led to the current, what may be called, devastating economic crisis in Greece. This could well turn out to be the beginning of the end of finance-led neoliberal capitalism.
But in India, successive governments pretend that neo-liberalism is here to stay although political exigencies compel them to come out with a few welfare schemes here and there. The UPA government introduced a series of largely pro-aam aadmi development and welfare policies but I have no hesitation in saying that they were 'half-hearted half-measures' further watered down during implementation. The role of the then Planning Commission and the Finance Ministry, two flag bearers of neoliberal capitalism, should not be underestimated.
India's historic blunder is its neglect of the 'poor and vulnerable' people that we call aam aadmi. This is where India should have learnt some lessons from China or, as the recent statistics would show, from Bangladesh for a change. In almost all social/human development indicators, China is way ahead of India. And now Bangladesh has a better record in female infant mortality and women's labour force participation.
Some of India's statistics relating to human dignity and basic living conditions should put any self-respecting Indian or his/her government to shame. According to the National Sample Survey of 2009, half the households do not have a private toilet facility. Of course this deprivation is much higher for the SC group (65 per cent) or still higher for the ST group (69 per cent). Equally shocking is the fact that half the households do not have a separate kitchen; again much higher for ST (60) and SC (64). In every indicator of deprivation or welfare, what one finds is the face of entrenched social inequality — SC and ST at the bottom, Muslims and OBC in the middle, and the rest on top.
But India's middle class mind-set — or more tellingly that of the rich — is far from showing any kind of uneasiness about such basic deprivations that impinge on the self-respect and dignity of well over half the people.
The rich were already globalised and the middle class also got incorporated through employment, remittances and business opportunities. But the middle class could turn against the ruling regime if this 'new prosperity' is going to be threatened. And it will, given the slowdown in global growth, especially in the fast-growing Asian countries.
Instead of a long-term vision and planning for nation-building by strengthening the capabilities of the aam aadmi, the current regime has gone several steps ahead of the previous one in unleashing policies and programmes for a more strident variety of predatory capitalism by mouthing the by now defunct formula neoliberal capitalism. Of course, it is also rooted in political economy where the Indian state is slowly but steadily being taken over by corporate capitalism with its desi flavour and features of cronyism.
Instead of strengthening the hidden potential for productive work of the majority of the people, the regime has cut back on human and social development programmes, public employment, education, health and social security. We are definitely on the path to 'Latin Americanisation' of the economy.
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K.P. Kannan is Former director and fellow, Centre for Development Studies, Thiruvananthapuram.
